ClearWater Market Commentary as of March 4th, 2022

Here is the ClearWater Market Commentary as of March 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 Day	1.40%
1 Month	0.61%
YTD	0.85%
1 Year	16.44%

^{As of 2022/03/04 – Source: www.marketwatch.com}

Index Performances	Last 5 Days	YTD
WTI Crude (oil)	25.30%	52.50%
S&P/TSX Composite	1.40%	0.85%
Shanghai Composite	-0.11%	-5.28%
S&P 500	-1.27%	-9.18%
Dow Jones Industrial	-1.30%	-7.49%
Nikkei 225	-1.85%	-9.75%
Russell 2000	-2.39%	-11.27%
Nasdaq	-2.78%	-14.90%
Hang Seng Index	-3.79%	-6.38%
FTSE 100	-6.71%	-5.38%
DAX	-10.11%	-17.57%
CAC 40	-10.23%	-15.26%

^{As of 2022/03/04 – Source: www.marketwatch.com}

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

US economy (S&P 500 -1.27%):

• Stocks ended lower over a volatile week, as investors continued to weigh developments in the crisis in Ukraine. The S&P 500 Index was dragged lower by the heavily-weighted technology, financials, consumer discretionary, and communication services sectors, but all other segments moved higher.
• The energy sector performed best, as international oil prices traded as high as nearly USD 120 per barrel on Thursday before news of a possible Iran nuclear deal caused them to retreat a bit.
• The European Union, the UK, and the U.S. agreed to exclude several Russian lenders from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) international banking network.
• Western powers announced further sanctions against Russia. On Wednesday, MSCI announced that it would remove Russian securities from its indices, and U.S. authorities weighed restrictions on Russian imports. On Thursday, President Joe Biden announced new penalties targeting Russian oligarchs with close ties to Russian President Vladimir Putin.
• Following Putin’s order to raise nuclear forces to a higher state of alert, Belarus adjusted its laws to be able to warehouse nuclear weapons. Putin and other officials continued to make veiled threats over the week, leading to panic buying of iodine in parts of Central Europe. (Iodine could reduce the risk of developing thyroid cancer due to radiation exposure.)
• The ruble plunged into international currency markets despite the Russian Central Bank’s move to raise the policy rate from 9.5% to 20%.
• Following talks between Ukraine and Russia over the previous weekend, Ukraine announced on Wednesday that it would take part in the second round of talks with Moscow. After the talks on Thursday, a Ukrainian negotiator said that the second round had not produced the hoped-for results, although he added that the two sides agreed to speak again.
• Powell also said that he was inclined to stick with a quarter-point increase in the federal funds rate in March, dispelling fears of a 50-basis-point (0.50%) increase.
• The week’s economic data offered conflicting signals on how aggressively the Fed would have to act to tame inflation.

Canadian markets (S&P/TSX 1.40%):

• Canada’s main stock index rose for a second-straight week as commodity prices continued to march higher with oil surpassing US$115 per barrel Friday over worries about the war in Ukraine.
• Commodities propelled the S&P/TSX composite index into positive territory, closing up 152.02 points to 21,402.43.
• Crude oil, gold, copper, nickel, steel, aluminum and agriculture prices have all surged on worries that sanctions will hurt supplies from Russia, while exports from Ukraine will also be constrained.
• Energy led the TSX, climbing 3.5 percent as crude oil prices surged 7.4 percent Friday to end the week up 25 percent and 52 percent higher year-to-date.
• The Canadian dollar lost some ground despite higher crude prices as the U.S. dollar strengthened, trading for 78.43 cents US compared with 78.96 cents US on Thursday.

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

European and Asian economies:

• Shares in Europe fell sharply, as investors weighed the possible implications of Russia’s ongoing invasion of Ukraine.
• The European Union (EU) and the UK joined the U.S. in imposing sanctions on Russia for invading Ukraine, headlined by measures seeking to curtail Russian access to their capital markets and financial system.
• A growing number of large European companies from a wide swath of industries—including automakers, aviation, energy, finance, industry, entertainment, logistics, technology, and professional services—said they would limit, freeze, or exit business activities with Russia.
• Meanwhile, the UK Treasury moved to deny Russian aviation and space industry companies access to British-based insurance or reinsurance services. The London Stock Exchange also suspended trading in 28 Russian companies and excluded all Russian businesses from stock market indexes.
• Inflation in the eurozone in February accelerated to a record 5.8%, up from 5.1% in January, as costs of energy and food surged, according to preliminary data from Eurostat.
• Japan’s stock markets registered losses for the week.
• Expectations of aggressive monetary policy tightening by the Fed also weighed on sentiment.
• The government imposed more sanctions on Russia, coordinating its actions with other Western nations.
• Prime Minister Fumio Kishida announced a range of measures to cushion the impact of sharp increases on petroleum product prices, including an increase in the government subsidy for oil wholesalers, subsidies to taxi operators, and enhanced support measures for other affected industries such as agriculture and fishery.
• In coronavirus-related developments, the government announced that it had reached its target of administering 1 million COVID-19 booster shots per day in mid-February. It also extended the quasi-states of emergency in place in several prefectures, including Tokyo, as well as confirming a further easing of border controls—among the strictest in the developed world—from March 14.
• Chinese markets retreated as the war in Ukraine and disappointing economic data dampened risk appetite.
• Escalating sanctions against Russia and caution ahead of a weeklong annual meeting of China’s parliament starting Saturday restrained investor sentiment. China will reportedly announce an official 2022 gross domestic product (GDP) target of 5.0% to 5.5%, the first time since 1991 that the country’s economic growth target will be below 6%.
• The People’s Bank of China may cut interest rates in the near term to battle the economic slowdown.
• China will not join Western countries in implementing sanctions against Russia, according to the chairman of the China Banking and Insurance Regulatory Commission. Total trade between the two countries climbed roughly 36% in 2021 to a record USD 146.9 billion, according to Chinese customs data, which revealed that Russia ran a trade surplus with China and was a key source of oil, gas, coal, and agriculture commodities.

What to watch this week:

• U.S. Wholesale Inventories (January)
• China Consumer Price Index (February)
• China Producer Price Index (February)
• Japan Leading Economic Index (January)
• U.S. Consumer Price Index (February)
• ECB Interest Rate Decision
• University of Michigan Consumer Sentiment Index, preliminary (March)
• China Vehicle Sales (February)

• 

Sources: Bloomberg.com,Yardeni.com, Barron’s.com, Factset.com and Newyorkfed.org

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