ClearWater Market Commentary as of April 21st, 2023

Here is the ClearWater Market Commentary as of April 21st, 2023:

In this issue:
– Performance of Major Indices
– Market Commentary
– Last Week’s Key Economic  Events and Upcoming Events

Performance of Principle Indexes: 

S&P/TSX Composite Index  
5 Day0.48%
1 Month6.15%
1 Year-5.84%

As of 2023/04/21 – Source:

Index PerformancesLast 5 DaysYTD
FTSE 1002.07%9.31%
CAC 402.02%20.13%
S&P 5001.06%7.89%
Dow Jones Industrial1.04%1.97%
S&P/TSX Composite0.48%6.70%
Russell 20000.40%2.30%
MSCI EAFE0.10%9.70%
Hang Seng Index-0.49%0.92%
Shanghai Composite-3.07%5.10%
WTI Crude (Oil)-5.90%-2.90%

As of 2023/04/21- Source:

Last week’s and next week’s key economic events:

US economy (S&P 500 1.06%):

  • The major benchmarks ended mixed following a week in which first-quarter earnings reports seemed to grab the spotlight from a relatively light economic calendar. Despite the week’s losses, the Cboe Volatility Index (VIX), Wall Street’s so-called fear gauge, fell to its lowest level since late 2021.
  • 88 S&P 500 Index companies had reported earnings as of Friday. Once the remaining reports are in, analysts expect them to show overall earnings for the S&P 500 to have declined for the second consecutive quarter, although early reports have generally surprised to the upside.
  • Thursday’s weekly jobless claims report brought signs of growing weakness in the labor market, but investors appeared divided on whether to treat this as good news—because it might encourage the Federal Reserve to dial back on rate hikes—or worrisome evidence of a coming recession. 
  • Weekly claims rose a bit more than expected, but continuing claims jumped by much more than anticipated and reached their highest level (1.87 million) since November 2021. 
  • Housing data was also soft. Existing homes sales fell, and year-over-year home prices dropped 0.9%, the largest decrease in 11 years.
  • S&P Global’s gauges of current economic activity painted a much different picture on their release Friday, however. According to the firm’s data, private sector employers picked up hiring in early April at the fastest pace in nine months, and work backlogs grew even as businesses added capacity. 
  • The S&P Global US Composite Purchasing Managers’ Index (PMI) of both services and manufacturing activity rose to its highest level in almost a year, which S&P Global analysts attributed to stronger demand, improving supply chains, and strength in new orders. Notably, S&P Global’s manufacturing PMI defied expectations and moved back into expansion territory (50.4) for the first time since October.

Canadian markets (S&P/TSX 0.48%):

  • Strength in technology and industrial stocks helped Canada’s main stock index creep higher on Friday. Canadian stock also benefited from a weaker Canadian dollar. All else being equal, if the Canadian dollar goes down the TSX tends to go up because a lot of stocks are inter-listed in the States.
  • March inflation data (the Consumer Price Index) came in at 4.3% on an annualized basis, which is the smallest increase since August 2021. The biggest driver continues to be mortgage interest costs, though they were offset by a decline in energy prices. Gasoline prices dropped year-over-year for the second consecutive month on a national level. This was mainly because of the steep price increase at the start of the Russian invasion of Ukraine and the uncertainty of energy supply because of the war. 
  • This March’s drop in inflation was in part due to the extreme surge in prices during the early months of 2022, which was driven by energy, durable goods and wheat-based food products.
  • The Canadian dollar rose from a low of $0.72 in March and has appreciated in the early part of April. The Canadian dollar traded for 73.86 cents US, compared with 74.24 cents US on Thursday.
  • The spread between a 2-year U.S. Treasury Bill and a Bank of Canada bond has narrowed, as oil and interest rates have favoured the Canadian dollar. 
  • With recent OPEC+ announcements to cut production helping to prop up commodity prices, there is a more positive outlook on the loonie appreciating relative to the U.S. dollar and many expect it to maintain a higher value in the coming months. 
  • The June crude contract was up 50 cents at US$77.87 per barrel and the June natural gas contract was down two cents at US$2.41 per mmBTU (million British thermal units).
  • The June gold contract was down US$28.60 at US$1,990.50 an ounce and the May copper contract was down five cents at US$3.98 a pound.

