Client Letter
Sep 11, 2023

Client Letter


Dear Client, 

August has historically been a weak-performing month for investors and it once again lived up to its reputation. Here’s a summary of the main events that steered the markets:

Monthly market developments

·         Equity markets ended August lower but remain up YTD. U.S. indexes were pulled down by all sectors, the TSX by financials and global stocks over concerns about China’s economic recovery.

·         U.S. and Canadian bond yields initially jumped after Fitch, a top 3 credit rating agency, downgraded the U.S., but started to fall back later in the month as positive employment and inflation data came in.

·         Energy prices have been climbing since late June, with oil now up 25% and hovering above $US80 a barrel. This surge is mainly due to decreased supply orchestrated by Saudi Arabia and OPEC.

·         The froth on the U.S. and Canadian job markets finally showed signs of ebbing. This will be viewed positively by the Fed and Bank of Canada as they continue to engineer an economic slowdown.

·         Nasdaq-listed Nvidia Corp. had another round of results that breezed past expectations, highlighting the sustained demand for its computer chip technology which is used to power AI applications.

·         During August, over 90% of S&P 500 companies completed reporting their Q2 earnings. Results broadly surprised to the upside relative to subdued expectations, but earnings growth was mixed.

·         It was Q3 reporting season for Canada’s major banks. Profits were down as a result of rising expenses and money put aside for credit losses, but in absolute terms performance remained resilient.

·         In response to a slower than expected post-COVID economic recovery, China introduced a series of stimulus measures targeting its financial markets, property and tech sectors and consumer spending. 

·         U.S. CPI rose 0.2%. This was in line with expectations and largely due to rent costs. Core inflation, which excludes food and energy, fell 0.1%. At its annual Jackson Hole summit, Fed chair Powell said the Fed would hike rates further if the economy didn’t slow enough to keep inflation declining.*

·         Canadian CPI increased from 2.8% to 3.3%. This was driven by mortgage costs and food while gasoline prices didn’t fall as much as expected. However, core inflation figures show a continuing yet slow disinflationary trend. The Bank of Canada’s next rate announcement is set for September 6.*

How does this affect my investments?

After several months of strength, equity markets were more hesitant in August. Whether we are already there or not, we are getting close to the end of the rates hiking cycle in North America. Transition periods always come with volatility. Markets will be looking for more visibility on the delayed impact of the hikes that have occurred but also on what it will take for central banks to begin reversing course.

Regardless of where we are in the market cycle, it’s important to take a disciplined approach to investing and stay focused on your long-term goals. This strategy helps you keep your emotions out of investing, typically buying high and selling low like many investors do. Ongoing monitoring and reviewing of your portfolio also ensures it remains on track. Diversifying investments reduces risk as well.

We are here to support you in achieving your financial goals. Please do not hesitate to contact us.



Gilchrist Financial Team


The information in this letter is derived from various sources, including CI Global Asset Management, the Wall Street Journal, Bloomberg, Reuters, National Post, Investment Executive, the Federal Reserve, Bank of Canada, Statistics Canada and U.S. Bureau of Labor Statistics,, Marketwatch, CNBC, Barron’s, Fortune, Toronto Sun, Daily Mail and LinkedIn as at various dates. This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources and reasonable steps have been taken to ensure their accuracy. Market conditions may change which may impact the information contained in this document. Before acting on any of the above, please contact me for individual financial advice based on your personal circumstances. 


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