![]() ![]() ![]() The April crude contract was up US$1.37 at US$77.05 per barrel and the April natural gas contract was up one-and-a-half cents at US$2.75 per mmBTU. "The bond market is going to offer investors some balance against their equity portfolios, and that’s something that should really be embraced.” “I think there’s opportunity here for a balanced investor to really take a look at the bond market, because it has priced in a lot of the damage already in 2022," he said. While last year was one of the worst-ever years for fixed-income investors, Locke said, smart investors should be looking to the bond market now. In fact, the heightened expectations for rates have sent yields jumping in the bond market this month. The report shows a much grimmer economy than forecasters were expecting as higher interest rates took a more noticeable toll on the economy.īut that data did little to shake investors' belief that more rate hikes are coming, Locke said. In this country on Tuesday, Statistics Canada said real gross domestic product was unchanged in the fourth quarter of 2022 after five consecutive quarters of growth. The Fed’s rate is currently set in a range of 4.5 per cent to 4.75 per cent after starting last year at virtually zero. Many now see the Fed hiking its key overnight interest rate up to at least 5.25 per cent, if not higher, and keeping it there through the end of the year. It also increases the likelihood of more interest rate hikes, which could in turn tilt the economy into a full-blown recession - taking a bite out of corporate profits and dragging down the equities market. Federal Reserve - are not getting control of inflation as quickly as they would like. But in spite of predictions by economists that an economic downturn is likely this year, reports on everything from the job market to consumer spending to inflation itself have come in firmer than expected over the last few weeks.Īll of that hotter-than-expected economic data has been bad news for stock markets, as it signals that central bankers - in particular, the influential U.S. Investors have been worrying for months about the possibility of recession in the wake of a series of rapid interest rate hikes by central banks last year. Federal Reserve) over their next few meetings.” "With some of the data that’s come through the end of January, early February being a little stronger than expected, we’re seeing now the market has repriced for at least three more hikes (from the U.S. “There’s definitely a lot of volatility that we’ve seen, and it's come from the resetting of expectations," Locke said. The optimism early in the year that central banks were poised to signal an end to ongoing interest rate hikes has almost entirely dissipated, he said. The month of March, too, appears poised to come in like a lion, with the possibility of more volatility on its way, said Steve Locke with Mackenzie Investments. While 2023 started out strong, North American equities have been in retreat for the last several weeks, with last week in particular taking investors on a rough ride. Markets settled in the red after a day of choppy, up-and-down trading to close out the month of February. The Canadian dollar also fell, trading for 73.48 cents US compared with 73.68 cents US on Monday. The S&P 500 index was down 12.09 points at 3,970.15, while the Nasdaq composite was down 11.44 points at 11,455.54. In New York, the Dow Jones industrial average was down 232.39 points at 32,656.70. The S&P/TSX composite index closed down 38.94 points at 20,221.19. North American stock markets edged down Tuesday to close what has been a rough February for investors. ![]()
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