Performance 2023: S&P 500 Sectors   

Forward P/E Ratios: S&P 400/500/600 Sectors

European and Asian economies:

  • In local currency terms, European markets were still up as optimism about the economic outlook outweighed concerns about interest rates staying higher for longer. 
  • Eurozone business activity appeared to pick up in April, according to a popular Purchasing Managers’ Index (PMI). A revival of demand in the services sector drove this month-over-month increase, which was the sixth consecutive one. Activity in the manufacturing sector, however, shrank, likely reflecting protests in France that temporarily dented output. 
  • On the inflation front, input and sales prices in services remained at elevated levels, while manufacturing prices continued to fall.
  • The minutes of the March meeting of the ECB showed policymakers were split over the decision to raise benchmark interest rates by half a percentage point. A “very large majority” voted in favor of the decision, as “inflation remained far too high and was projected to remain high for too long.” Still, some members of the Governing Council said they would prefer a pause until tensions in the financial market have subsided. 
  • Annual UK consumer price growth in March slowed by less than expected to 10.1% from 10.4% in February, driven by surging food and drink prices. Separate data from the Office for National Statistics indicated that wage growth showed few signs of moderating in the three months through February. Excluding bonuses, pay increased 6.6% compared with a year ago. The data may prompt the Bank of England to raise interest rates again in May.
  • The composite PMI rose for a third month in March, S&P Global said. Increased business activity in the services sector drove the strongest rate of output growth since April 2022. However, manufacturing production decreased for a second consecutive month due to a decline in new work. Output prices in both services and manufacturing rose strongly due to increased wage pressures.
  • Japan’s stock markets gained over the week as core consumer price inflation remained above the Bank of Japan’s (BoJ’s) 2% target in March, adding pressure on the central bank under its new Governor Kazuo Ueda to take steps to normalize monetary policy. However, ahead of his first monetary policy meeting at the helm on April 27–28, Ueda reiterated the BoJ’s commitment to its easing stance until price stability is achieved.
  • Japan’s core consumer price index (CPI) rose 3.1% year on year in March, in line with expectations and matching February’s reading. After reaching a 41-year high in January, increases in the core CPI have moderated somewhat, largely due to the effect of government subsidies to curb household utility bills.
  • Consumer inflation remains well above the BoJ’s 2% target, however, and along with signs of wage growth gaining momentum, these factors could lead the central bank to consider tweaking its policy of yield curve control (YCC) later this year. The BoJ is widely expected to make no changes to its YCC policy in April, with investors largely focused on the quarterly outlook report due after the monetary policy meeting, which includes inflation forecasts that could be revised upward.
  • April Purchasing Managers’ Index data showed that Japan’s private sector registered solid expansion, as a resurgent services sector, benefiting from the post-COVID reopening, helped offset weakness in manufacturing, which was weighed down by subdued global demand.
  • Although manufacturing activity contracted, the details were slightly more positive given improvement in the new orders-to-inventories ratio and an easing in supply chain pressures. 
  • Chinese equities fell as mixed economic data and news that the U.S. may introduce fresh investment curbs against China weighed on sentiment. 
  • China’s gross domestic product (GDP) expanded a better-than-expected 4.5% in the first quarter of 2023 from a year earlier, compared with last year’s growth pace of 3.0%. Robust export growth and infrastructure investment, and a rebound in retail spending and property prices, drove the recovery. The data prompted several banks to raise their annual growth forecasts for China as consumption continues to recover.
  • In monetary policy news, the People’s Bank of China (PBOC) injected a lower-than-expected RMB 170 billion into the banking system via its one-year medium-term lending facility, compared with RMB 150 billion in maturing loans. The central bank’s latest cash injection was the smallest since November, which markets interpreted as a sign that policymakers were evaluating the impact of March’s easing measures. In a statement following its quarterly monetary policy committee meeting, the PBOC pledged to maintain sufficient credit growth and liquidity as it does not yet see a solid foundation for the domestic economy. The central bank left the medium-term lending rate unchanged, as expected.
  • China’s new home prices increased for a third consecutive month, marking the fastest increase since June 2021, according to the National Bureau of Statistics. China’s real estate sector has been in a downturn in recent years as Beijing sought to reduce leverage among developers, triggering a wave of defaults and causing many firms to struggle with slowing sales and high debt levels. The sector has shown signs of stabilizing this year, bolstered by a government rescue package last November that included measures such as stepping up financial support for property companies, lowering mortgage rates, and easing homebuyer restrictions in many cities.

What to watch this week:

  • New Home Sales (Mar)
  • CB Consumer Confidence Index (Apr)
  • Retail Inventories (Mar)
  • U.S. Gross Domestic Product (GDP) – Advance Estimate (Q1 2023)
  • Real Consumer Spending (Q1 2023)
  • Pending Home Sales (Mar)
  • Chicago Purchasing Managers’ Index (PMI) (Mar)
  • University of Michigan Consumer Sentiment Index – Final (Mar)

Sources:,, Barron’, and

Thank you for checking out our ClearWater Market Commentary for April 21st, 2023. If you would like to receive the ClearWater Commentary at the start of every week, sign-up for our Newsletter.