ClearWater Market Commentary as of January 28th, 2022

Here is the ClearWater Market Commentary as of January 28th, 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 Day0.83%
1 Month-2.27%
1 Year19.64%

As of 2022/01/28 – Source:

Index PerformancesLast 5 DaysYTD
CAC 402.62%-2.62%
WTI Crude (oil)2.50%16.00%
FTSE 1002.31%1.10%
Dow Jones Industrial1.04%-4.44%
S&P/TSX Composite0.83%-2.27%
S&P 5000.49%-7.01%
Nikkei 225-2.01%-6.10%
Hang Seng Index-3.39%1.81%
Russell 2000-3.83%-12.90%
Shanghai Composite-4.62%-7.65%

As of 2022/01/28 – Source:

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

US economy (S&P 500 0.49%):

  • Late gains helped the large-cap benchmarks move higher for the week, but not before most major indexes moved temporarily into correction territory or down more than 10% from recent highs.
  • Volatility, as measured by the Cboe Volatility Index (VIX), reached its highest level since the early months of the pandemic.
  • Energy stocks rallied as international oil prices pushed above USD 90 per barrel, driven in part by the continued massing of Russian troops along the border with Ukraine.
  • Fears that the Federal Reserve might be “behind the curve” and forced to raise short-term interest rates quickly to tame inflation weighed heavily on sentiment.
  • The Fed’s monetary policy committee met during the week and kept interest rates steady, as expected.
  • However, Fed Chair Jerome Powell left open the possibility that policymakers would raise rates in 2022 more than the three quarter-point hikes they had signalled after their December meeting, with the first increase coming in March.
  • Wall Street seemed primarily focused, however, on the Fed’s plans to reduce its balance sheet by selling its holdings of Treasuries and agency mortgage-backed securities.
  • Powell also stressed that economic conditions now are much stronger than in prior cycles, particularly given the record number of open jobs.

Canadian markets (S&P/TSX 0.83%):

  • Canada’s main stock index ended a roller-coaster week by posting its best day in nearly three weeks, helped higher by a broad-based rally led by the technology sector.
  • The stock market endured large swings all week following commentary from central banks, earnings results and economic data.
  • The March crude contract was up 21 cents US at US$86.82 per barrel and the March natural gas contract was up 35.6 cents at US$4.64 per mmBTU.
  • The Canadian dollar traded for 78.30 cents US compared with 78.67 cents US on Thursday. 
  • The Bank of Canada (BoC) kept overnight rates steady at 0.25% but strongly hinted towards hiking rates at their next meeting in March. They made no changes to the asset purchase program. The 2022 inflation forecast was raised to 4.2% (up from 3.4% three months ago).

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

European and Asian economies:

  • Shares in Europe fell for a fourth consecutive week, extending declines on rising concerns about interest rate increases and escalating tensions between Russia and the West.
  • Denmark said it would remove almost all coronavirus restrictions on February 1, except for testing travellers from abroad. Denmark follows the UK, Ireland, and the Netherlands in scrapping measures aimed at reducing the spread of the coronavirus.
  • Preliminary data for IHS Markit’s eurozone Purchasing Managers’ Index (PMI) came in at 52.4—an 11-month low but still a level that indicates an expansion in business activity. Much of this weakness stemmed from the services sector, which appeared to come under pressure from coronavirus restrictions. Manufacturing PMI, on the other hand, hit a five-month high as supply bottlenecks eased. Average prices charged for goods and services rose at the fastest rate since the survey started in 2002.
  • Germany’s, France’s, and Spain’s GDP numbers showed slowed expansion for Q4 2021, however, all three economies continued their rebound from the sharp, coronavirus-driven contractions suffered in 2020.
  • Japan’s stock markets generated a negative return for the week after the U.S. Federal Reserve signalled that it plans to steadily tighten monetary policy, with high-growth technology companies leading the declines.
  • Sentiment was also dampened by Japanese authorities’ decision to extend quasi-states of emergency to more prefectures as the country’s daily COVID-19 cases reached a record high and the omicron variant continued to spread rapidly in Tokyo and elsewhere.
  • Speaking before parliament, Bank of Japan (BoJ) Governor Haruhiko Kuroda reiterated the central bank’s commitment to ultra-loose monetary policy, which he expects to lead to an improvement in corporate profits and economic growth.
  • In the January 2022 update to its World Economic Outlook, the International Monetary Fund (IMF) revised upward its outlook for Japan’s economic growth in 2023 by 0.4 percentage points to 1.8% year over year, reflecting anticipated improvements in their economy.
  • Chinese stocks slumped ahead of a weeklong Lunar New Year holiday as Jerome Powell’s hawkish tone following the U.S. Fed’s policy meeting raised expectations for faster monetary tightening.
  • The CSI 300, which struck a 16-month low during the week, is now in a bear market, having fallen more than 20% from its February 2021 peak.
  • In property sector news, debt-laden developer China Evergrande Group said it would come up with a preliminary restructuring proposal in the next six months. Creditors, however, were disappointed by a lack of detail at a bondholders’ call.
  • Evergrande’s restructuring process was dealt a setback last week after Oaktree Capital, a Los Angeles-based alternative investments manager that issued secured loans to two major projects, seized one of the developer’s prime residential developments near Shanghai, the Financial Times reported.
  • The debt crisis in China’s property sector has drawn attention to the role of local government financing vehicles (LGFVs), a tool used by local governments to borrow money without it appearing on their balance sheets.
  • According to several reports, LGFVs have eclipsed private developers as the leading buyers of land parcels in China. The increase in off-balance-sheet debt amid the pandemic is a key concern for policymakers as they try to manage growing risks to the economy.

What to watch this week:

  • Canadian GDP data
  • Canadian, US, and China employment data
  • UK, European and Australian monetary policy announcements
  • Japan retail sales, industrial production, and consumer confidence data
  • Eurozone GDP, inflation. and retail sales data
  • OPEC+ meeting
  • 113 S&P 500 and 13 S&P/TSX companies report earnings

Sources:,, Barron’, and

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