Market Quote: North America’s Burgeoning Market Breadth, Washington’s Ballooning Deficit
Author: The editor's desk
October 10, 2024
A mid-week analysis of what’s happening in global financial markets from the perspective of AGF’s investment management team.
Broadly Speaking
The third quarter performance of North America’s equity markets was considerably more diverse than it’s been for some time, likely because of recent rate cuts in both Canada and the U.S., which has many investors feeling more optimistic about a broader swath of stocks going forward.
In fact, of the 723 names listed on the S&P 500 Index and the S&P/TSX Composite Index, only 151 registered negative returns in the third quarter, while 489 of those names outperformed the S&P 500’s total quarterly return of 4.6% and 372 names outperformed the S&P/TSX Composite’s 10.5% gain. This is in stark contrast to what happened last year, at least in the U.S., where all the S&P 500’s gains through November of 2023 were generated by just seven constituent stocks.
In the Red
The federal budget deficit hit US$1.83 trillion in the fiscal year that ended earlier this month, a staggering figure that seems likely to get even worse in the next few years. If red ink hits US$1.8 trillion with a solid economy, one can only imagine what the numbers would like if the economy softens.
Neither Donald Trump nor Kamala Harris have shown any inclination to confront the deficit; Trump wants huge new tax cuts and Harris would spend far more on domestic programs. This story will persist well after the U.S. Presidential campaign ends, as total debt exceeds US$36 trillion in 2025 — and another debt ceiling crisis looms by summer.
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Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. Our companies deliver excellence in investing in the public and private markets through three business lines: AGF Investments, AGF Capital Partners and AGF Private Wealth.
AGF brings a disciplined approach, focused on incorporating sound, responsible and sustainable corporate practices. The firm’s collective investment expertise, driven by its fundamental, quantitative and private investing capabilities, extends globally to a wide range of clients, from financial advisors and their clients to high-net worth and institutional investors including pension plans, corporate plans, sovereign wealth funds, endowments and foundations.
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