Reflections & Resources

Last Month In the Markets – Markets Catch Their Breath

February 28, 2023

Last Month in the Markets – February 1st -28th, 2023

What happened in February?

With the exception of a few peaks, last month delivered mostly negative results for investors concentrated in equities. Canada’s TSX and the U.S. S&P 500 fell by almost the exact percentages of 2.63% and 2.61%, respectively, in February. The Dow dropped an additional point-and-a-half finishing the month 4.19% below January’s close. In a relatively benign result, the NASDAQ leaked a little more than 1% of its overall value. The All-Country World Index (ACWI), which is comprised of 23 Developed Markets and 24 Emerging Markets and 2,882 constituents, lost 3% of its value last month. The Canadian dollar continued its slide against the American counterpart, and the commodities, gold, and oil, followed downward. Bond yields, represented by the Bank of Canada 10-year note, rose again.

Each time equity values made significant gains, those higher levels created a peak when negative news caused indexes to retreat immediately afterward:

The Federal Reserve raised its benchmark “federal funds” rate by 25 basis points to a range of 4½ to 4¾ percent. The optimism for slowing interest rate increases was short-lived when the announcement did not support a gentle path for rates. The U.S. Non-farm Payroll Report showed that employment rose 517,000 in January with widespread gains and the unemployment rate was unchanged at 3.4%, and steady since early last year. The strong jobs market suggests that interest rates have not sufficiently slowed the economy and further action from the Federal Reserve is required.
The jobs market weighed-down markets again when Fed Chair, Jerome Powell, stated, “The reality is if we continue to get strong labor market reports or higher inflation reports, it might be the case that we have to raise rates more”. Regarding the reduction of inflation with recession, he said, “There’s been an expectation that it’ll go away quickly and painlessly. I don’t think that is at all guaranteed.” These statements reiterated existing policy, but their stark frankness confirmed the Fed’s prioritization of inflation reduction over recession avoidance.
Consumer inflation reversed its recent path by increasing in January more than it had in December, and year-over-year prices increased 6.4% according to the Bureau of Labor Statistics press release. a. On February 16th, Bank of Canada Deputy Governor, Paul Beaudry, reconfirmed the importance and commitment to the 2% inflation target. Despite the pain inflicted by higher interest rates, stable and predictable prices facilitate better spending and investing decisions.

The remainder of February was negatively influenced by Canadian inflation running at 5.9%, and increasing Gross Domestic Product for the U.S. fourth quarter. Both situations support more hawkish monetary policy.

What’s ahead for March and beyond in 2023?

The key influence on markets will continue to be the performance of the world’s largest economy, the United States, and its effect on American and global monetary policy. The European Union and the European Central Bank (ECB) will also exert some influence, too.

The ECB and the U.S. Federal Reserve will announce their latest monetary policy statements, which include interest rate decisions, on March 16th and 22nd, respectively. The Bank of Canada will precede both of those organizations with an announcement on March 8th.

Watching the results of monetary policy announcements, rate forecasts prior to announcements, and missed expectations, will provide insight into market moves.

Currently, the guidance from the ECB and Federal Reserve continues to indicate rate rises for the next round and beyond, if necessary. The Bank of Canada’s pause in rate hikes is in jeopardy based on recent commentary. Inflation continues to run far above its target, and the interest rate increases to-date may have tempered inflation’s climb but have not brought price increases back into the target range of 2%.

Barring any unexpected economic shocks, like an escalation by Russia, monetary policy driven by inflation will continue its control of markets.

