ClearWater Market Commentary as of February 4th, 2022

Here is the ClearWater Market Commentary as of February 4th, 2022:

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 Day0.82%
1 Month0.89%
1 Year17.29%

As of 2022/02/04 – Source:

Index PerformancesLast 5 DaysYTD
WTI Crude (oil)6.20%22.60%
Hang Seng Index2.83%4.61%
Shanghai Composite1.91%-5.89%
S&P/TSX Composite0.82%0.23%
Nikkei 2250.73%-5.53%
FTSE 1000.70%1.79%
Dow Jones Industrial-0.12%-3.44%
S&P 500-0.33%-5.57%
CAC 40-0.68%-2.82%
Russell 2000-1.29%-10.82%

As of 2022/02/04 – Source:

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

US economy (S&P 500 -0.33%):

  • Equity markets remained volatile but recorded overall gains for the second consecutive week. Breaking with a pattern of value outperformance largely in place since November, growth and value shares performed similarly, while mid-and small-caps outpaced large-caps.
  • It was one of the busiest weeks of the fourth-quarter earnings reporting season, with 112 companies in the S&P 500 Index scheduled to report results.
  • These included several mega-cap names, which drove significant moves in the overall benchmarks.
  • Energy shares performed best, building on their significant lead for the year as U.S. oil prices rose above USD 90 per barrel and as major oil exporters agreed to stick to only a modest production increase in the face of high demand.
  • The unemployment rate ticked higher to 4.0%, but this seemed to reflect an increase in the labour force participation rate, which rose to its highest level since the start of the pandemic.

Canadian markets (S&P/TSX 0.82%):

  • Canadian equities were a top performer with the gains broad-based, but Canada’s energy exposure is most certainly attracting attention as oil prices crest US$90/bbl.
  • Strong U.S. jobs numbers also helped on Friday, while a weak employment report in Canada didn’t seem to hurt the Toronto market.
  • In Canada, the economy lost 200,100 jobs in January, the highest number in a year, amid stricter public health rules put in place to slow the COVID-19 variant. The job losses also pushed the unemployment rate to 6.5 percent last month compared with 6.0 percent in December.
  • Despite January’s dust-up in stock markets, little has changed. The infotech sector is still the most expensive, while energy, materials and financials are still the cheapest – playing to the TSX’s strengths.
  • Case in point, the TSX energy sector only surpassed its pre-pandemic level this January and is up ~12-15% cumulative (price only) from late 2019 – oil prices in 2019 were relatively stable around US$57 a barrel, two-thirds of where they are now.

Performance 2021: S&P 500/400/600 Sectors

European and Asian economies:

  • Equities in Europe weakened after European Central Bank (ECB) President Christine Lagarde made comments that appeared to leave the door open for a possible rate increase this year.
  • At a press conference following the ECB’s policy meeting, President Lagarde declined to reiterate that it was “very unlikely” that the central bank would raise interest rates this year after being asked about the market appearing to price in some tightening in monetary policy. “You know, I never make pledges without conditionalities, and it is even more important at the moment to be very attentive to that.”
  • Her comments came after the ECB decided to keep its deposit rate at a record low of -0.5% and stuck to plans to reduce asset purchases this year.
  • Data released earlier in the week showed that eurozone inflation unexpectedly ticked up to a new record of 5.1% in January.
  • The BoE raised its key interest rate, with an eye toward curbing inflation that the central bank forecast could hit 7.25% in April.
  • A preliminary estimate indicated that gross domestic product (GDP) grew 0.3% in the final three months of 2021—a slowdown from the 2.3% expansion recorded in the third quarter.
  • Portugal’s ruling Socialist party, led by Antonio Costa, unexpectedly won an absolute majority in the snap general election held Sunday.
  • Stock markets in Japan generated a positive return for the week. A rally late in the week in some stocks that would benefit from an economic reopening was sparked by a report from Japanese broadcaster TBS, which indicated that the government could present a policy as early as next week covering whether to ease the ban on the entry of non-resident foreigners into Japan.
  • On the monetary policy front, reassurances from the Bank of Japan (BoJ) that it had no plans to modify its policy boosted broader sentiment.
  • With the Japanese economy starting to pick up from the effects of the coronavirus pandemic, BoJ Deputy Governor Masazumi Wakatabe said that it is too early for the central bank to start tightening monetary policy when it has not achieved its 2% inflation target, as it could hinder the economic recovery.
  • China’s financial markets were closed during the week for the Lunar New Year.
  • More evidence of falling sales reflected continued pressure on China’s cash-strapped property sector, which has been suffering a liquidity crisis since last year.
  • The sustained sales decline and tougher funding conditions may put further strain on the property sector’s ability to service its substantial debt.
  • In the meantime, Beijing is likely using the current downturn as an opportunity to realize long-term goals, such as curbing property sector speculation, increasing housing affordability, and making China’s economy less dependent on real estate.

What to watch this week:

  • US inflation and consumer and small business sentiment data
  • China Purchasing Manager Indices, aggregate yuan financing, and money supply data
  • UK GDP and industrial production data
  • Global trade data
  • 83 S&P 500 and 42 S&P/TSX companies report earnings

Sources:,, Barron’, and

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