December is here, bringing hope that this historically strong month for stocks will close out the year on a high note. 2024 has already seen indexes setting and breaking record highs, leaving investors eager for a festive flourish to finish the year. Historically, December has earned its reputation as a strong performer, thanks in part to the “Santa Claus rally.” This phenomenon often lifts markets during the last week of December and the first few trading days of January. While the rally is not guaranteed, several factors help explain why December tends to shine.
What Fuels December’s Market Optimism?
December’s upbeat reputation stems from a mix of seasonal factors that often work in favour of the markets. For starters, positive sentiment tends to dominate this time of year. Strong holiday spending, year-end bonuses, and the general cheer of the season can boost consumer confidence, creating a ripple effect in the stock market. Investors, buoyed by the festive spirit, are often more optimistic, which can drive prices higher.
Portfolio rebalancing also plays a big role. As the year winds down, fund managers and individual investors adjust their holdings to lock in gains, optimize tax strategies, or prepare for the new year. This activity often creates short-term buying pressure, adding to December’s upward momentum.
Lighter trading volumes during the holiday season are another factor. With many traders and institutional investors taking time off, leaving the field open to us smaller retail investors. 😊 This reduced activity can amplify market moves, often skewing them to the upside. Meanwhile, key economic data – such as retail sales, consumer confidence, and employment reports – can provide an additional boost. Strong holiday shopping figures, in particular, tend to lift retail and consumer stocks.
Finally, the Bank of Canada and US Federal Reserve meetings in December are always worth watching. This year, it is less about whether they will cut interest rates and more about how big those rate cuts will be. Surprises in rate decisions or forward guidance could steer markets in unexpected directions. And let us not overlook the holiday spirit itself – optimism and a reduced focus on negative news often set a positive tone for markets during this season.
What is the Takeaway for Us Investors?
While December’s track record gives us plenty of reasons to feel hopeful, it is a good reminder that the markets do not follow a script. Past performance is never a guarantee of future results – but here is to closing the year with a little holiday cheer! 😊
With December’s market optimism in mind, let’s shift gears and take a look at how the markets performed this past week.
Items that may only interest or educate me ….
Canadian Economic news, US Economic news, ….
Canadian Economic news
This past week’s key economic data that the Bank of Canada (BoC) considers when deciding whether to raise or lower the interest rate.
Labour Force Survey (LFS)
Statistics Canada’s Labour Force Survey for November revealed a mixed bag for Canada’s job market. The economy added 51,000 jobs—more than double analysts’ expectations of 25,000 and a sharp increase from the 14,500 jobs added in October. However, most of this growth came from the public sector (funded by taxpayers) rather than the private sector, raising concerns about the long-term sustainability of these gains.
Meanwhile, the unemployment rate climbed to 6.8% in November, up from 6.5% in October and above the expected 6.6%. Monthly unemployment increased by 6.1%, and year-over-year, it is up 22.2%. Excluding the pandemic years, this marks the highest unemployment rate since January 2017. This rise underscores a growing challenge: while jobs are being added, they are not keeping up with population growth, pushing unemployment higher.
For workers, there is a silver lining in wages. Average hourly earnings rose 4.1% year-over-year in November, though this was a slowdown from October’s 4.9% pace. While slower wage growth is not ideal for workers, it helps on the inflation front, as businesses are less likely to pass rising labour costs onto consumers, potentially easing inflationary pressures.
This latest data will undoubtedly weigh on the BoC’s upcoming rate decision. Rising unemployment and cooling wage growth strengthen the case for a more aggressive rate cut, with many expecting the BoC to lower the benchmark interest rate by 0.5% to 3.25% next week. While such a move could offer relief to borrowers, it highlights the ongoing struggles facing Canada’s labour market.
Canadian market volatility
Canada’s Volatility Index (CVIX) had an eventful week, starting at 10.84 before seeing some early-week jitters with spikes to the 11.5 range. However, thoughts of rate cuts in Canada and the US quickly calmed investors, allowing the CVIX to drift lower for the remainder of the week, ending at 9.12.
