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Independent Accountants' Investment Counsel Inc.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

  • North American equity markets continued to react to news that economies are slowing. 

  • On Friday, equities rebounded with all major Canadian and American indexes rising. 

    • The up-and-down days of the week produced uneven results for the week for the indexes. 

    • The TSX and NASDAQ gained the amount that the S&P 500 lost, about two-thirds of a percent.

    • The Dow, comprised of the 30 largest industrials, lost nearly 3% for the week, even after rising 1% on Friday.  

 

What’s ahead for this week?

  • In Canada, the Bank of Canada will release its latest monetary policy and interest rate announcement on Wednesday morning at 10 am Eastern.  Moderating domestic and U.S. inflation data, along with employment and GDP, will heavily influence decisions on rates and liquidity.

  • In the U.S., the week will start slowly for economic announcements, but gain momentum as fourth quarter GDP, trade balance, real consumer spending and Personal Consumption Expenditures (PCE) are released.  Personal income and spending, and the PCE price index for December are scheduled for Friday.

  • Globally, celebrations of China’s new year on January 22nd have slowed economic activity and raised the concern of further outbreaks of Covid following the extensive amount of travel associated with the holiday.  Japan will release its latest CPI, which may provide some insight into the Bank of Japan’s surprise interest rate decision last week.

 

For more information contact: [email protected]

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 

 

©Copyright 2023 Independent Accountants’ Investment Counsel Inc. All rights reserved.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

  • Thursday’s release of U.S. consumer inflation data continued the run of positive performance for equities so far in 2023.  The Consumer Price Index (CPI) declined by 0.1% in December and compared to December 2021 prices have risen 6.5% on a year-over-year basis.  Inflation had peaked in June at 9.1% and had been 7.1% in November 2022.  Core CPI, which excludes food and energy from the basket of consumer goods and services, rose 0.3% in December and 5.7% over the last year. 

  • “The index for gasoline was by far the largest contributor to the monthly all items decrease, more than offsetting increases in shelter indexes” according to the Bureau of Labor Statistics. 

  • The overall rate of consumer price increases suggests that past monetary policy moves have begun to affect inflation.  Both the Bank of Canada and Federal Reserve have raised their policy interest rates by 4% since March of 2022. 

  • Canadian consumer inflation data for December will be released next week, which will provide some guidance for the Bank of Canada.  CPI was 6.9% in October and 6.8% in November on a year-over-year basis.  The next scheduled interest rate announcement for the Bank of Canada is January 25th and will include the quarterly Monetary Policy Report.

(Source1, Source2, Source3, Source4,)

 

What’s ahead for this week?

  • In Canada, manufacturing sales, wholesale sales, retail sales, and housing starts will be released.  The most important report will announce consumer and producer inflation for December.

  • In the U.S., markets will be closed on Monday for the observance of Martin Luther King, Jr Day.  Producer inflation, retail sales, mortgage market index, industrial and manufacturing production, building permits, housing starts, and existing home sales will be reported.

  • Globally, consumer inflation releases continue with Germany and Italy contributing their country-data, as well as the entire Eurozone report.  On Friday the European Central Bank Chair, Christine Lagarde will speak.  China will release its fourth quarter Gross Domestic Product, industrial production, retail sales and unemployment rate.  The Bank of Japan has an interest rate decision scheduled for Tuesday.

For more information contact: [email protected]

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 

 

©Copyright 2023 Independent Accountants’ Investment Counsel Inc. All rights reserved.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

  • Friday provided a welcome uptick in North American equity indexes after jobs data was released.  Both the Canadian and American economies continued to generate jobs even after monetary policy moves that have been enacted on both sides of the border.  The jobs market demonstrated continued resiliency and provided encouragement on the “interest rate increase vs recession” debate.

