November 2022 Market Update from Canada Life Investment Management

A slowdown could be on the horizon for the U.S. Federal Reserve.

Global equity markets advanced over November as expectations grew that the U.S. Federal Reserve Board (“Fed”) would soon begin slowing the pace of its interest-rate hikes. The Fed raised the target range of its federal funds rate by 75 basis points (“bps”) to 3.75%-4.00% early in the month, but the minutes suggested officials are beginning to consider a slowdown in the pace of rate increases. Inflation remained elevated globally, particularly in Europe and the U.K., where both are experiencing deteriorating economic conditions. In Canada and the U.S., October’s inflation rate moderated but remained broadbased and still at levels well above their central bank’s targets.

In Canada, the S&P/TSX Composite Index finished higher, benefiting from the strong performance of the Materials sector. In the U.S., the S&P 500 Index rose higher, also led by the Materials sector. Materials stocks were buoyed by rising gold prices. Meanwhile, the price of oil fell over November, with Europe considering a cap on Russian oil prices. Yields on 10-year government bonds in Canada and the U.S. declined over the month.