Aviso Weekly Market Monitor: March 13th – March 17th

Mar 20, 2023

Market developments

Equities:
On Friday the U.S. market gave back some of the weekly gains as major banks put restrictions on trading with Credit Suisse and First Republic dragging the regional banking sector index lower. First Republic got a show of support from the big U.S. banks on Thursday, but fell over -30% on Friday when sentiment shifted more negative as investors (most notably Bill Ackman) questioned if it would be enough to stop contagion. Next week the Fed decision will be in focus as the market is split on whether the Fed will continue to raise rates. Despite the concerns in the banking sector and the potentially bleaker growth outlook, investors shifted to high quality tech. The combination of investors searching for companies with fortress balance sheets and strong cashflows, paired with lower rates expectations drove the Nasdaq to its best week of the year, closing 4.4% higher.

Fixed income:
The short end of the U.S. curve was volatile this week as the U.S. 2yr whipsawed by at least 20bps and closed more than 40bps lower as traders shifted rate-hike bets, while the U.S. 10yr closed near 3.4%. As expected, the ECB did raise rates by 50bps this week and made it clear that the stress on the banking industry as well as the economic data will determine future rate decisions. Up next is the Fed decision as they battle between financial stability and high inflation. Ahead of the FOMC next week, we’ve seen expectations for peak rates come down dramatically and cuts being priced to begin this summer.

Commodities:
Oil had its worst week of 2023 this week, closing near $66 (down -13.5%) as recession fears were amplified by the collapse of the Silicon Valley Bank and the struggles at Credit Suisse. Supply was pushed higher this week as Russia’s output was higher than expected despite the sanctions. The imbalance in supply and demand paired with uncertainty in the banking sector drove oil lower and gold higher this week.

Read more…

Recent Posts

How to build an emergency fund

An emergency isn’t something anyone wants to contemplate. But the reality is that most people encounter some sort of emergency during their lifetime, and it may be one that affects them financially. And whether a crisis is job-related, health-related or something...

Aviso Weekly Market Monitor: November 20th – November 24th

Market developments Equities: Global equity market saw mixed reactions in a week marked by a 1% rise in the S&P 500. Nvidia Corp's stock faced a downturn following news of a delayed AI chip launch, highlighting the market's sensitivity to tech sector movements....

How much do you need to save for your child’s education?

The cost of post-secondary education is on the rise. In the last decade (from 2013/14 to 2023/24), the average annual tuition fees for undergraduate degree programs in Canada rose approximately 23%, from an average of $5,767 to $7,076. It may not seem like a huge leap...

NEI Monthly Market Insights: October 2023

Long term yields spook markets in October Both equity and fixed income markets continued their fall in October as bond yields rose sharply, while heightened geopolitical uncertainty also weighed on market sentiment. In fixed income markets, government bond returns...

Aviso Weekly Market Monitor: November 13th – November 18th

Market developments Equities: After a $2.7 trillion rally in November, spurred by speculation that the Federal Reserve might halt its hiking cycle, the S&P 500 is now trading above 4,500 and posted its third consecutive week of gains. The S&P 500, despite...

Aviso Weekly Market Monitor: November 6th – November 10th

Market developments Equities: Stocks rebounded as Treasury volatility eased, with the S&P 500 crossing the crucial 4,400 technical mark and finished the week up 1.3% to a seven-week high. Tech giants, including Microsoft and Nvidia, led gains, propelling the...