July 2023 Market Update from Canada Life Investment Management

Mortgage costs continue to drive inflation.

Global equity markets moved higher over the month of July. Investor sentiment was largely positive as economic data pointed to the strong likelihood of the global economy avoiding a recession this year. Still, returns were muted as global central banks lifted rates and economic data was largely unimpressive. The U.S. Federal Reserve Board (“Fed”), Bank of Canada (“BoC”) and European Central Bank (“ECB”) all raised interest rates by 25 basis points (“bps”) over the month. Business activity was relatively subdued in many parts of the world, as measured by manufacturing and services sector activity, largely hindered by waning consumer and business demand.

In Canada, the S&P/TSX Composite Index advanced over the month, benefiting from the relatively strong performance of the Health Care sector. U.S. equities, as measured by the MSCI USA Index, also rose higher over July. Yields on 10-year government bonds in Canada and the U.S. edged higher. In commodities markets, the price of oil posted a double-digit gain, while gold prices also ticked higher.