  • “Employment rose by 104,000 jobs in December, and the unemployment rate declined by 0.1 percentage points to 5.0%, just above the record low of 4.9% reached in June and July” according to the Statistics Canada release on Friday.  Employment levels increased in six provinces and held steady in two territories. (Source)

  • Total nonfarm payrolls rose by 223,000 jobs and the unemployment rate edged down to 3.5% during December in the United States.  Job gains were achieved in leisure and hospitality, health care, construction, and social assistance sectors. (Source

  • The U.S. jobs growth in December was the lowest monthly number in 2022, and the average hourly earnings number is softening, showing that Federal Reserve action is working.  Both suggest that the Federal Reserve’s interest rate increases and tightening of capital markets are beginning to achieve the desired effects of slowing demand that drives economic growth. 

  • More interest rate increases are expected from the Federal Reserve, while the Bank of Canada has said that future increases require additional analysis.  Markets responded positively to the jobs data based on monetary policy effectiveness. (Source

     

 

What’s ahead for this week?

  • In Canada, November’s building permits, signifying strength or weakness in the construction sector and housing market will be announced.  Bank of Canada Governor, Tiff Macklem, will participate in a panel discussion on the risk of climate change.

  • In the U.S., Federal Reserve Chair, Jerome Powell, will speak at the Sveriges Riksbank International Symposium in Stockholm on Tuesday.  On Thursday, December and year-over-year consumer inflation data will be released.

  • Globally, the European Central Bank will release its latest economic bulletin.  Great Britain will report its Gross Domestic Product report for December, the fourth quarter and year-over-year.  Italian retail sales, French imports and exports, and German GDP will also be announced.  Both China and Japan will release CPI and Producer Price Index (PPI) data for December.

For more information contact: [email protected]

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 

 

©Copyright 2023 Independent Accountants’ Investment Counsel Inc. All rights reserved.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

  • It was a short week for Canadian traders with markets shuttered on Monday and Tuesday for the observance of Christmas Day and Boxing Day.  U.S. markets do not observe Boxing Day.

  • Despite the lower trading volumes typical for this period, the equity markets continued their recent path with additional losses.  The North American indexes lost only small amounts during the most recent week but have lost substantial value over the past year.  The TSX and Dow declined by nearly 9% for the year.  The S&P 500 and NASDAQ lost nearly 20% and 34%, respectively over the last year.

  • Since the last Weekly Market Update two important indicators were released in Canada. 

    • November’s consumer inflation data was reported on December 21st.  The year-over-year rate in November was 6.8%, following October’s 6.9% annual increase.  Gasoline prices fell 3.6% in November and are up by 13.7% over the past year.  Grocery prices have risen 11.0% year-over-year, and prices for housing have risen 7.2% over the same period as mortgage rates and rents rose. (Source)

    • On December 23rd Gross Domestic Product (GDP) numbers showed the Canadian economy had grown 0.1% in October, down from September’s 0.2%.  Service industries (arts, entertainment, recreation, accommodation, food services, transportation, warehousing, and the public sector) expanded, while mining, oil, gas, and manufacturing declined. (Source)

  • The “third estimate” of U.S. third quarter GDP was announced on December 22nd and showed that the economy expanded at an annualized rate of 3.2% during Q3 after declining 0.6% in Q2. (Source
  • The progress of monetary policy against inflation and on economic output (i.e., GDP) will guide markets well into 2023. 

 

What’s ahead for this week?

  • In Canada, on Friday the latest employment numbers, for December, will be released.  The strength (or weakness) in the numbers may foreshadow Bank of Canada monetary policy decisions.

  • In the U.S., December’s jobs information, labour force participation and unemployment rate will be reported by the Bureau of Labor Statistics on Friday.

  • Globally, consumer inflation data will be announced for Germany in particular and the entire Eurozone more generally.  Like other jurisdictions, inflation numbers will influence central bank policy.