Tracked under the ticker VIXI on the Toronto Stock Exchange (TSE), the CVIX gauges how much market volatility investors expect. A reading below 10 points to a calm, stable market, while numbers between 10 and 20 signal typical market fluctuations with moderate volatility. But when the index climbs above 20, it is a sign of rising uncertainty and the potential for a bumpy ride ahead.
US Economic news
This past week’s key data points that the Federal Reserve (Fed) considers when deciding whether to raise or lower the interest rate.
Labour data
Recent reports from the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), the Bureau of Labor Statistics’ Employment Situation Summary (ESS), and the ADP Employment Report provide valuable insights into the current state of the US labour market.
JOLTS
The October JOLTS report showed a modest uptick in job openings, rising to 7.7 million, up from a 3.5-year low of 7.4 million in September. This exceeded analysts’ expectations of 7.475 million openings. However, compared to last year, job openings have decreased by 941,000. The job openings-to-unemployed worker ratio held steady at 1.1, meaning there are still more available jobs than there are job seekers. Despite slower hiring, businesses remain confident and continue to seek workers, indicating a tight labour market.
ADP
The ADP National Employment Report for November revealed a gain of 146,000 jobs, falling short of the 150,000 expected and down from 233,000 in October. Of these, 120,000 were created by large companies (500+ employees). While the numbers missed expectations, they still reflect a resilient job market. However, the slowdown suggests that the labour market may be cooling slightly.
ESS
The November Employment Situation Summary came in stronger than expected, with non-farm payrolls increasing by 227,000—well above the forecasted 200,000. This follows a smaller increase of just 12,000 jobs in October, which was impacted by hurricanes and the Boeing (NYSE: BA) strike. The unemployment rate rose slightly to 4.2% from 4.1% in October, in line with expectations. Wages saw a 0.4% rise, matching October’s increase and surpassing the anticipated 0.3%. Year-over-year, wages grew 4.0%, in line with October’s pace and slightly ahead of forecasts.
Summary
Overall, these reports paint a picture of a labour market that remains relatively strong but is showing signs of cooling, with slower job growth and rising unemployment. Hopefully, these trends support the case for a 0.25% rate cut at the Fed’s upcoming meeting, as the central bank works to balance economic growth with inflation control.
Consumer Sentiment Index (CSI)
The University of Michigan’s preliminary CSI for December delivered an upside surprise, climbing to 74.0. This beat analysts’ expectations of 73.0 and marked a 3.1% increase from November’s final reading of 71.8. Year over year, sentiment is up 6.2% from 69.7, reflecting steady gains.
Looking below the surface, the Current Economic Conditions Index, which gauges how consumers feel about their immediate financial situation, soared to 77.7 from November’s 63.9 – a staggering 21.6% jump. Compared to December 2023, the improvement was a more modest 6.0%. Meanwhile, the Index of Consumer Expectations, which looks forward six months, dipped 6.9% from last month to 71.6. Still, it outpaced last year’s 67.4, suggesting cautious optimism for the road ahead despite some lingering concerns.
This marks the fifth straight monthly gain for the CSI, hitting its highest level in seven months. The sharp rise in current conditions is tied to consumers’ growing belief that purchasing durable goods now – like vehicles, appliances, or furniture – will save money in the long run, as prices for these big-ticket items are expected to climb. Durable goods, built to last three years or more, often see demand rise when consumers feel confident about their financial footing.
Interestingly, political leanings shaped expectations. Republican respondents expressed increased optimism, anticipating inflation to ease due to potential policy changes, while Democrats were more cautious, fearing these same shifts could spark higher inflation.
American market volatility
The CBOE Volatility Index (VIX), often referred to as the market’s “fear gauge,” opened the week at 14.08 and held within a narrow 14.0–13.0 range before sliding to 12.77 by week’s end. This drop was supported by reassuring comments from Fed Chair Jerome Powell about the resilience of the American economy, boosting hopes for another rate cut. The latest labour data, which showed rising unemployment, further strengthened these expectations, helping the VIX close the week at its calmest level since this past summer in July.
