ClearWater Market Commentary as of September 15, 2023

Here is the ClearWater Market Commentary as of September 15th, 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 Day2.31%
1 Month-4.06%
1 Year6.38%

As of 2023/09/15- Source:

Index PerformancesLast 5 DaysYTD
WTI Crude (Oil)4.10%13.50%
S&P/TSX Composite2.31%6.04%
FTSE 1001.63%5.90%
MSCI EAFE1.20%8.00%
CAC 400.65%13.38%
Shanghai Composite-0.46%0.30%
Dow Jones Industrial-0.75%4.34%
Hang Seng Index-0.81%-8.43%
Russell 2000-0.86%5.50%
S&P 500-0.97%16.14%

As of 2023/09/15- Source:

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

US economy (S&P 500 -0.97%):

  • The major equity indexes finished mixed, with value stocks leading the market as U.S. benchmark West Texas Intermediate oil prices rose above $90 per barrel for the first time since November 2022. Large-cap shares outperformed small-caps.
  • Technology and growth stocks lagged after Apple’s new product introduction event on Tuesday that featured a price increase on its top-of-the-line iPhone 15. The products received mixed reviews, which also seemed to dampen sentiment toward the technology sector over the course of the week. However, broad market sentiment received a boost from the largest initial public offering of 2023 as shares of a UK microchip designer started trading on the Nasdaq on Thursday and experienced a first-day price jump.
  • Wednesday’s release of the eagerly anticipated August consumer price index (CPI) data showed that the Federal Reserve has made progress in its fight against inflation, but rising energy prices may prompt the central bank to further tighten monetary policy. The headline CPI numbers showed the largest monthly increase since August 2022, which was the widely expected effect of higher gasoline prices. The core (excluding food and energy) CPI increase was slightly higher than expected, but markets took the news in stride.
  • Similarly, the August producer price index (PPI) data released on Thursday indicated that headline producer prices climbed more than expected, with core PPI in line with expectations. Retail sales for August were strong, demonstrating that consumers remain willing to spend.
  • The week’s economic data overall didn’t seem to affect the market’s outlook for the Fed to hold rates steady at its September 19–20 policy meeting. Much of the data appeared to reinforce building expectations for a soft-landing scenario in which inflation cools to the Fed’s target without a deep recession. In fact, Wall Street’s widely followed “fear gauge,” the Chicago Board Options Exchange Volatility Index, or VIX, hit its lowest point since before the onset of the pandemic in early 2020.

Canadian markets (S&P/TSX 2.31%):

  • Global equities climbed higher last week, with the S&P/TSX leading the charge, up 2.7%. The rally in oil prices has allowed Canadian equities to catch a bid, as financials, materials and industrials joined the rally seen in the TSX energy sector, which is up >15% since June. Oil prices climbed to new year-to-date peaks, spurred by OPEC warnings of a potential supply crunch.
  • This week saw a number of economic reports showing that consumers continue to be resilient in the face of higher interest rates, as does the labour market.
  • The Canada National Balance Sheet (Q2) reported household debt-to-disposable incomes falling to 180.5% in seasonally adjusted terms. Net worth as a percentage of disposable income climbed to 1,003%. The household debt service ratio ticked down to 14.8%, while gross government debt to GDP edged up to 125.2%.
  • Canadian existing home sales (Aug.) fell -4.1% m/m seasonally adjusted (versus -0.2% expected), but are still up 5.3% y/y.
  • The Canadian dollar surged throughout the week on the back of this strength in energy; a potential sign of the possible resumption of the currently broken relationship between USD/CAD and oil. These days, high crude prices and a strong U.S. dollar are a very profitable combo for Canadian oil players.
  • The Canadian dollar traded for 73.93 cents US compared with 73.99 cents US on Thursday.
  • The November crude contract was up 41 cents at US$90.02 per barrel, and the October natural gas contract was down six cents at US$2.64 per mmBTU.
  • The December gold contract was up US$13.40 at $1,946.20 an ounce and the December copper contract was down two cents at US$3.80 a pound.

