ClearWater Market Commentary as of March 24th, 2023

Here is the ClearWater Market Commentary as of March 24th, 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 Day0.44%
1 Month-3.55%
1 Year-11.38%

As of 2023/03/24 – Source:

Index PerformancesLast 5 DaysYTD
WTI Crude (Oil)3.70%-13.80%
CAC 402.24%10.48%
Hang Seng Index2.05%1.56%
FTSE 1001.43%1.95%
S&P 5001.24%5.10%
Dow Jones Industrial1.20%-1.34%
S&P/TSX Composite0.44%0.60%
MSCI EAFE0.40%0.60%
Shanghai Composite0.16%4.16%
Russell 20000.08%-0.90%

As of 2023/03/24- Source:

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

US economy (S&P 500 1.24%):

  • Major benchmark returns varied widely as banking industry and recession worries weighed on value stocks and small-caps, while large-cap growth stocks benefited from falling interest rates. 
  • Relatedly, financials underperformed for a third consecutive week, and the small real estate sector suffered from worries about how stresses in the regional banking system would affect the commercial real estate market, where regional banks are the primary lenders.
  • The most closely watched event of the week was the conclusion of the Federal Reserve’s policy meeting on Wednesday. As was widely expected, the Fed raised official short-term rates by 25 basis points (bps), and the “dot plot” showing individual policymakers’ rate expectations—while indicating a growing disparity in outlooks—indicated that officials expected to stop raising rates after one more hike in May. References to ongoing rate increases were also removed from the official statement.
  • Fed Chair Jerome Powell’s post-meeting press conference suggested that the Fed’s change in tone was driven by forecast uncertainty rather than a strong conviction that a 5.0% to 5.25% fed funds target range would be sufficiently restrictive, making a pause after May all but certain.
  • While acknowledging that tensions in the banking system have tightened credit conditions, Powell’s prepared statement declared that it was “too soon to tell how monetary policy should respond” and warned that policymakers still “anticipate some additional policy firming may be appropriate.”
  • Powell also added that Fed officials “don’t see rate cuts this year—they just don’t.” Investors didn’t appear to take him at his word, however, and futures markets ended the week pricing in a 98.2% chance that rates would end the year lower.
  • The week’s economic data arguably suggested that the economy still had significant steam heading into the banking turmoil, at least. Weekly jobless claims remained near five-decade lows, and S&P Global’s Composite Index of both current services and manufacturing activity, released Friday, jumped from 50.1 to 53.3 (with readings of 50 and over indicating expansion), indicating the fastest pace of private sector growth since last May.
  • According to S&P Global’s chief economist, the data were “broadly consistent with annualized gross domestic product (GDP) growth approaching 2%, painting a far more positive picture of economic resilience” than seen over the past several months.

Canadian markets (S&P/TSX 0.44%):

  • Markets in Canada posted small gains Friday after recovering from losses earlier in the day, ending a second week of volatile trading over concerns about the banking sector and high interest rates.
  • Canadian CPI inflation (Feb) slowed to 5.2% (versus 5.4% expected), down from 5.9%. The average of the Bank of Canada’s two core measures slowed to 4.85% (in line with expectations), down from 5.05%.
  • This week saw the Federal Reserve raise its key rate by a quarter of a percentage point, but also shift its messaging to indicate it may end hikes soon. 
  • There have also been concerns that all the pressure on banks will cause a pullback in lending across the U.S., The Associated Press reported, which could have effects on the economy and on the labour market that would make a recession more likely. 
  • Like markets, oil prices also recovered some of their weekly losses
  • Retail sales in Canada released Friday were encouraging, he said. Statistics Canada data showed retail sales rose 1.4 per cent in January, signalling consumer strength despite high inflation and rising interest rates. 
  • The Canadian dollar traded for 72.66 cents US compared with 73.15 cents US on Thursday.
  • The May crude contract was down 70 cents at US$69.26 per barrel and the May natural gas contract was up eight cents at US$2.36 per mmBTU.
  • The April gold contract was down US$12.10 at US$1,983.80 an ounce and the May copper contract was down five cents at US$4.08 a pound.

