March was a solid month for the markets. As we have grown accustomed to, inflation and interest rates dominated much of the conversation. The last month also saw oil continue its rebound.
March Market Performance:
- S&P500: 3.1%
- NASDAQ: 2.1%
- DOW: 1.6%
- TSX: 3.6%
On March 19th, the posted February inflation reading in Canada was 2.8%, which was surprisingly less than the anticipated 3.1%. On the flip side, the US reading posted on March 12th was 3.2%, which was above the anticipated 3.1%. For interest rates, Canada left the benchmark rate unchanged at 5%, and the US Federal Reserve also left their benchmark rate unchanged at 5.5%. With the US inflation readings coming in higher than expected and their economy remaining relatively strong, there are rumblings that the Fed may keep rates higher. These rumblings can cause short term market fluctuations, but this isn’t overly surprising; getting inflation down to target is like a marathon where the last mile can be the hardest.
Oil has been experiencing a notable rebound over recent months due to increased global concerns over supplies and potential geopolitical risks such as the war in Ukraine and fear that the war in Haza will escalate and expand further in the Middle East. Year-to-date, WTI Oil is up 19% and Brent Crude is up 16.1%. Over March WTI is up 6.5% and Brent was up 4.6%.
With the S&P/TSX Composite Index (Canada’s primary index) having 1/3 in the Energy and Materials sectors, the recent boost to oil prices and energy acted as a tailwind for the month of March. The TSX was up 3.6% compared to the S&P500 up 3.1% and the NASDAQ up 2.1%
