Weekly Market Commentary January 12th 2023

The Markets

Last Friday, we learned from employment data from south of the border that demand for workers remained strong in 2022. The U.S. unemployment rate dropped to 3.5 percent in December. (It was 3.7 percent in November.) That brought American unemployment back to where it was before the pandemic – at the lowest level in more than 50 years, reported Megan Cassella of Barron’s. Canada’s unemployment rate has also been trending downwards, though at a slower rate, falling slightly to 5.0 percent last month.

Financial markets responded enthusiastically, making Friday the best day for U.S. stocks in more than a month. The S&P 500 index, Dow Jones Industrial Average, and Nasdaq Composite index all gained more than two percent on Friday, reported Bloomberg. North of the border, the S&P/TSX composite index also had a positive week, and the bond market rallied, too. Yields on U.S. Treasuries dropped lower across most maturities while yields on Government of Canada bonds and Treasuries remained more-or-less flat.

It’s important to note that not all companies were hiring in December. Thursday’s private payrolls report showed 235,000 jobs were created in December despite larger companies cutting more than 150,000 jobs. The drivers of jobs growth in the U.S. right now are small- and medium-sized businesses, which added enough jobs to offset layoffs by larger employers, reported Bloomberg.

Large technology firms are among the companies laying off workers. Many borrowed and spent significant amounts of money to grow during the pandemic when demand for tech products and services was high. However, consumer demand has diminished, and large tech firms have been forced to reevaluate. Weak performance among tech stocks is one reason 2022 was a dismal year for the Nasdaq Composite Index, reported Tae Kim of Barron’s.

If you have any questions or concerns about your investment portfolio or recent market events, please don’t hesitate to get in touch with us.

Source: FactSet

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What happens in Vegas doesn't always stay in Vegas

This month, Las Vegas hosted the Consumer Electronics Show, also known as CES. It’s where everyone goes to gawk at the latest technology innovations. Some of the wacky and delightful products will arrive in stores this year while others are aspirational. Here is a glimpse at what the future may hold in transportation:

Jetson-style flying vehicles. It seems that a flying car may soon be approved by the Federal Aviation Administration. Imagine a large SUV with wings that are tipped with propellers. The vehicle holds four people, runs on electric batteries, has a small gas engine (just in case), and can hover into a conventional parking space. The company that builds this space-age vehicle plans to start a ride-sharing service in 2026, reported Bree Fowler of CNet.

A smart baby stroller. It can’t tell you why the baby is crying or change a diaper, but a baby stroller equipped with artificial intelligence can make it easier to go up hill and stay in control when going downhill. It also will move on its own when your child wants to walk instead of ride, reported Popular Science.

Your new best friend. Fans of Herbie “The Love Bug” and Knight Rider may be intrigued by the prospect of sentient vehicles. DEE, short for digital emotional experience, is a futuristic mid-sized sedan intended to strengthen the bond between humans and autos. The model at CES featured “a digital assistant, color-changing technology and an augmented-reality windshield,” reported Nelson Aguilar of CNet.

Other notable transportation innovations included an electric pickup truck with “shadow mode” that allows it to follow its driver around, a dashboard security camera that records what’s happening inside and outside of the vehicle, and a surround sound system that makes you feel as though you’re at a concert.

Weekly Focus – Think About It

“If you think in terms of a year, plant a seed; if in terms of ten years, plant trees; if in terms of 100 years, teach the people.”

—Confucius, philosopher