Stock Market State of The Union

2023 ever been an incredible year. We’ve had some big ups and downs in both the stock and bond markets.

The Bank of Canada took its interest rate from 4.25% at the beginning of the year to 5% on July 12 which is where we finished the year.

We held portfolios steady for the first half of the year and we were surgical in the second half of the year.

Here’s what’s included in this article:

  • Biggest winners and losers in the S&P 500
  • Trades done in 2023 along with returns
  • TFSA limit in 2024
  • CRA personal income tax filing deadline
  • RRSP contribution deadline
  • Bank of Canada 2024 announcement dates
  • Economic data: Today’s data
  • Analysis and playbook for 2024
  • Risks for 2024 and beyond

Biggest Winners & Losers

For the first half of the year, I didn’t do many trades as I had a focus on US dividend stocks. The darlings of H1 2023 were mega cap tech stocks that had something tied to artificial intelligence.

That strength continued for many. Nvidia was up 239% at year end. Nvidia had released their newest chip processors that were specifically geared towards AI processing. OpenAI announced a more advanced version of ChatGPT and Dall-e which gave a proof of concept and an example of how to monetize the product.

Meta, formerly Facebook, was up 194%, Royal Caribbean was up 162%, Blackstone was up 83% and General Electric was up 96%.

Amazon was up 80.8%, Google up 58.83%, Microsoft up 56.80% and Apple up 48.18%.

The biggest losers were FMC (fertilizer and chemicals) down 48%, Moderna down 45%, Dollar General down 44%, Nextera Energy down 25%

Index wise:

  • TSX (Canadian Index): up 8%
  • S&P 500 (US Dollar): up 24%
  • US Nasdaq (US Dollar, tech focused): up 43%

US Sectors:

  • Industrials: up 16%
  • Financials: Up 10%
  • Energy: Down 5%
  • Utilities: Down 10%
  • Healthcare: Flat

Bond wise, Canadian 5 year bond lost 7.3%, not accounting for interest coupons.

US 10 year treasury bond was almost flat, not accounting for interest coupons.

Trades Done This Year

I was largely silent in the first half of the year hoping for breadth of market as the first half was dominated by big tech.

As new money came in I was patient and picked up the easy returns. I staged into markets on pull backs and held onto high yielding cash where possible. For the second half of the year, ticker CSAV, which is a high interest savings account was yielding over 5% annual interest.

It funny how there is a change at certain points in the year. End of June marks half of the year and where most people start summer vacations. Jan 1 marks the end of the year. In reality those are just days. I put more weight on October as investment professionals come back from summer break in September and focus on what’s working and what’s not working. Then realign heading into year end.

At the end of June Nvidia was up 166% and the AI enthusiam was in full effect. The VIX, which is a measure of fear, was incredibly low at around 13.

Low fear can mean too much stock market excitement and be an indicator of a sell-off on the way.

I reduced equity where possible and sat tight, waiting to put more money into stocks. I was overweight cash and bonds.

October came around with the markets having sold off and interest rates having another go at decade highs. The US 10 year tried multiple times but failed to breach the 5% yield level.

When US Federal Reserve Chair Jerome Powell spoke at the end of October, it was a major shift in policy rhetoric.

I saw the opportunity to buy as some things that had gotten incredibly cheap.

1) Bonds looked like they topped out. I went all in with longer dated Canadian government bonds. That trade has gone up by 7% over the last two months. I don’t expect these returns to continue as I think some of the interest rate excitement is overdone but I still see some value. See below for a more in depth explanation. I used the ticker XLB-CA to achieve this.

2) I invested core positions in ZUD-CA (US dividend stocks, currency hedged ETF) bringing the accounts into desired stock/bond allocations. Trade is up over 8%.

3) For select accounts that had more risk tolerance I invested in US bank stocks, ticker ZUB-CA. The ETF had a lot of US regional banks that had been badly beaten down. They were trading at 4-8 times earnings which is incredibly cheap. That trade is now up over 22%.

Note: These are not typical returns to be expected in accounts and not all accounts received these trades. Further this does not factor in the entire portfolio performance.

Important Info For 2024

  • TFSA contribution limit for 2024 is $7k. This means that if you’ve never contributed and were 18 when the program was announced, then you can contribute a total of $95,000.
  • RRSP contribution deadline is February 29, 2024
  • Personal income tax CRA filing due for most individuals is April 30, 2024

Bank of Canada Annoucement Dates

Dates Publications
January 24 Interest rate announcement and Monetary Policy Report
March 6 Interest rate announcement
April 10 Interest rate announcement and Monetary Policy Report
June 5 Interest rate announcement
July 24 Interest rate announcement and Monetary Policy Report
September 4 Interest rate announcement
October 23 Interest rate announcement and Monetary Policy Report
December 11 Interest rate announcement


