Making sense of the markets: Trying again on 2024

Tech stocks will underperform the TSX Composite

In similar fashion to our Canada versus U.S.A. bet explained above, the TSX Composite did not beat tech stocks, if we define tech stocks as the Nasdaq 100 (the 100 largest stocks on the Nasdaq stock exchange). That said, since early July, the Nasdaq is up about 6.5%, while the TSX Composite is up 15% over the same period.

Canadian GDP per capita would continue to fall

Unfortunately, we hit this one on the head. Gross domestic product (GDP) per capita fell throughout 2024. We’ve now suffered six consecutive quarters of falling GDP per capita. Since 2014Canada hold 27th out of 30 advanced economies when it comes to GDP per capita growth.

Once adjusting for immigration, the Canadian economy has essentially been stuck in neutral for 10 years now. Here’s a look at the divergence of our economy versus that of our largest trading partner.

Source: The Hub

This is what the future will look like if current productivity trends persist:

Source. Fraser Institute

Flatlining GDP numbers continued to generate more talk of “Is it a recession or not?”

Yup, we’re still talking about a recession. Just a couple of weeks ago, former Bank of Canada Governor Stephen Poloz said“I would say we’re in a recession, I wouldn’t even call it a technical one. A technical one is a superficial definition that you have two quarters of negative growth in a row, and we haven’t had that, but the reason is because we’ve been swamped with new immigrants who buy the basics in life, and that boosts our consumption enough.”

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Oil prices stayed below USD$85 per barrel

While we were right on this one, it might appear to be obvious in hindsight. It can be easy to forget just how bullish some investors were about oil 12 months ago. In late December 2023, Barclays predicted the WTI price would average USD$93and Bank of America predicted USD$90. We’re available if either of those two institutions would like to us lead their fossil fuels analyst teams.

Source: CNBC

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Crypto might be volatile, but finished 2024 up 50% (plus)

Bullseye! As you’re going to learn as you continue to read, we didn’t get everything right this year. We certainly couldn’t have forecasted a presidential candidate would buy a major stake in a cryptocurrency firmthen go from saying bitcoin was a “scam” to taking about a quarter-billion dollars from the crypto industry and becoming its biggest promoter.

Bitcoin did fall more than 25% from March to August in 2024, before the current rally fuelled by president-elect Donald Trump. That event now has bitcoin up 125% year-to-date. Despite predicting the BTC rally, we remain just as skeptical as we were a year ago. To make it into my portfolio an investment must have profits and/or cash flow, and BTC has neither.

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