For some context, the VIX tracks expected market volatility over the next 30 days. When it is below 12, it signals a calm market. Readings between 12 and 20 reflect normal market swings. But once the VIX climbs into the 20-30 range, it indicates increased investor anxiety. Anything above 30 typically means the market is stressed, often a precursor to major turbulence or even a crisis.
Weekly Market Review
Monday: the last month of the year got off to a mixed start with the Toronto Stock Exchange Composite Index (TSX) and the Dow Jones Industrial Average (DJIA) ending lower, while the S&P 500 Index (S&P), and the Nasdaq Composite Index (Nasdaq) both ended higher.
In Canada, the commodity-heavy TSX dipped as a stronger American dollar made commodities more expensive for buyers using local currencies. Since many commodities, including energy, are priced in US dollars, a stronger dollar can lead to lower demand from abroad. This lower demand is what led to the drop in commodity prices. On a positive note, manufacturing reached its fastest pace since early 2023. In trading, the Consumer Staples sector posted the biggest gain, while Healthcare saw the biggest loss.
In the US, the S&P and Nasdaq closed at record highs, again, driven by gains in technology stocks. Investors are waiting for this week’s labour data to get a sense of what the Fed will do with rates at their next meeting. In trading, Communications Services advanced the most, while Utilities saw the biggest decline.
Tuesday: another mixed day in the markets, with the DJIA the only index to lose ground. Oil prices rose ahead of an OPEC+ (Organization of the Petroleum Exporting Countries, plus ten other oil producing countries) meeting later this week where member nations are expected to extend their current supply cuts.
In Canada, a rebound in commodity prices helped the TSX finish higher, offsetting weakness in the Financials sector following Bank of Nova Scotia’s earnings, which fell short of analysts’ expectations. On the trading front, the Basic Materials sector emerged as the day’s standout performer, while the Technology sector sank the farthest.
In the USA, the S&P and Nasdaq reached another record high close. Stronger-than-expected labour data, coupled with comments from Fed officials expressing confidence in progress toward the 2% inflation target, fueled the optimism. In trading, Communication Services gained the most, while the Utilities sector lost the most.
Wednesday: comments from Fed Chair Jerome Powell, stating that the American economy is in “remarkably good shape,” sparked a rally in technology stocks, driving all four major indexes into positive territory. The comments has increased confidence in analysts and investors that the Fed will lower the US interest rate at their next meeting. Oil prices dropped as investors await a decision from OPEC+ members regarding future supply cuts.
In Canada, the technology rally in the US spilled over into the TSX, driving it close to its all-time high. In trading, the Technology sector posted the biggest advance, while the Energy sector weighed the most on the index.
In the US, all three indexes set record high closes following Mr. Powell’s upbeat comments on the state of the economy and inflation. In trading, the Technology sector had the best day, while the Energy sector had the worst.
Thursday: it was another mixed day in the markets with the TSX ending higher and the three American all ending lower as investors await Friday’s employment reports in Canada and the US. Oil prices fell despite OPEC+ pushing back its planned output increase to April 2025 in order to support prices.
In Canada, the TSX had another record high close today despite mixed earnings results from the country’s biggest banks. Investors are expecting the BoC to lower the rate at their meeting next week. In trading, the Energy sector gained the most, while the Consumer Cyclicals sector dropped the farthest.
In the US, Fed Chair Powell’s remarks on Wednesday about the economy’s surprising resilience have investors closely eyeing tomorrow’s labour report for hints about the Fed’s next move. A weaker report could strengthen the case for a rate cut, while robust data might raise doubts about the Fed’s readiness to ease monetary policy. In trading, the Consumer Cyclicals posted the biggest gain, while the Basic Materials sector (miners and fertilizer manufacturers) sank the farthest.
