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Market Watch Weekly | January 28 | January... Are you done, yet?

Erik Dekker - Jan 29, 2022
If 2022 is out to make a case that it wants to be different from 2021, it's off to a good start. 2021 boasted attractive features like 20%-plus stock-market returns, historically-low volatility, 10-year interest rates that averaged 1.4%, no rate...

If 2022 is out to make a case that it wants to be different from 2021, it's off to a good start. 2021 boasted attractive features like 20%-plus stock-market returns, historically-low volatility, 10-year interest rates that averaged 1.4%, no rate hikes from the Bank of Canada, a fed funds target rate of 0% accompanied by a $1.4 trillion increase in the U.S. Fed's balance sheet (stimulus), and a roughly 50% rise in corporate profits. Four weeks into 2022, Canadian and U.S. stocks have dropped (the S&P 500 is down roughly 10%), as 10-year U.S. Treasury rates have risen from 1.5% to as high as 1.9% (rising U.S. rates have been the recent catalyst for broad market volatility), while the US Federal Reserved announced it would end bond purchases in March and hike the fed funds rate as many as five times this year.

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