Current Economic State


  • Unemployment rate is still well below any signs of stress and although rising, we are likely still in a fully employed state.
  • Wages are rising. While not good for inflation it is nice to see the consumer getting some reprieve from the previous very high inflation that we experienced.
  • The labour force participipation rate is still a little low but to be expected given the demographic shift of the baby boomers into retirement. High immigration levels will likely increase this number or put a floor under dropping levels.
  • GDP growth is slowing, a measure of productivity for the country.
  • US dollar was about 2% different than when it started the year.
  • GDP per person is failing to be meaningfully above pre-pandemic levels.
  • Manufacturing and services are contracting.
  • Household debt to income is still at troubling high levels, 179%.
  • Household debt to GDP is also at concerning levels.
  • Core inflation (inflation less energy and food) is around 2.8%.

United States:

  • Unemployment, while rising is at extremely low levels.
  • Echoed in Canada, the wage growth is a welcome reprieve to ease the previously high inflation costs.
  • Labour force participation rate is a little low but that can help backfill jobs when the job market becomes less tight.
  • GDP growth is holding in stronger than Canada.
  • GDP per person is above pre-pandemic levels and continuing to rise.
  • Manufacturing is in contraction but services are in expansion territory.
  • Household debt to GDP is healthy.
  • Household debt to income is much more comfortable, ~107%.
  • Core inflation (inflation less energy and food) is around 4%.

Analysis & 2024 Playbook:

Canada will get the flu if the US gets a cold. The structure of mortgages in the US with longer mortgage renewal times, will take longer for consumers to feel the pinch of new debt.

In Canada the typical rate reset cycle of 5 years or less with an average of 3 years. We are in our third year of higher interest rates and the wave of renewals that will cause higher household expenses puts Canadians at a relative disadvantage to the US counterparts.

Canada’s very high debt levels puts it at risk.

The good news is that Canadian core inflation is coming down faster and is at a lower level.

The Bank of Canada may be able to decrease rates faster than the US. This would be nice for Canadians but doesn’t make a large difference when it comes to the stock market as the US isn’t likely much farther behind.

Markets are pricing in about 1.75% of interest rate cuts in 2024. I see this as too aggressive which is why I believe bond prices have already reach most of their gains that they’ll have for the year. I see this year being difficult for bonds in particular.

I see US dividend stocks performing well as the breadth of the positive market increases to more than the mega cap tech stocks.

There is still good value in US regional banks. I also see value in Canadian banks as they will likely come up with measures to keep Canadians in homes.

I expect these measures to include extending amortizations. This will be a negative to the long term financial health of Canadians as it will take longer to repay debt and increase their interest costs. This will however allow the person to stay in their home.

In this scenario, Canadian banks will keep lower provisions for credit loss and increase their revenue from interest. Plus if they don’t have to rewrite their loans and they retain more of their book then their net interest margin will also likely remain healthy.

A recent change to how banks classify capital from high interest savings ETF’s has already caused those products to reduce their interest rates marginally. We’ll wait to see if there are any further developments to the returns.


Of course with everything we do in life, there are always risks. Going to work involves communiting to work where people can get into car accidents. The health benefits of exercise have also been the cause of heart attacks for some people.

This doesn’t mean that we don’t go to work nor does it mean that we stop exercising.

This also doesn’t mean that we don’t invest.

When investing we need to be mindful of the potential risks. The biggest risks are the risks that we haven’t identified yet. Here’s a list of some of the things that I’m watching closely:

  • Commercial mortgage debt renewals
  • Debt delinquincies
  • Further geopolitical escalations that affect the flow of goods and services
  • Oil price shock upwards

Notice that I did not include elections or wars.

The only things that matter from an economic view are things that affect the flow of goods and services.

If it doesn’t impact the flow of goods and services then over the medium and longer term, those issues will be irrelevant to the market. There may be an initial knee jerk reaction but they typically don’t matter over a longer period of time.

What to do

If you read this far then you are likely in the 1% of readers who actually read the entire article.

If you’re a client: Thank you

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If you know someone (anyone) then recommend us to them and we would love to help them out.

Until next time,


Trevor Dale, CFA

CEO, TK Dale Wealth Inc.

Portfolio Manager, TK Dale Wealth Management Inc.

Life Insurance Agent, TK Dale Wealth Insurance Inc.

Mortgage Broker, TK Dale Wealth Mortgages Inc. Lic. #13359

*Disclaimer: Please note that this communication contains forward looking information. We do not guarantee or warrant these statements and cannot guarantee that the outcomes will occur. This is not individual advice and you should seek the help of a licensed professional. This is not intended to solicit residents outside of Ontario, Canada. We do not provide tax or legal advice. Securities mentioned in this communication are not recommendations. We do not endorse nor recommend any securities mentioned. This is not financial advice. We recommend seeking the help of a licensed professional prior to making investment and financial decisions.