Morning Market Brief: September 18, 2023

Inflation, consumer spending and the Fed?

This week will bring critical economic announcements that will help investors get a reading on the health of the Canadian economy and the next move by the Bank of Canada. Market participants will focus on the US on Wednesday when the US Federal Reserve Board (Fed) makes its next interest-rate announcement. Keep an eye out for these key economic announcements this week.?

• Statistics Canada (StatsCan) will release Canada’s inflation data for August on Tuesday. Canada’s annual inflation rate edged higher to 3.3% in July. Despite coming down over the past year, inflation remains elevated, contributing to tighter financial conditions for Canadians.
• The Fed comes into the spotlight on Wednesday as it wraps up its two-day meeting and makes its interest-rate announcement. The federal funds rate currently stands at a target range of 5.25%–5.50%. Economists are widely expecting the Fed to hold steady at this meeting.
• July’s retail sales in Canada will be released on Friday. A preliminary estimate from StatsCan projected retail sales grew by 0.4%. If the growth rate proves correct, it would be the fourth straight month of rising retail sales, suggesting Canadian consumers remain relatively resilient.
• As always, critical economic announcements will come from around the globe. European inflation will be announced on Tuesday, the Bank of England’s latest interest-rate decision will come on Thursday, and manufacturing data for September across many countries and regions will be released Thursday and Friday.

These critical economic announcements will drive market performance over the week. Depending on the results, financial markets could experience some volatility. Despite any volatility, it is essential to stay focused on your financial goals and remember to invest for the long term. Historically, short-term pullbacks in markets are followed by periods of relatively strong growth. In response to volatile markets, be prepared to pounce on opportunities for undervalued stocks that could be poised for growth.

At?CIBC Private Wealth, we aim to take a comprehensive approach to managing, building and protecting your wealth. If you'd like to discuss this market and economic update in more detail, please get in touch with your advisor any time.