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The Month of Mergers and Quarterly Economic Outlook. The Canadian and U.S. economies continue to show resilience as reported this month with Gross Domestic Product (GDP) growing by 1.3% and 1.9%, respectively.
The Bank of Canada announced its intent to leave benchmark interest rates unchanged. This decision was initiated on the basis that the Bank is forecasting a slowing of GDP growth to 1.6% in 2020.
Canadian markets continued to show resilience to a global slowdown as the S&P/TSX hit a new record high. At the high, the index was within striking distance of 17,000 points, nearing a threshold that was unexpected at such a late stage in the business cycle.
Investors who were expecting renewed exuberance in the markets after the Federal Reserve cut interest rates on July 31st would have been disappointed given the negative monthly return on the S&P 500.
North American markets continued higher following last month’s reaction to the Federal Reserve’s softening tone allowing the S&P 500 and S&P/TSX to hit new highs.
A number of positives helped global markets swell during the month, the largest of which was a dovish tone from the Federal Reserve meeting.