January 2024 Market Update from Canada Life Investment Management
Rates signal peak, consumers spending streaks and supply leaks
Global equity markets edged higher over January. Sentiment was largely mixed as investors parsed through economic data and central bank comments to try to predict when and how central banks will lower interest rates this year. The Bank of Canada (“BoC”), U.S. Federal Reserve Board (“Fed”) and European Central Bank all held steady at their first gatherings of 2024. In China, the People’s Bank of China (“PBOC”) held its one- and five-year loan prime rates (“LPRs”) steady, but it reduced its reserve requirement ratio to improve liquidity.
The U.S. announced its gross domestic product expanded by 3.3%, annualized, in the fourth quarter. China’s economy grew by 5.2% year-over-year, while Europe’s economy was largely unchanged. Weakness in the global manufacturing and services sectors persisted in January amid still muted demand. Inflation remained elevated but has followed a downward path over the past year.
