At the close of business last Friday, global equities were largely flat on the week, but they also suffered a quarterly decline for the first time in two years. The price of a barrel of West Texas Intermediate crude oil dropped to $100.62 from $113.47 last Friday as US president Joe Biden announced the release of strategic petroleum reserves. The yield on the US 10-year note fell to 2.40% from 2.48%, and volatility, as measured by the Cboe Volatility Index (VIX), declined to 20.1 from 22.3 a week ago.

 

MACRO NEWS

US Treasury yields invert 
One thing we watch closely is the Yield curve in the US. On Thursday, the spread between the US 2-year Treasury and the 10-year rate inverted for the first time since 2019. This part of the yield curve is the one most closely watched because it could signal a recession on the horizon should it invert. On Monday, 5-year and 30-year Treasury yields inverted for the first time since 2006. The yield on the 5-year Treasury note rose to 2.64% while the 30-year yield was 2.60%. Five-year and 30-year treasury yields inverted again on Friday morning, with the 5-year surging to 2.522% and 30-year at 2.519%. With all the data we are collecting, we do not believe we are headed into a recession in 2022.

Peace talks begin
Russia claimed it would reduce its attacks on Ukraine as delegates from the two countries met in Istanbul. Russia appears to be cutting back its military activity near Ukraine’s capital of Kyiv and the northern city of Chernihiv. Russian troops that took over the Chernobyl Nuclear Power Plant last month have transferred control back to Ukraine.

CANADIAN ECONOMIC NEWS

Finance Minister Chrystia Freeland will bring down her budget on Thursday. We now have the largest federal debt in the history of our country. This is money that taxpayers and corporations must repay. Watch for the following potential announcements:

• Personal and corporate tax rate increases
• Changes to TFSA”s (Tax-Free Savings Accounts)
• Boutique tax credits for first-time homebuyers
• The introduction of a First Home Savings account
• A new anti-flipping tax on the sale of investment properties
• A change in the Capital Gains exemption from 50% down to 25%
• A change in how private corporations distribute income
• A change in charitable contribution rules

We will have an update on the new federal budget in next week’s blog.

US ECONOMIC NEWS

Market sees first down quarter in two years
For the first quarter, the Dow Jones Industrial Average and S&P 500 Index closed down 4.8% and 5.2%, respectively, while the Nasdaq Composite Index lost 10%. This was the first negative quarter for all three averages since the first quarter of 2020, which marked the start of the COVID pandemic in the US. March was a bright spot, however, as the major averages enjoyed a solid two-week rally to end the month. The S&P 500 and Nasdaq rose more than 3% in March, while the Dow added 2.2%.

EUROPEAN ECONOMIC NEWS

The cost of living hit another record high in the euro zone last month. Headline inflation came in at 7.5% for March on an annual basis, up from 5.9% in February, according to preliminary data from Europe’s statistics office, Eurostat.

JAPAN, CHINA and EMERGING MARKETS ECONOMIC NEWS

Manufacturing, one of the main drivers of China’s growth since the pandemic began, saw slower growth in the first quarter. Retail businesses saw double-digit year-on-year declines in the rate of revenue and profit growth and a slowdown in hiring.

China’s biggest city, Shanghai, began a two-stage lockdown this past Monday as authorities attempted different strategies to maintain growth while trying to control the country’s worst COVID-19 outbreak since the pandemic began.

BRAND NEWS

We’re tickled pink! When we were going through our rebranding exercise last year, we had an expert conduct a few client interviews. One of our clients said about us, that we are “the total package.”

That sentiment was, thankfully, supported by other clients interviewed. So, besides making us feel truly honoured, it got us thinking: we have always taken a holistic, comprehensive approach to financial planning for our clients—a “total” approach, if you will. We really think it makes us different. Then we thought, maybe we should give our process a name?

And that is how Total Package Planning™ was born. Three simple words, one powerful difference we make for our clients.

What exactly is that difference? Click here for an overview.