April 2023 in Review
Hi all! Let's talk about what happened in the global equity markets last month. It was a ride with more ups and downs than a seesaw. Investors were all worked up about the potential interest rate hikes by the U.S. Federal Reserve Board and other central banks, which showed in the market sentiment. But hey, the good news is that things eventually ended on a high note!
First Republic Bank announced a 42% drop in deposits in the first quarter and sent regulators into a tizzy. JPMorgan Chase & Co saved the day by acquiring the bank. Crisis averted!
Moving on, there were no major meetings by the Fed, Bank of England, or European Central Bank in April. But the Bank of Canada, Bank of Japan, and People’s Bank of China kept things steady by holding their key interest rates.
Inflation subsided in March but remained elevated, which is a fancy way of saying that things aren't as bad as they used to be, but still not great. Global labour markets were strong and kept consumer strength afloat. And we got some mixed results from the manufacturing and service sectors.
The S&P/TSX Composite Index and the S&P 500 Index posted gains, with all sectors delivering positive returns. The price of oil and gold ticked higher over the month, which is great news if you're in the mining or oil business, but not so great when you’re filling up at the pumps.
Okay, now let's talk about something serious. The world's largest economies announced their first-quarter GDP growth rates, and things are expanding slowly. The U.S. economy grew at an annualized pace of 1.1%, which is more of a jog than a sprint. But hey, our U.S. consumer friends to the south drove most of the consumer growth, so let's give them a high five for engaging in a little spending therapy. And China's economy got a boost from easing lockdown restrictions, so let's raise a glass of Baijiu to them as well! (Don't ask me what Baijiu is, but apparently, it's the national drink and something they've been making for the past 5000yrs).
Inflation pressures in Canada and the U.S. are easing but still, well above the targets the Bank of Canada and the US Federal Reserve set. Canadians feel the squeeze, with retail sales dropping and households cutting back on spending. And Americans are having difficulty getting credit this year compared to last year. As always, keeping your head regarding financial decisions during volatility almost always wins the day.
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