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The week in the markets -
April 6, 2023
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Oil supply cuts overshadow market gains
Last week marked the end of the first quarter of 2023, in which Canadian equities had a positive performance of 3.69%, while the S&P 500 gained 7.03%. International equities also had a good quarter, as the MSCI EAFE Index rose 7.65% (USD). Bonds also performed well globally, with the Barclay’s Global Aggregate Bond Index returning 3.01%, and FTSE Canada All Government Bond Index gaining 3.37%. Yet a quarter that started off strong in January ended with volatility due to concerns in the banking sector.
This week, OPEC+ agreed to lower oil production by an additional 1.6 million barrels a day until the end of the year to support crude prices in anticipation of economic weakness and expanding inventories. The reduction includes Russia’s previously announced 500,000-barrel cut. While higher prices may benefit oil producers and investors in the short term, it could present challenges for the consumer by stoking inflation, which central banks have been trying to fight for months. A silver lining of tighter oil production is that increased crude prices benefit oil producers and Canadian equity investors.
U.S. job openings fell below 10 million for the first time since May 2021. This decline indicates a cooling in labour demand in some industries. The ratio of openings to unemployed people slid to 1.67, the lowest since November 2021, from around 1.9 in January, with the ratio about 1.2 pre-pandemic.
The ISM Manufacturing Purchasing Managers Index (PMI) showed declining demand in the U.S., marking the fifth consecutive month of contraction. Durable goods orders dropped for a second month in a row, with half of the orders dragged down by a reduction in defence spending. The trend of lower manufacturing and reduction in new orders is bound to have a negative effect on U.S. equity markets in the latter half of this year, with the probability of a recession increasing.
This week's market closing value - week ending April 6, 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 | 20,164.49 | 98.35 | 0.49% | 4.10% | -7.45% | 5.81% |
| S&P 500 | 4,103.20 | 7.66 | -0.01% | 6.85% | -1.54% | 10.70% |
| DJIA | 33,485.29 | 211.14 | 0.43% | 0.65% | 4.38% | 8.11% |
| FTSE 100 | 7,741.56 | 109.82 | 2.12% | 6.52% | 4.44% | 0.09% |
| CAC 40 | 7,324.75 | 2.36 | 0.54% | 14.98% | 21.49% | 5.50% |
| DAX | 15,597.89 | -30.95 | 0.31% | 13.84% | 18.81% | 3.64% |
| Nikkei | 27,472.63 | -568.85 | -1.51% | 4.46% | 1.45% | 1.75% |
| Hang Seng | 20,331.20 | -68.91 | -0.54% | 1.81% | -1.14% | -6.39% |
| CURRENCY RETURNS | CAD | Change | 1-week | YTD | 1-year | 5-year |
|---|---|---|---|---|---|---|
| USD | 1.3489 | -0.0027 | -0.20% | -0.37% | 7.53% | 1.08% |
| Euro | 1.4731 | 0.0075 | 0.51% | 1.62% | 7.79% | -1.26% |
| Yen | 0.0102 | 0.0001 | 0.52% | -0.78% | 1.00% | -3.06% |
| CANADIAN TREASURIES | Yield | Change | COMMODITIES | USD | Change |
|---|---|---|---|---|---|
| 3-month | 4.36 | 0.03 | Oil | $80.54 | $5.02 |
| 5-year | 2.91 | -0.11 | Gold | $2,006.13 | $35.94 |
| 10-year | 2.80 | -0.11 | Natural Gas | $2.02 | -$0.17 |
| 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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