After the worst calendar year in the markets since the 2008 Financial Crisis, January gave everyone some optimistic signs. Here's what you need to know:
Article provided by iA Clarington.
Inflation
Inflation in Canada edged down to 6.3% year-over-year in December, largely due to slower growth in gasoline prices
Canadian economy added 104,000 jobs in December, as the nation’s unemployment rate dropped to 5.0%
The Bank of Canada raised its benchmark interest rate by 25 basis points and signaled that this could be the peak for the current tightening cycle.
U.S. nonfarm payrolls increased by 223,000 in December, as the unemployment rate improved to 3.5%
The consumer price index increased 6.5% year-over-year in December
The slowing inflation rate was due in large part to a 9% decline in gasoline prices from a month ago
U.S. equities posted strong gains in January
This came with the Fed potentially being able to pull off a soft-landing scenario as opposed to a deep recession
International Monetary Fund inched up its outlook for global growth this year, reflecting greater-than-expected resilience in economies across the world
Performance
Canada's benchmark S&P/TSX Index was up 7.1% in January, all benchmarks underlying sectors were in the green
Gain was lead by info tech. and health care sectors (up 19.5% and 14.4%)
Small-cap stocks as measured by S&P/TSX SmallCap Index gained 8.8% for the month
U.S. based stocks rose 4.5% (S&P 500)
Top performing sectors for the month were consumer disc. and communication services (13.2% and 12.5% up)
Utilities, health care, and consumer staples were the only sectors in the red during the month, falling 3.5%, 3.5% and 2.6%,
International stocks, as measured by the FTSE Developed ex US Index, advanced 6.5% during the month, while emerging markets rose 5.6%.
Fixed Income
The investment grade fixed income indices we follow were up in January.
Canadian investment grade bonds, as measured by the FTSE Canada Universe Bond Index, increased by 3.1% during the month
The key global investment grade bond benchmark rose 3.3%
Global high-yield issues added 4%
Currency
U.S. dollar depreciated 1.8% vs. the Loonie in January
Commodities
Price of natural gas plummeted 40% during the month, while crude oil was off 1.7%
Copper and gold had a positive month, with respective gains of 10.9% and 5.7%
Silver fell 0.8%
FUND FACT!
Egg prices are absolutely soaring, while chicken meat prices have been well-grounded
The average price of whole fresh chickens rose 13% between January and December 2022, while the average price of a dozen eggs was up 120% over the same period. A big driver of the price spike was that repeated outbreaks of avian influenza ravaged farm flocks of egg-laying hens in 2022, drastically reducing the supply of eggs
This document was prepared by the Investment Products & Platforms Team. The opinions expressed in this document do not necessarily reflect the opinions of iA Private Wealth Inc. Although the information contained in this document comes from sources, we believe to be reliable, we cannot guarantee its accuracy or completeness. The opinions expressed herein are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Nothing contained herein constitutes an offer or solicitation to buy or sell any of the securities mentioned. Specific securities discussed are for illustrative purposes only. The information contained herein does not apply to all types of investors. The information provided herein does not constitute financial, tax or legal advice. Always consult with a qualified advisor prior to making any investment decisions.
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