An interesting report addressing some of the recent market volatility from Sun Life Global Investments in their Q4 2021 Market Update. The update also includes additional market data and recently released commentary from the US Federal Reserve and the Bank of Canada and what these updates signal in the coming months.
Due to January market volatility and key rate announcements, we have updated our Q4 commentary with additional market data through Jan. 26.
Highlights from the past quarter:
- After hitting record highs in Q4, markets declined in the new year: S&P 500 down 7.2%, NASDAQ down 11.4% and S&P/TSX Composite down 1.9% for the month to January 26.
- On Jan. 26, the U.S. Federal Reserve did not increase its benchmark rate but signalled it would “soon” be appropriate to raise rates. The Fed moved to end its QE program in March and signalled it was ready to reduce its balance sheet once rates begin to rise.
- On Jan. 26, the Bank of Canada kept its key target interest rate steady at 0.25%. The BOC governor Tiff Macklem stated that Canadians should expect a rising path for interest rates in order to control inflation.
- As of Jan. 26 benchmark oil prices moved higher to US$87.52-a-barrel, with uncertainty over the Russia/Ukraine border dispute.
- In Q4 into January, the Omicron variant continued to spread, slowing global economic growth, and clouding the earnings outlook.