By mid-2024, inflation had eased, allowing central banks to lower interest rates to more neutral levels.
Inflation fell back under control for now, and unemployment remained low.
The global economy grew steadily, but growth was uneven—while the U.S. showed strong economic performance, Canada and much of Europe saw slower growth.
The Bank of Canada lowered its overnight interest rate by 1.75% to 3.25% due to concerns about a slowing economy and lower inflation. Similarly, the U.S. Federal Reserve reduced its rate by 1%, setting it between 4.25% and 4.50%. These rate cuts, along with economic recovery, helped boost corporate profits and growth, although inflation risks persisted.
Stock markets had a strong year, showing optimism about a stable global economy. Lower interest rates and steady conditions pushed up company earnings and stock prices. By the end of 2024, global stocks (measured by the S&P Global Broad Market Index) were up 16.8%. U.S. stocks (tracked by the S&P 500) rose 25%. Large-cap sectors like Communication Services, Information Technology, and Financials each gained over 30%. Canadian stocks (measured by the TSX Composite) also grew, rising 21.7% led by Information Technology (+38%), but were dragged down by Communication Services (-21.1%).
Bonds performed well in 2024. Short-term bonds outpaced long-term ones as longer-term rates rose due to inflation worries. The FTSE Canada Universe Bond Index gained 4.2%.
The Canadian dollar had a rough year, losing 8% of its value and ending at C$1.44, its lowest in 20 years. This decline was mainly due to differences in monetary policy between Canada and the U.S.
Head of Investments
Yelena Stepanyan is the Head of Investments at Embark. A lover of all things related to the financial markets, she is currently the Chair of the Chartered Financial Analyst Society Toronto's Institutional Asset Management Committee.