BoC monetary policy Fed monetary policy ECB monetary policy

Wagner Investment Management Team contributors: Susyn Wagner & Karen Routledge

The information contained herein has been provided for information purposes only. The information has been drawn from sources believed to be reliable. Graphs, charts and other numbers are used for illustrative purposes only and do not reflect future values or future performance of any investment. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance. This does not constitute a recommendation or solicitation to buy or sell securities of any kind. Market conditions may change which may impact the information contained in this document. Wellington-Altus Private Wealth Inc. (WAPW) does not guarantee the accuracy or completeness of the information contained herein, nor does WAPW assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Before acting on any of the above, please contact your financial advisor.

www.wellington-altus.ca

Recent Posts

Beyond ESG Ratings: How We Evaluate Responsible Investments

Beyond ESG ratings: How we evaluate responsible investments

Understanding our responsible investing process

Responsible investing has become an increasingly important part of the investment landscape. As environmental, social, and governance (ESG) investing has become more widely adopted, many investors are surprised to learn that different ESG research organizations often assign different ratings to the same company.

Rather than viewing these differences as a weakness, we believe they reflect the complexity of evaluating corporate sustainability. No single research provider captures every dimension equally well.

For this reason, we developed a proprietary ESG assessment methodology that combines multiple independent sources of research into one disciplined and consistent investment framework.

Why this matters

Responsible investing is about more than simply selecting companies with favourable ESG ratings. It requires a disciplined investment process that balances sustainability considerations with sound financial analysis.

Our methodology is designed to identify companies that demonstrate responsible corporate behaviour while continuing to meet the financial characteristics we believe are important for long-term investment success.

Our layers of ESG due diligence

July 2026 Market Update – Middle East Uncertainty, Central Bank Caution, and Resilient Economic Growth

What happened in July? Geopolitical developments in the Middle East remained an important influence on global markets during July. Renewed military activity involving the United States and Iran contributed to continued uncertainty, while developments surrounding shipping routes and energy infrastructure kept oil markets particularly sensitive to changing events. Oil prices experienced renewed volatility throughout the month, rising following heightened tensions in early July before easing later in the month as markets responded to changing geopolitical developments. Despite the late-month decline, oil prices finished July more than 20 per cent above their levels at the end of February, reflecting the ongoing impact of geopolitical risk on global energy markets. While geopolitical developments remained the primary focus for investors, economic data and central bank decisions continued to shape expectations for inflation and interest rates. The Bank of Canada and the U.S. Federal Reserve both maintained their policy interest rates during July, while inflation data suggested that price pressures remain above central bank targets despite some moderation from recent highs.

Summer 2026 Newsletter – The Wagner Investment Management Team

As we move through summer 2026, it’s a great time to take a step back from the headlines and focus on the bigger picture of your financial plan.

Discover how evolving market dynamics are shaping the investing landscape, explore the lessons that Jevons Paradox may offer for energy markets and artificial intelligence, and learn practical ways to support the next generation through homeownership, tax planning, and financial education. Plus, gain valuable estate-planning insights on navigating the transition when children reach adulthood.

Let’s make this summer a season of perspective, preparation, and opportunity – helping you stay focused on your long-term goals while we continue to navigate changing markets together.

June 2026 Market Update – Middle East Tensions, Oil Price Swings, and Easing Energy Concerns

Geopolitical tensions in the Middle East remained a key influence on global markets during June. Developments involving the U.S., Iran, Israel, Gaza, and Lebanon contributed to periods of heightened uncertainty, particularly in energy markets. Concerns surrounding shipping through the Strait of Hormuz, a key global oil transit route, led to temporary increases in oil prices during the month. However, as tensions eased, oil prices retreated approximately 30 per cent from their June 3 intraday high, ending the month near where they finished in late February.

Mid Year Market Update – June 2026

The markets have given investors plenty to think about during the first half of 2026.

The information contained herein has been provided for information purposes only. The information has been drawn from sources believed to be reliable. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual’s objectives and risk tolerance. This does not constitute a recommendation or solicitation to buy or sell securities of any kind. Wellington-Altus Private Wealth Inc. (WAPW) does not guarantee the accuracy or completeness of the information contained herein, nor does WAPW assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Before acting on any of the above, please contact your financial advisor.