Friday: labour reports from Canada and the US that showed higher unemployment boosted expectations of rate cuts in each country. This optimism propelled all major indexes, except the DJIA, into positive territory. Oil prices were lower on concerns of weak demand and a supply surplus.
In Canada, the TSX rallied to a record high following the release of the latest labour data which had investors anticipating lower interest rates. On Bay Street, the Technology sector led all sectors, while the Energy dropped sharply.
In the USA, the ESS delivered close to a ‘Goldilocks’ reading, where the data is strong enough to dampen concerns about the economy but soft enough to keep the Fed’s options open on lowering rates this month and into next year. The DJIA has been weighed down for the last few days by the shooting death of the CEO of UnitedHealth Group (NYSE: UNH). On Wall Street, the Consumer Cyclicals sector posted the largest increase, while the Energy sector had the biggest decline.
Weekly Market and Portfolio Review
For the week, the TSX (SPTSX) gained 0.2%, the S&P 500 (SPX) increased 1.0%, the DJIA (INDU) fell 0.6% and the Nasdaq (CCMP) surged 3.3%.
| Index | Weekly Streak |
| TSX: | 5 – week winning streak |
| S&P: | 3 – week winning streak |
| DJIA: | 1 – week losing streak |
| Nasdaq: | 3 – week winning streak |
The final month of what has been a rewarding year for investors kicked off with three of the four major North American indexes posting weekly gains – and, just as importantly, maintaining upward momentum. The DJIA came close to joining the winners’ circle but was held back by the tragic murder of UnitedHealth’s CEO. UnitedHealth, one of the 30 companies in the DJIA, saw its stock tumble midweek, dragging the index into negative territory.
It was almost another week, another set of record highs. The S&P, Nasdaq, and the DJIA reached record levels on Wednesday, but while the DJIA stumbled at the end of the week, the S&P and Nasdaq climbed to fresh records on Friday, closing the week on a high note and setting an upbeat tone for what is ahead.
Driving the markets were strong consumer and investor optimism, bolstered by record-breaking Black Friday and Cyber Monday sales, estimated to exceed $24 billion. Investor enthusiasm surrounding Trump’s potential tax reforms and deregulatory policies continued to add fuel to the rally. Heavyweight tech stocks surged, with Amazon leading the pack thanks to its impressive holiday sales figures. Lower interest rate expectations provided additional support for the sector, drawing in fresh buying activity. To top it off, the latest labour market data offered reassurance to investors. While mixed, the results were seen as paving the way for another rate cut, which helped the S&P and Nasdaq finish the week with upward momentum.
North of the border, the TSX closed the week with two consecutive record highs, powered by strong commodity prices and labour market developments. Canada’s big six banks reported mixed earnings, reflecting varied challenges across the sector. Labour data provided a twist: stronger-than-expected job gains coupled with rising unemployment boosted expectations of a jumbo 0.5% rate cut by the BoC at its December 11 meeting. Such a move would lower the benchmark rate to 3.25%, with hopes of jumpstarting the stagnant economy. However, falling oil prices limited the TSX’s gains.
Overall, December kicked off on a high note, with record highs, consumer optimism, and renewed momentum driving the markets. While falling oil prices and mixed earnings reports held back gains in some areas, the overall sentiment remains positive. Looking ahead, next week’s US inflation data and Canada’s final BoC interest rate decision for the year will be key events to watch—both with the potential to impact this holiday rally. Here is hoping the momentum keeps rolling so us investors can close out the year on a high. Let us extend the winning streaks and get the DJIA back into the win column! 😊
| Portfolio | Weekly Streak |
| Portfolio 1: | 1 – week winning streak |
| Portfolio 2: | 5 – week winning streak |
| Portfolio 3: | 5 – week winning streak |
The final month of what has been a strong year so far started on a high note, with all three portfolios posting weekly gains, as highlighted in the chart below.
