The Finish Line Commentaries: Week of March 27th in Review
Author: Danny Popescu | March 28th, 2022
Happy Monday,
A year ago, it would have been difficult to predict an “all green” week with all the negative influences occurring simultaneously. The continuing invasion of Ukraine and it’s resulting economic and energy implications, surging case counts in some areas for the Omicron BA.2 variant and rising interest rates would typically take its toll on markets. Last week that was not the case:
– The strong resistance inside Ukraine has Russian leadership limiting ambitions to the far eastern parts of the country. The military losses (personnel and equipment) and lack of progress by the invaders are positive for Ukraine and its allies politically, humanitarianly, and economically.
– Optimism regarding Omicron’s BA.2 variant persists despite its high transmissibility. Vaccinations and Omicron’s prior prevalence may slow BA.2’s uptake and reduce severe illness and hospitalization rates.
– Although the threat of increased interest rates has not spiked, overall rates are still historically low despite recent rise and promises of additional increases. Fears of recession and stagflation remain low; at least for now.
Despite the headlines, the TSX is delivering healthy year-to-date and year-over-year results that outperform the American indices. Notwithstanding the losses from U.S. equities to date in 2022, their performance over the past year (including Q1 2022) has been reasonable; especially the broad-based S&P 500. The tech-heavy NASDAQ has delivered more than 10% over the past two weeks to overcome its deep losses that 2022 has produced.
What’s ahead this week:
In Canada, the survey of employment and Gross Domestic Product (GDP) for January, March’s Purchasing Managers Indexes (PMI) and earnings from Dollarama, Blackberry will be released.
In the U.S., February’s wholesale and retail inventories, construction spending, goods trade deficit, personal spending and personal income will be announced. PMIs from ISM and Markit for March along with consumer confidence, and the important non-farm payroll report are scheduled for release.
Globally, in a week with many varied data to be announced, Germany’s consumer confidence, retail sales, unemployment and consumer price index, Japan’s jobless rate, retail sales, PMIs and industrial production, China’s PMI, Eurozone jobless rate, consumer confidence and consumer inflation will be released. OPEC+ will meet and an EU/China summit is planned.
Have a good week!
Danny
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