Performance 2023: S&P 500 Sectors   

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

European and Asian economies:

  • Shares in Europe gained ground, despite weakness in bank stocks. 
  • Bank stocks in the STOXX Europe 600 Index resumed their sharp decline at the end of the week on renewed worries over the health of the financials sector. The slide reversed earlier gains on the news that UBS Group agreed to buy Credit Suisse in a deal brokered by the Swiss authorities. 
  • The Bank of England (BoE) raised interest rates to 4.25% from 4.00%, the 11th consecutive increase. Minutes from the meeting showed that the Financial Policy Committee told policymakers before the vote that the “UK banking system maintains robust capital and strong liquidity positions,” and “that the UK banking system remains resilient.” Financial markets appear to expect rates to increase again amid no signs of a letup in inflation. On a year-over-year basis, consumer prices rose to 10.4% in February.
  • The latest macroeconomic data pointed to a resilient UK economy, with a purchasing managers’ survey indicating a possible return to growth in the first quarter. S&P Global’s Composite Purchasing Managers’ Index (PMI), which measures activity in manufacturing and services, registered an expansion in business activity for a second consecutive month in March. Meanwhile, retail sales volumes rose 1.2% in February—the largest monthly gain since October.
  • Eurozone business activity expanded faster than expected in March, driven by strong growth in the services sector. A preliminary reading of S&P Global’s eurozone composite PMI rose to a 10-month high of 54.1 in March from 52 in the previous month. The result was well above the 50 mark separating expansion from contraction for the third month in a row. However, manufacturing activity fell across most countries, especially Germany, due mainly to a rise in supplier delivery times.
  • Japan’s stock markets generated mixed returns for the week. Following the latest developments in the global banking sector, investor concerns eased somewhat as six major central banks, including the Bank of Japan (BoJ), announced coordinated action on March 19 to enhance the provision of liquidity and to ease strains in global funding markets. 
  • On the economic data front, the rate of consumer inflation slowed in Japan, with the core consumer price index rising 3.1% year on year in February, down from January’s 4.2%, an over four-decade high. The contribution from energy fell notably due to government electricity subsidies to cushion the impact of price pressures. Amid calls for further stimulus, a government panel endorsed plans during the week to add more than JPY 2 trillion to existing inflation relief measures, which will go toward responding to the rise in energy prices as well as support to low-income households.
  • March saw a continued divergence in the fortunes of Japan’s services and manufacturing sectors. While Japanese service providers saw solid improvement, as government support and an uptick in Chinese tourism boosted demand, the manufacturing sector contracted, with both output and new orders falling.
  • In the Summary of Opinions from its March meeting, the BoJ acknowledged that, in view of recent price rises, there are calls to revise its accommodative monetary policy. However, it noted that it considers the risk from hasty policy change as more significant than the risk from delaying a change. It needs to carefully consider and discuss whether to revise policy, since revisions affect financial markets and a wide range of economic entities.
  • Chinese stocks rose on hopes that the country’s central bank will maintain an accommodative stance amid the global banking turmoil.
  • China’s fiscal revenues fell 1.2% in the first two months of 2023 from a year earlier, while expenditures rose by 7%. State land sales revenue, a large source of direct funds for local governments, slumped 29% amid persistent housing market weakness despite the government’s efforts to shore up the property sector.
  • China’s economic indicators have picked up in recent months as consumption and infrastructure investment rebounded from pandemic lockdowns. However, many analysts predict that policymakers will maintain an accommodative stance as banking industry turmoil strains the global growth outlook.

What to watch this week:

  • Canada’s Federal Budget
  • Canadian GDP data
  • US personal spending & income data
  • ECB President Lagarde speaks in Florence
  • UK GDP data
  • Chinese PMI data
  • Bank of Mexico monetary policy announcement
  • Japanese employment, retail sales and industrial production data

Sources:,, Barron’, and

Thank you for checking out our ClearWater Market Commentary for March 24th, 2023. If you would like to receive the ClearWater Commentary at the start of every week, sign-up for our Newsletter.