For more information contact: [email protected]

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 

 

©Copyright 2023 Independent Accountants’ Investment Counsel Inc. All rights reserved.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

  • For two consecutive weeks, monetary policy announcements influenced North American equity markets.  On December 7th the Bank of Canada increased its overnight rate by ½% (50 basis points), and on December 14th the U.S. Federal Reserve increased its benchmark rate, the federal funds rate, by the same amount.  The central banks of both countries have increased interest rates at their last seven consecutive opportunities.  Also, both institutions have raised their rates by 4¼% since March 2022. 

  • At least one important difference has emerged.  The Bank of Canada has said that future interest rate increases may not be necessary, while the Federal Reserve is anticipating additional increases to control inflation which is well above both of their targets of 2%. The Bank of Canada stated, “. . . Governing Council will be considering whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target”, while the Fed said, “The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.” (BoC statement, Fed Statement)

  • On December 15th, the European Central Bank (ECB) raised its rates with an identical 50 basis point increase.  The ECB’s equivalent to the Canadian overnight and the American federal funds rate is the deposit facility rate and is now 2.0%, less than half the comparable rates in North America. (Source)

  • The fear of a recession caused by rising rates that slow economic growth sufficiently to shrink inflation is the major concern for markets.  Equity markets dropped immediately following the Fed’s announcement and accompanying commentary, and on the following day more than 90% of S&P 500 stocks dropped as the overall index fell more than 1%. (Source)

 

What’s ahead for this week?

  • In Canada, no major economic announcements are scheduled.

  • In the U.S., consumer inflation data will be released on Tuesday, and may provide an indication of the Federal Reserve’s monetary policy actions scheduled for this coming Wednesday. 

  • Globally, on Thursday the European Central Bank will release their interest rate decision, and the Eurozone will publicly announce consumer inflation on Friday. 

For more information contact: [email protected]

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 

 

©Copyright 2022 Independent Accountants’ Investment Counsel Inc. All rights reserved.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

  • For many the most significant change affecting daily life was the drop in the price of crude oil.  It will help lower inflation and improve the perception of inflation through the gas pump.  The price of oil is below its 2022 start, and within pennies of its price from one year ago.

  • However, the major domestic economic news was the action taken by the Bank of Canada on Wednesday morning.  The "overnight rate" was raised by 0.5% (50 basis points).  It was the seventh consecutive increase, dating back to early March.  During the last 9 months the rate has risen from its effective, lower boundary of 0.25% to 4.25%. 

    • During the announcement, Tiff Macklem, Governor of the Bank of Canada indicated that a pause in rate hikes was a possibility when he said, “But we recognize that we have raised interest rates rapidly and that their effects are working their way through the economy. In other words, we are moving from how much to raise interest rates to whether to raise interest rates.”  The widely held belief is that interest rates will reduce demand to match supply and reducing and eliminating rate hikes at the appropriate times will allow inflation to be mitigated without pushing the economy into a recession. (Source1, Source2, Source3)

  • More inflation news emerged last week with the U.S. Producer Price Index (PPI) release.  The PPI measures inflation at the wholesale level.  Producer prices rose 0.3% in November and 7.4% for the 12 months ending in November.  In October, the 12-month PPI increase was 8.1%.  The PP began 2022 over 10% and had exceeded 11% for four months (March to June) before moving downward during late summer and autumn to its current level.  (Source)
  • Inflation news will be in sharp focus again next week as U.S. consumer prices and a Federal Reserve monetary policy announcement are scheduled.

 

What’s ahead for this week?

  • In Canada, no major economic announcements are scheduled.

  • In the U.S., consumer inflation data will be released on Tuesday, and may provide an indication of the Federal Reserve’s monetary policy actions scheduled for this coming Wednesday. 

  • Globally, on Thursday the European Central Bank will release their interest rate decision, and the Eurozone will publicly announce consumer inflation on Friday. 

For more information contact: [email protected]

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 

 

©Copyright 2022 Independent Accountants’ Investment Counsel Inc. All rights reserved.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

  • Gross Domestic Product and jobs data heavily influenced markets, and the inferences drawn from those releases on upcoming interest rate announcements provided an additional batch of fodder for analysts. 