Portfolio 1 made a solid rebound from the previous week’s decline, which was largely driven by Nvidia’s (NASD: NVDA) 5% drop, offsetting the gains of 73% of the portfolio’s other holdings. This past week, 61% of the holdings saw a boost, highlighted by impressive 34% gains from Navitas Semiconductor (NASD: NVTS), and 10% increases from both Celestica (TSE: CLS) and Datadog (NASD: DDOG). Additionally, Amazon (NASD: AMZN), Apple (NASD: AAPL), Cameco (TSE: CCO), Datadog, The Trade Desk (NASD: TTD), and Walmart (NYSE: WMT) all hit all-time highs. However, the main reason for the gain was Nvidia posted a slight weekly gain. The only downside was an 18% drop in Indie Semiconductor (NASD: INDI), but overall, it was a strong recovery for Portfolio 1.
Portfolio 2 had a decent week and managed to extend its winning streak. Even though only 40% of the companies recorded a weekly increase, solid performances from the four technology sector companies helped offset losses in the five energy sector stocks. It was not much, but it is enough to keep the positive momentum going. 😊
Portfolio 3 continued its streak of solid gains, building on its impressive performance from the previous week. While it did not have any big winners like Portfolio 1, it did have the highest percentage of weekly gains (63%). However, the 11% drop in Lithium Americas (TSE: LAC) kept the overall gains in check. On a brighter note, the Royal Bank of Canada (TSE: RY) reached an all-time high, following a stellar earnings report.
Overall, it was a solid week for all three portfolios, with a good mix of gains and a few challenges along the way. Portfolio 1 led the charge with a strong rebound from the previous week’s dip and multiple all-time highs, while Portfolio 2 kept its winning streak alive despite having more weekly losses than winners. Portfolio 3 showed solid, consistent growth. Any time I can increase my wealth through my investments, I am happy. Now, let us keep the winning ways rolling! 😊
Companies on the Radar
No new companies caught my eye this week, but I did some housekeeping and trimmed my radar list down to five names. The one change was dropping Constellation Software (TSE: CSU). It is an exceptional company, but the price tag is a little too steep for my liking. While I briefly considered buying a fractional share, it is just not my style—not that there is anything wrong with fractional shares, they are just not for me.
That said, I’m still a fan of Constellation’s management, which is why I’ve kept an eye on Topicus (TSV: TOI), its spinoff. Topicus offers a more affordable entry point while still benefiting from the expertise of Constellation’s leadership. Several senior executives from Constellation, including their CEO Mark Leonard, sit on Topicus’s board. Plus, Constellation retained a significant ownership stake in Topicus during the spinoff, showing their confidence in its long-term growth and highlighting the strong connection between the two companies. It feels like a way to get the best of both worlds! 😊
- On Holding AG (NYSE: ONON), a medium cap Swiss company, founder-run, sports products company.
- Domino’s Pizza (NYSE: DPZ), the well-known American pizza giant.
- Topaz Energy Corp. (TSE: TPZ), a mid-cap Canadian energy investment firm that focuses on strategic investments in premium energy assets operated by top-tier Canadian companies, and currently pays a 4.69% dividend.
- Topicus.com Inc., a mid-cap spinoff from Constellation in 2020, focusing on delivering vertical software solutions in the European Union market.
- Genuine Parts Company (NYSE: GPC), is a large-cap American company that operates globally, providing automotive and industrial replacement parts along with a range of value-added services.
As always, these are not buy recommendations – be sure to do your own research and make decisions that align with your personal financial goals!
The Radar Check was last updated December 6, 2024.
Portfolio Update
Portfolio 1
Portfolio 1 for the week ended December 6, 2024: UP 
- Amazon.com is gearing up to pilot a groundbreaking carbon-removal material for its data centres, aiming to tackle the rising emissions tied to the artificial intelligence (AI) systems they power. Developed by the AI-driven startup Orbital Materials, this innovative carbon-filtering substance promises to cut carbon dioxide output while slashing costs. By reducing the need for pricey carbon offsets, Amazon could make its operations greener and leaner—a win for the planet and their bottom line.
