IAIC Market Update - January 31, 2022
Last Week in the Markets: January 24th - 28th, 2022
(source: Bloomberg https://www.bloomberg.com/markets, MSCI https://www.msci.com/end-of-day-data-search and ARG Inc. analysis)
What happened last week?
- The Federal Reserve and the Bank of Canada announced monetary policy updates last Wednesday, holding their benchmark rates unchanged; both are now poised to increase interest rates in March.
- Intra and inter-day volatility rose as the comments made by Fed Chair, Jerome Powell, were released. He indicated that rates could be increased without harming employment. It appears that the Fed may increase rates rapidly before slowing the number of increases as 2022 proceeds. All of the maneuvering by the Fed is to control inflation which is well above the 2% goal, sitting at 7% as of December. The Fed also plans to end its bond-buying program in March and to reduce its holdings that support long-term interest rate reduction. (Source)
- The Bank of Canada had already ended its bond-buying support last autumn. Interest rates were left unchanged due to uncertainty of the negative effects of Omicron and inflation at approximately half the U.S. rate.
- As speculation about interest rates increases, expect volatility to build, as the political situation in Ukraine contributes to uncertainty as well. The VIX volatility index reached its highest level since early 2021 as analysts digested central bank guidance for their stand-pat policies and tensions between NATO and Russia rose. (Source)
What’s ahead for this week?
- In Canada, January’s employment data, December’s Industrial Price and Raw Materials Indices, building permits and November’s GDP will be released along with Markit’s Purchasing Managers Indices (PMI).
- In the U.S., PMIs from Markit and ISM for manufacturing and composite and December’s construction spending and factory orders are scheduled for release. Non-farm payroll employment numbers will be announced by the Bureau of Labor Statistics.
- Globally, China’s markets will be closed after Monday. Japan’s employment retail sales, services PMI, industrial production and consumer confidence, Eurozone retail GDP and retail sales, inflation and joblessness, service and composite PMIs will be released.
For more information contact:
Independent Accountants’ Investment Counsel Inc.
135 Main St. E. Listowel, ON
Phone: 519-291-2817 or TF: 1-877-291-3040
icpmss@iaic.ca
This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc. All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics. No guarantee of outcome is implied and opinions may change without notice. Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein. Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.
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