    • The Canadian economy expanded slightly during the third quarter, rising 0.7%.  It was the fifth consecutive quarter of rising GDP.  Oil and gas production grew 1.8% in September when a new record for crude bitumen production was set.  Agricultural production rose 0.7% for the month, which is the twelfth consecutive month of increased output. (Source)

    • During July, August and September 2022 the U.S. economy grew in real GDP terms at an annualized rate of 2.9%, compared with a decline of 0.6% in the second quarter.  Leading the growth were increases in exports, consumer spending, and government (local, state, and federal) spending. (Source)

  • Employment was little changed (+10,000) in November, and the unemployment rate declined by 0.1 percentage points to 5.1%” according to another StatsCan release. (Source)
    • Total non-farm payroll employment rose by 263,000 last month in the U.S.  The unemployment rate was unchanged at 3.7% as the participation rate held steady. (Source
  • GDP and jobs data show the resilience of the Canadian and, especially, the American economy as monetary policy has been tightened in 2022.  The next interest rate announcements by the Bank of Canada and Federal Reserve on December 7th and 14th, respectively, are subject to speculation.  The speech on Wednesday from Fed Chair, Jerome Powell, and the immediate market bump demonstrates the influence of monetary policy on equity values.(Source1, Source2)

 

What’s ahead for this week?

  • In Canada, October’s imports, exports, and trade balance, building permits, and industrial utilization will be announced.  On Wednesday at 10 AM EST the Bank of Canada will make an interest rate decision.

  • In the U.S., several economic indicators are scheduled including factory and durable goods orders, imports, exports, and trade balance, Producer Price Index (PPI), core PPI, gasoline, crude oil and heating oil inventories.

  • Globally, Eurozone GDP, retail sales and employment for Q3, China’s Consumer Price Index, PPI and trade balance, Japan’s GDP and household spending will be reported.

For more information contact: [email protected]

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 

 

©Copyright 2022 Independent Accountants’ Investment Counsel Inc. All rights reserved.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

  • The U.S. Thanksgiving holiday closed American markets on Thursday and Friday afternoon

  • During this quieter than usual time, equities in Canada and the U.S. performed well last week as the major indices rose 1-2%.  Since their closing levels of September 30th, the indexes have risen as follows, TSX 10.5%, S&P500 12.3%, Dow 19.6%, NASDAQ 6.2%.  The overall increase during the past two months has been inconsistently achieved with several days of sharp peaks and narrow valleys.  The sharper days of gain and loss are in contrast to the volatility index, which has fallen from 31.8 to 20.5 over the same period and is at its lowest level since August. (Source)

  • The lower levels of volatility are an anticipation that central banks will begin raising interest rates more slowly.  The release of the Federal Reserve’s meeting minutes showed that this sentiment is building with the Fed’s Federal Open Market Committee, who sets monetary policy.   The realized prediction calmed markets, despite indications that more interest rate increases are anticipated. (Source1, Source2, Source3)

 

What’s ahead for this week?

  • In Canada, Gross Domestic Product (GDP) for September and the third quarter will be released.  Employment data for November will be reported on Friday. 

  • In the U.S., after Thanksgiving’s relatively quiet week the announcements increase to include pending home sales, house price index, mortgage applications, mortgage market index, GDP, GDP price index, consumer and personal spending, wholesale, and retail inventories.  The week concludes with government, manufacturing, and non-farm payrolls.

  • Globally, the FIFA World Cup continues to distract many countries from economic developments like OPEC’s production meeting, Eurozone’s consumer confidence, business climate and inflation expectation, and Consumer Price and Producer Price Indexes.  China’s rapidly growing covid cases and response may foreshadow future releases from the second largest economy.

For more information contact: [email protected]

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 

 

©Copyright 2022 Independent Accountants’ Investment Counsel Inc. All rights reserved.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

  • Interest rates, inflation and recession concerns continued to influence markets last week. The mixed news, and its implications had equities falling for the week, albeit only slightly. 

