Manufacturing activity in the U.S. fell in March to its lowest level in nearly three years. The latest Institute for Supply Management (ISM) survey released yesterday showed manufacturing activity decreasing to 46.3 in March, below the median estimate of 47.5. Excluding the pandemic, last month’s reading was the worst since 2009 with analysts saying activity could decline further due to growing recession fears, and tighter lending conditions. Despite manufacturing pulling back, data is showing that the service sector remains strong with some noting that if the service sector gauge remains well above 50 when reported on Wednesday, the broader economy may be well positioned.  

Business sentiment sours. The latest BoC survey showed the outlook for Canadian businesses turned negative for the first time since 2020. The Business Outlook survey and Survey of Consumer expectations revealed Canadians are weary about the economy, despite the survey finding that both expect inflation to slow faster than they previously thought. In the first quarterly report since the BoC declared a conditional rate pause, businesses and consumers see the economy heading to a mild recession in the next 12 months, with wage expectations still elevated amid a tight labour market. The data suggests the central bank’s aggressive rate increases over the past year are working to drag down inflation expectations and are starting to cool the economy. Businesses and consumers expect inflation to remain above 2% until at least 2025, and with a potential recession looming, the surveys show consumers expect to pull back on spending while businesses anticipate sales to slow. 

Many were hoping for a wave of IPOs and secondary stock offerings last month, but the banking crisis triggered by SVB caused a flight to safety. Even with the VIX retreating, dealmakers are worried the fear gauge will shoot back up and spook investors. Amid the chaos surrounding SVB, U.S. IPOs and secondary stock offerings raised just $1.5 billion, an 83% drop from the prior three weeks and 64% less than the same span of 2022. It's no surprise that stock sales typically go dark during times of uncertainty and the turmoil is still fresh in the collective memory. Despite volatility decreasing, helped by governments, central banks, and financial institutions taking measures to mitigate the banking crisis, potential investors remain concerned, with many expecting the number of deals to remain low for the foreseeable future. 

It looks like a sellers' market in Calgary, where supply remains a challenge. Home sales have fallen over 40% YoY in Calgary according to the Calgary Real Estate Board, while also experiencing the market's lowest March inventory level since 2006. Existing homeowners appear to be reluctant to list their homes as they struggle to find an acceptable housing alternative while also contending with higher lending rates. If you happen to be a homeowner in Calgary, you will be happy to know that the benchmark price for a home in Calgary was still up almost 1% YoY to $541,800. 

One small step for man, one giant leap for Canada! Move over Musk, Branson, and Bezos, Canadian Jeremy Hansen is set to become the first Canadian and non-American to encircle the moon. Hansen, a 47-year-old astronaut and CF-18 pilot, has been given the nod to join Artemis II, the first mission to the moon in over 50 years. Since being elected for the space program in 2009, Hansen has been waiting 14 years for a mission assignment. Born in Ingersoll, Ontario, he attended the Royal Military College of Canada in Kingston and graduated top of his class in 1999. The married father of three is currently training in Houston as he prepares to blast off on the lunar mission in November 2024. 



Diversion: What was her plan here? 

After capping its worst first-quarter drop since 2020, when the pandemic pummeled demand, oil prices have surged following OPEC+'s announcement that it would slash production by more than 1 million bpd. WTI soared as much as 8% yesterday, the biggest intraday move in more than a year before paring the gains. The group said that the move was precautionary and meant to ensure market stability. Aside from the reduction from countries like Saudi Arabia and other Middle Eastern countries, Russia also pledged to keep production at a reduced level which means that the total decrease could be as high as 1.65 million bpd through the second half of the year. 

Europe will be testing out their fixed income market with their first senior bank bond offering since the outbreak of financial sector turmoil in the U.S. and the rescue of Credit Suisse Group AG. The offering from French lender BNP Paribas SA is the first non-covered bank bond since March 9, the day before the Silicon Valley Bank collapse. The bank funding market for anything other than the safest deals came to a halt in the weeks after the failure of several US banks and the emergency takeover of Credit Suisse. This will be a good test for market sentiment, the proceeds from the green senior non-preferred offering can only go toward sustainable projects, opening up the bond to ESG investors. Also, coupled with the fact the issuer is one of the largest banks in France makes it more digestible for the market.