Making sense of the markets this week: May 19, 2024 + MORE May 17th

The national average home price came in at a hefty $703,446 in April, according to the Canadian Real Estate Association (CREA). While that marks a slight 1.7% dip from the same time period last year, it means today’s home buyers are shelling out $200,000 more to buy an average-priced home than they would have five years ago.

The short-term affordability picture isn’t looking any rosier. The latest monthly affordability study from Ratehub.ca finds that borrowing conditions got tougher in 10 out of 13 of Canada’s major housing markets in April, largely due to month-over-month growth in home prices. (Ratehub and MoneySense are both owned by Ratehub Inc.) 

The study determines affordability based on the minimum income required to buy an average-priced home based on regional real estate data, as well as mortgage and stress test rates…

Investing

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By Keph Senett and Justin Dallaire on May 17, 2024Estimated reading time: 22 minutes

Currently, Canadians can find many GICs with rates in the 4% to 5% range—that’s good compared to a few years ago, but not quite the 6% you could get last fall…

Inflation is down, so stocks go up

The correlation between lowering inflation rates and inflated stock prices continued this week.

The U.S. Bureau of Labor Statistics reported that the American Consumer Price Index (CPI) increased by 0.3% in April, which was slightly lower than what most economists had predicted.

In response, the S&P 500 index was up 1.17% on Wednesday, closing above 5,300 for the first time ever. The Nasdaq was up 1.40% on the day, and the Dow Jones was up 0.88% (and then briefly passed 40,000 for the first time on Thursday before closing just below that milestone).

Source: CNBC.com

It’s clear that U.S. market investors are eagerly awaiting signs that a new era of “cheap money” is about to begin, despite several cautious comments from the U.S. Federal Reserve Chair Jerome Powell…

Yet as difficult as these very real challenges are, they alone fail to fully explain why financial worry is running rampant. Could it actually be a symptom of a larger, more pervasive issue?

As a financial recovery expert and founder of The Trauma of Money, an online program that trains mental health and finance professionals in approaches to healing psychological traumas and creating financial safety, I see money trauma as the real problem. From my vantage point, our dominant economic culture can both cause trauma and activate previous trauma related to security and worth. 

Below, I unpack the top financial stressors Canadians are facing, help you understand how to recognize money trauma, and offer meaningful interventions to help you begin your healing journey.

Why are Canadians stressed about their finances?

Canadians are literally losing sleep over their finances with 1 in 2 (48%) reporting sleepless nights due to financial worries, according to the 2023 Financial Stress Index…