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

Performance 2023: S&P 500

European and Asian economies:

  • Most European indices were positive for the week as the European Central Bank (ECB) raised interest rates but signaled that borrowing costs may have reached a peak. Better economic data out of China also appeared to lift investor sentiment. 
  • The ECB raised interest rates for the 10th consecutive time and hinted that it could be nearing the end of its monetary tightening campaign. ECB President Christine Lagarde said a “solid majority” of policymakers had backed the quarter-point hike that took the key deposit rate to 4.0%, a record high. The ECB said that the move meant “interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target.”
  • Data from the European Union’s statistics office indicated that industrial production in the eurozone weakened by more than expected in July, dropping 1.1% sequentially because of sharp declines in the output of durable consumer and capital goods.
  • The European Commission (EC) cut its forecast for gross domestic product growth in the eurozone in 2023 to 0.8% from 1.1% and projected that the German economy, the largest in the area, would shrink by 0.4%. The EC’s previous estimate had called for Germany’s GDP to expand by 0.2%.
  • The UK economy shrank faster than expected in July due to worker strikes, wet weather, and rising borrowing costs, the Office for National Statistics said. GDP fell 0.5% sequentially, after rising by the same amount in June. However, the rolling three-month growth rate increased 0.2%, thanks to expansions in services, production, and construction.
  • UK unemployment unexpectedly increased to 4.3% in the three months through July, up from 4.2% over the previous three months. This jobless rate exceeded the 4.1% that the Bank of England had forecast for the third quarter. But total wage growth over the three months through July accelerated year over year to a greater-than-expected 8.5%.
  • Japan’s stock markets gained over the week due to positive Chinese economic data, amid tentative investor anticipation that the country’s stimulus efforts are having the intended effect on growth and markets, supported sentiment. Strength in U.S. stocks and yen weakness, benefiting Japan’s exporters, added to the favorable investment backdrop.
  • Bank of Japan (BoJ) Governor Kazuo Ueda suggested that the central bank could have enough data by year-end to judge if wages will continue to rise and thereby determine whether it could end its policy of negative interest rates (given sustained wage growth is key to the achievement of its 2% inflation target). The comments were perceived as hawkish, even though Ueda was careful to emphasize that policy normalization is still a ways off. Ueda’s remarks were also regarded by some investors as a verbal intervention in response to historic weakness in the yen.
  • Prime Minister Fumio Kishida reshuffled his cabinet, as had been widely anticipated, but kept intact his core economic policy team, which is tasked with introducing new stimulus measures in October. After the reshuffle, Kishida said he would continue gasoline subsidies, given households are facing an environment in which price gains erode their purchasing power, especially as wage growth is not yet keeping pace. He asserted that his new cabinet would take steps to ensure that wage growth consistently exceeds the rate of inflation by several percentage points and that Japan is fully out of deflation.
  • Chinese equities were mixed after official indicators revealed that the country’s economy may have bottomed, although data also pointed to ongoing weakness in the property market. 
  • Official data for August provided evidence of economic stabilization in the country. Industrial production and retail sales grew more than forecast last month from a year earlier, while unemployment unexpectedly fell from July. However, fixed asset investment growth missed forecasts due to a steeper decline in real estate investment. New bank loans rose an above-consensus RMB 1.36 trillion in August, up from July’s RMB 345.9 billion. Credit expansion was mostly driven by corporate demand, while household and longer-term loans also grew.
  • Inflation data revealed that consumer prices returned to growth after slipping into contraction in July. The consumer price index rose 0.1% in August from a year earlier, up from July’s 0.3% decline. Meanwhile, the producer price index fell 3% from a year ago as expected but eased from the 4.4% drop the previous month. The inflation readings provided more evidence that the worst may be over for China’s slowing economy, which led Beijing to issue a flurry of stimulus measures in recent weeks aimed at jumpstarting demand.
  • In monetary policy news, the People’s Bank of China (PBOC) cut its reserve ratio requirement by 25 basis points for most banks for the second time this year to inject more liquidity into the financial system. The central bank also rolled out RMB 591 billion into the banking system compared with RMB 400 billion in maturing loans. Many economists predict that the PBOC will engage in further policy easing for the rest of 2023 as the government tries to boost China’s post-pandemic economy, which has been losing momentum following a brief first-quarter rebound.

What to watch this week:

  • Canadian National Balance Sheet and Financial Flow Accounts (Q2)
  • Canadian housing data
  • US inflation, retail sales, and industrial production data
  • ECB policy announcement
  • Chinese industrial production, fixed asset investment, money supply and aggregate yuan financing data
  • UK GDP, employment, trade and industrial production data
  • Federal Reserve Policy Rate Announcement

Sources:,, Barron’, and

Thank you for checking out our ClearWater Market Commentary for September 15th, 2023. If you would like to receive the ClearWater Commentary at the start of every week, sign-up for our Newsletter.

Scroll to top