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What happened last week?
After trading holidays in Canada and the U.S. on Monday for Family Day and Presidents’ Day, respectively, equities opened the week down before moderating and reversing the decline on Thursday. The trend continued Friday, when the TSX, S&P 500 and Dow moved slightly higher, while the NASDAQ dipped ¼%.
Despite this small fall at the end of the week, the NASDAQ nearly beat its previous all-time high set in November 2021, based largely on a single-day rise of 3% on Thursday. The bump was largely driven Nvidia, the U.S. computer chip manufacturer at the forefront of artificial intelligence industry. Nvidia released an optimistic earnings forecast of a threefold increase in quarterly revenue that caused its share price to jump 11% and its market capitalization to breach $2 Trillion on Thursday and pulled the NASDAQ along with it. Global News and Nvidia
Inflation news dominated the economic releases last week in Canada. The Consumer Price Index (CPI) rose 2.9% on a year-over-year basis, down from 3.4% in December. Gasoline prices that fell 0.4% in January led the slowing rate of annual inflation. Excluding gasoline, consumer prices rose 3.2% last month. Grocery prices remain above the aggregate rate of inflation at 3.4% but have lowered from December’s 4.7% level. Mortgage interest costs were the largest driver of inflation increasing at an annual rate of 27.4%, housing rental costs grew by 7.9% on a year-over-year basis. The cost of housing, both owned and rented, have been driven by previous interest rate increases.
The Bank of Canada’s next interest rate announcements are scheduled for March 6th, April 10th, and June 5th. Although shelter costs have risen dramatically since the Bank started raising rates, overall inflation has tempered, and It is expected that Canadian policy interest rates will be raised in June. StatsCan CPI release CBC and inflation
What’s ahead for this week and beyond?
In Canada, the latest economic growth and output data will be released on Thursday morning with Gross Domestic Product reports for December and the fourth quarter of 2023.
In the U.S., building permits, new home sales, consumer confidence, and durable goods orders are scheduled. The most influential indicator, especially for the Federal Reserve’s examination of inflation and interest rate changes, will arrive on Wednesday when the Personal Consumption and Expenditures (PCE) price index is released.
Globally, Japan’s CPI, industrial output, retail sales and foreign investment, and the European Union’s industrial and services sentiment, business climate, consumer inflation expectations, consumer confidence, GDP consumer spending will be released.
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