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CCM Portfolio Management Weekly Update - March 24th 2023

Updated: Apr 11, 2023

The key influences that impacted the market in the last week: in the US, interest rates increased another 0.25% → the language used by the Fed in the meeting gave investors hope that there may only be one more final hike coming up, but as we’ve seen before, things can quickly change and we need to take this with a grain of salt

  • despite inflation not cooling down which should call for a bigger rate increase, the Fed stuck with 25bps as the damage of high interest rates on regional banks is starting to become apparent → the pendulum is clearly not swinging in one specific direction right now with where rates need to be

  • the shocks from last week’s SVB collapse are still being felt in financial sector stocks, although it isn’t necessarily the case, investors are concerned that other banks may be poorly managed and have internal problems that haven’t emerged yet → regulators are attempting to limit this worry by assuring uninsured deposits will be covered and that action will be taken if more stability to US banks is needed

The things we are watching closely right now for you and all of our clients: how are loans and mortgages going to fair after this week’s interest rate increase → will there be an escalation in defaults and missed payments?

  • are we going to see consumer spending and retail production subside? we’ve already seen manufacturing slow down due to higher borrowing costs

  • how is the banking sector unease going to continually impact the market? analysts are predicting that we are going to see more volatility coming up in the next few weeks

  • next Friday both consumer sentiment and personal consumption expenditure reports will be released which contain important statistics to gauge inflation

Below is a link to a Forbes article detailing the interest rate increases seen in the US since the 90s.

Please feel free to reach out to any member of the Creed Capital Management Team if you have any questions!

I have prepared this report to the best of my judgment and professional experience to give you my thoughts on various financial aspects and considerations. The opinions expressed represent solely my informed opinions and may not reflect the views of NBF.

National Bank Financial - Wealth Management (NBFWM) is a division of National Bank Financial Inc. (NBF), as well as a trademark owned by National Bank of Canada (NBC) that is used under license by NBF. NBF is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Investor Protection Fund (CIPF), and is a wholly-owned subsidiary of NBC, a public company listed on the Toronto Stock Exchange (TSX: NA).

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