In other Amazon news, Amazon Web Services (AWS) unveiled new data centres powered by its custom-built Trainium2 chips. Designed specifically for AI applications, these chips will compete with Nvidia’s high-end Blackwell chips in the race to capture AI data centre clients. Early adopters include tech giant Apple and AI startup AnthropicAI.
Amazon and Walmart reported record-breaking sales in the US during Black Friday and Cyber Monday this year, surpassing last year’s figures. - General Motors (NYSE: GM) announced they are selling their stake in the Lansing, Michigan joint venture battery plant to partner LG Energy Solution (KSE: 373220). The move come as GM cuts back its electric vehicle (EV) plans amid slowing demand for EVs. GM will retain its interest in the Ultium Cells battery plants.
In other GM news, the company announced plans to record two non-cash charges exceeding US$5 billion tied to its joint venture in China. One charge relates to restructuring the operation, while the other reflects a decrease in its valuation.
Activity
No significant activity to report this week.
Dividends
Dividends Received this week for the following companies:
Canadian $
No C$ dividends this past week.
US $
Visa Inc (NYSE: V)
Quarterly Reports
Bank of Nova Scotia
Fourth quarter 2024 financial results on December 3, 2024
TD Bank Group
Fourth quarter 2024 financial results on December 5, 2024
Portfolio 2
Portfolio 2 for the week ended December 6, 2024: UP
- OpenAI is looking to revise a key clause in its corporate structure to allow Microsoft (NASD: MSFT) to increase its investment in the company and gain full access to all of OpenAI’s technologies, beyond the versions it currently has access to. This change would open the door for more funding from Microsoft, enabling OpenAI to accelerate its ambitions while deepening their partnership in advancing AI innovation.
Activity
Bought: Whitecap Resources (TSE: WCP) This is the final purchase made from the proceeds of trimming my Bank of Nova Scotia shares back in October. It took some time, but the share price eventually dropped to my target bid.
This is my second purchase of Whitecap Resources, effectively doubling my investment in the company. The decision was driven by its attractive 7.3% dividend yield, which provides a steady monthly income stream amounting to an annual payout of C$8.76 per share. This also enables me to take advantage of the dividend reinvestment program, which compounds growth as the monthly dividend exceeds the price of a single share. Beyond the dividend, Whitecap also offers growth potential, especially if oil prices rebound—a realistic prospect given the cyclical nature of the energy sector.
Whitecap has demonstrated strong financial health, with consistent growth in revenue, income, cash flow, and earnings per share (EPS) in recent years. This solid performance underscores its operational efficiency and ability to navigate market challenges effectively. Additionally, the company’s share buyback program highlights management’s confidence in Whitecap’s future and their commitment to enhancing shareholder value. Share buybacks not only signal optimism but also increase the value of remaining shares, benefiting long-term investors like me.
By increasing my position in Whitecap, I am aiming to benefit from both the reliable income generated by its dividend and the potential upside tied to its growth prospects. With strong financials, a shareholder-friendly strategy, and room to capitalize on future opportunities, I feel Whitecap is a solid addition to Portfolio 2.
Dividends
Dividends Received this week for the following companies:
No dividends this past week.
Quarterly Reports
Bank of Nova Scotia
See report under Portfolio 1.
Dollarama Inc.
Third quarter 2025 financial results on December 5, 2024
Portfolio 3
Portfolio 3 for the week ended December 6, 2024: UP
- Fortune, previously known as Fortune Magazine, has named Cloudflare (NYSE: NET) to its Fortune Future 50 list for the second straight year. This year the company was ranked 14th. The list is an annual ranking compiled by Fortune and Boston Consulting Group that they believe are the top 50 companies worldwide best positioned for long-term growth and success.
Activity
No significant activity to report this week.
Dividends
Dividends Received this week for the following companies:
No dividends this past week.
Quarterly Reports
Royal Bank of Canada
Fourth quarter 2024 financial results on December 4, 2024
TD Bank Group
See report under Portfolio 1.