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The Finish Line Commentaries: Week One 2022

Author: Danny Popescu  |  January 9, 2022

Happy New Year!

Markets were mostly down during the first week of trading in 2022 – the year has not started as most investors would have liked. Equity indices in North America and around the world lost ground last week based on three major influences. The Covid-19 cases, hospitalizations, and ICU admissions have spiked and are causing restrictions to be reintroduced. Central banks are indicating that the temporary nature of inflation is not as brief as first believed and short-term interest rates will need to be raised. Employment numbers in the U.S. disappointed.

The U.S. economy added 199,000 jobs in December with year-over-year wages rising 4.7% and unemployment at 3.9%. Analysts expected about 400,000 new jobs to be created last month and 3.6 million less jobs exist today than in February 2020. The Canadian economy beat jobs growth expectations during the last two months. After adding 153,000 jobs in November and 55,000 in December the rate of employment growth is exceeding the U.S. while wage-rate increases and unemployment rates lag behind the American economy’s performance. https://www150.statcan.gc.ca/n1/daily-quotidien/220107/dq220107a-eng.htm?HPA=1 https://www.bls.gov/news.release/empsit.nr0.htm

Oil prices surged nearly 5% last week after OPEC+ agreed to another round of cooperative supply adjustments. The rising price of oil will continue to contribute to rising consumer and producer inflation should this trend persist.

What’s ahead:

In Canada, in the next few days and weeks, we should see GDP figures, inflation, and the Bank of Canada’s decision on interest rates.

In the U.S., wholesale inventories, business inventories, industrial production will be announced. The Senate Banking Committee will conduct nomination hearings for the Jerome Powell’s second term as Federal Reserve Chair. Lastly, consumer inflation for December will be announced.

Globally, we should see the Eurozone jobs report, trade surplus and industrial production, China’s Consumer and Producer Price Indices, and trade surplus.

Have a great week!

Danny Popescu

CHIEF EXECUTIVE OFFICER

“I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone and may not reflect the views of Harbourfront Wealth Management. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by Harbourfront Wealth Management Inc.”

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