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The major U.S. stock indexes lost ground again this week, as high inflation (7.5% annual rate in January) and a promise by the U.S. Federal Reserve Chair Jay Powell that rate hikes are coming kept selling pressure on equities, aided and abetted by the macro uncertainties arising from the continuing Russian invasion of Ukraine. While energy and utility stocks gained ground with various sanctions and embargoes stanching much of Russian energy exports, it wasn’t enough to offset steep delcines in U.S. bank and financial sectors. Even the gain of 678,000 jobs in February did not help market sentiment. The S&P 500 Composite Index lost 1.3% on the week, as a result, and the technology-weighted Nasdaq Composite Index retreated 2.8%.
Toronto’s benchmark S&P/TSX Composite Index, on the other hand, advanced 1.4% on the week, with strong gains in materials and energy. As previously telegraphed, the Bank of Canada raised its policy rate on March 2 by 25 basis points, to 0.5%, signalling more hikes to come.
The Ukraine war has goosed all commodity prices, and primarily crude oil, which surged 25.6% on the week on fears of supply shortages – shortages that Canada is unable to fill, despite having some of the world’s largest energy reserves, owing to the federal Liberal government-mandated shutdowns of oil-and-gas exploration, drilling, pipelines, and tanker shipping over the past few years.
The resulting rise in crude oil prices has rippled through the energy markets, raising prices of distilled product, including most visibly, gasoline at the pump, exacerbated by many assorted provincial and federal excise and carbon taxes. That’s been a windfall for Canada’s remaining diversified energy companies, contributing to the 5.6% weekly gain for the TSX energy sector, a major component, with financials, of the S&P/TSX Composite.
Gold, meanwhile, continued its crisis-hedge-driven uptrend, advancing 4.6% on the week and contributing to strong gains in the materials sector.
* BMO debuts global real estate tech funds. BMO Investments Inc. on March 4 launched two new funds managed by Brookfield Public Securities Group LLC. The funds invest in companies focused on listed real assets including global tech-focused real estate, renewables, and sustainable infrastructure.
BMO Brookfield Global Real Estate Tech ETF (TSX: TOWR) invests in global technology-focused real estate companies, including data centers, communications infrastructure and industrials. The fund employs fundamental, bottom-up, value-based security selection. The fund is also available as a mutual fund.
BMO Brookfield Global Renewables Infrastructure ETF (TSX: GRNI) holds a portfolio of global renewables and sustainable infrastructure companies, specifically targeting wind and solar, clean power, clean technology and water sustainability sectors. The fund employs fundamental, bottom-up, value-based security selection. The fund is also available as a mutual fund.
* Stone Asset merges two RI funds. Stone Asset Management announced on March 2 that it is planning to merge the Stone Global ESG Strategy Fund into Stone Global Sustainability Fund, effective at the close of business on May 6, 2022.
In a release Stone said The investment objectives of the two funds are similar as they both invest in a portfolio of securities that meet the ethical and sustainability criteria. In addition, the Stone Global Sustainability Fund will benefit from a larger asset base, allowing for increased portfolio diversification opportunities, and has the same risk category as the discontinued fund.
* Mulvihill enhanced yield bank ETF start trading. Mulvihill Capital Management on Feb. 28 debuted the Mulvihill Canadian Bank Enhanced Yield ETF (TSX: CBNK). The fund invests in shares of Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, and The Toronto-Dominion Bank. To generate additional income, maangers will write covered call options and/or cash-covered put options on a portion of the securities in its portfolio.
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