  • For the second consecutive week, a key U.S. inflation indicator has fallen.  The Producer Price Index (PPI), which measures inflation at the wholesale level, had its year-over-year rate at 8.0% for October.  The annualized rate of producer inflation has dropped from over 10% earlier this year and a peak in March 2022 of 11.7%.  On November 10th the latest Consumer Price Index (CPI), also for October, was reported.  The annual inflation rate dropped to 7.7% from September’s 8.5%. (Source1, Source2)

  • Domestically, Canadian consumer inflation for October equalled September’s annual rate at 6.9%.  Gasoline and housing cost increases were offset by slowing increases for groceries (fruit, vegetables, and meat).  Gasoline rose 9.2% in October after falling 7.4% in September.  Overall, monthly price increases in October were 0.7%.   Although Canada’s CPI did not fall, it also did not increase. (Source)

  • The Organization for Economic Development and Cooperation (OECD) will soon release its inflation and growth analysis.  Since their last projections in September the outlook has worsened.  Inflation rose, notwithstanding some recent, minor successes, European economies have contracted, a resurgence of Covid with strong restrictions in China, and growing predictions of U.S. economic contraction next year.  The predictions of inflation-fighting rate increases, their effectiveness and effect on GDP will guide markets into 2023 and beyond. (Source1, Source2) 

 

What’s ahead for this week?

  • In Canada, retail, wholesale, and manufacturing sales for September will be reported on Tuesday along with the new housing price index.  The Federal budget balance will be released on Friday.

  • In the U.S., the mortgage market index, building permits, housing starts, and new home sales scheduled for release.  Markets will close on Thursday and early on Friday for Thanksgiving.

  • Globally, Germany, the leading European economy, will announce its Gross Domestic Product, the European Central Bank will conduct a non-monetary policy meeting, and the Eurozone’s consumer confidence will be released.  Japan, the third largest economy, will report its consumer inflation.

For more information contact: [email protected]

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 

 

©Copyright 2022 Independent Accountants’ Investment Counsel Inc. All rights reserved.

(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)

 

What happened last week?

  • U.S. consumer inflation was released midweek and generated a rebound from recent losses.  Price increases were below expectations at 0.4% for October and 7.7% on a year-over-year basis.  The monthly increase repeated September’s level while annual inflation fell to its lowest level since January, and 1½% below June’s recent peak.

  • The major contributors to inflation remain housing, food, and gasoline.  Inflation exists across a broad array of goods and services, and the drop in the annual inflation in October has not significantly reduced the overall inflation rate relative to the long-run average target set by the Federal Reserve of 2%.

  • Caution should still be exercised with inflation still running very high and the jobs market still strong.  With little ‘slack’ created in the jobs market it will be difficult for inflation to fall back toward target levels that will eliminate the need for monetary policy action.

  • Markets reacted with optimism when North American equity indexes posted their best trading day since 2020 by jumping 3½ to 7½% on Thursday.

(Source1, Source2, Source3)

 

What’s ahead for this week?

  • In Canada, the week begins with a speech by Bank of Canada Governor, Tiff Mackle.  The economic indicators scheduled include manufacturing and wholesale sales, housing starts and CPI for October.

  • In the U.S., it will be the Producer Price Index (PPI) and import and export price indices that are released to measure American inflation.  Retail sales, capacity utilization, industrial and manufacturing production, business, gasoline, crude oil inventories, building permits, housing starts, and existing home sales will also be announced in a busy week for economic reporting.

  • Globally, the Eurozone will release its trade balance, industrial production, Q3 employment and Gross Domestic Product and CPI for the region as well as France and Italy, individually.  China will announce retail sales, house prices, and industrial production.  Japan will report its GDP, capacity utilization, industrial production, trade balance and consumer inflation.

For more information contact: [email protected]

www.iaic.ca | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2

 

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