Media Room
The week in the markets -
April 21, 2023
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Staying the course
This week, the markets kicked off with earnings releases from the first quarter. Overall, despite persistent economic concerns and negative estimate revisions, stocks are holding up well, with some companies beating estimates and providing a positive outlook in an uncertain macro environment.
Looking at the U.S. labour market, the number of continuing unemployment claims increased, indicating a softening in the job market. This, combined with higher lending rates, resulted in less real estate activity. Housing starts in the U.S. fell in March, as multi-family projects declined, offsetting a pickup in construction of single-family homes. New builds fell by 0.8% for an annualized rate of 1.42 million homes, as multi-family projects decreased by 5.9%, and single-family homes increased by 2.7%, to a three-month high. This suggests that builders are looking at an opportunity to fill the gap since the peak in April of last year.
In Canada, March inflation data (the Consumer Price Index) came in at 4.3% on an annualized basis, which is the smallest increase since August 2021. The biggest driver continues to be mortgage interest costs, though they were offset by a decline in energy prices. Gasoline prices dropped year-over-year for the second consecutive month on a national level. This was mainly because of the steep price increase at the start of the Russian invasion of Ukraine and the uncertainty of energy supply because of the war. This March’s drop in inflation was in part due to the extreme surge in prices during the early months of 2022, which was driven by energy, durable goods and wheat-based food products.
The Canadian dollar rose from a low of $0.72 in March and has appreciated in the early part of April. The spread between a 2-year U.S. Treasury Bill and a Bank of Canada bond has narrowed, as oil and interest rates have favoured the Canadian dollar. Our Canadian dollar fair-value model is positive heading into summer, with recent OPEC+ announcements to cut production helping to prop up commodity prices. We have a positive outlook on the loonie appreciating relative to the U.S. dollar and expect it to maintain a higher value in the coming months.
This week's market closing value - week ending April 21, 2023
(As of 4:00 PM ET.*)
| EQUITY INDICES | Level | Change | 1-week | YTD | 1-year | 5-year |
| CAD | CAD | CAD | CAD | |||
| S&P/TSX | 20,668.68 | 97.94 | 0.48% | 6.70% | -4.53% | 5.95% |
| S&P 500 | 4,129.02 | -8.66 | 1.06% | 7.89% | 1.11% | 10.40% |
| DJIA | 33,809.09 | -76.22 | 1.04% | 1.97% | 4.55% | 7.95% |
| FTSE 100 | 7,914.13 | 42.22 | 2.07% | 9.31% | 6.62% | 0.26% |
| CAC 40 | 7,577.00 | 57.39 | 2.02% | 20.13% | 23.10% | 5.84% |
| DAX | 15,881.66 | 74.16 | 1.72% | 17.08% | 19.47% | 3.75% |
| Nikkei | 28,564.37 | 70.90 | 1.32% | 7.14% | 6.79% | 1.87% |
| Hang Seng | 20,075.73 | -363.08 | -0.49% | 0.92% | 4.38% | -6.90% |
| CURRENCY RETURNS | CAD | Change | 1-week | YTD | 1-year | 5-year |
|---|---|---|---|---|---|---|
| USD | 1.3536 | 0.0170 | 1.27% | -0.02% | 7.59% | 1.19% |
| Euro | 1.4879 | 0.0184 | 1.25% | 2.64% | 9.10% | -1.04% |
| Yen | 0.0101 | 0.0001 | 1.07% | -2.12% | 3.01% | -3.17% |
| CANADIAN TREASURIES | Yield | Change | COMMODITIES | USD | Change |
|---|---|---|---|---|---|
| 3-month | 4.40 | 0.02 | Oil | $77.77 | -$4.81 |
| 5-year | 3.10 | -0.11 | Gold | $1,982.16 | -$23.27 |
| 10-year | 2.94 | -0.10 | Natural Gas | $2.21 | $0.09 |
| CANADIAN PRIME RATE |
|---|
| 6.70% |
*The data contained in the charts above is provided by Bloomberg as of 4:00 PM ET. Please note that the final closing market values may vary due to data delays and market settlement.
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