On Friday, U.S. Federal Reserve chairman Ben Bernanke made no clear commitment to another round of economic stimulus, but did state that he is willing to deploy further stimulus if required.   He said the U.S. labour market was a grave concern and that previous Fed policy tools had been effective in boosting economic growth.

The news of a “potential” stimulus led to a boost in commodity prices.  Gold rose $30.50 to $1,687.60 (U.S.) an ounce, its highest level since March. Crude oil rose $1.85 to $96.47 a barrel.  Gold is seen as a natural hedge against inflation, a possible consequence of the Fed’s monetary policies.

Also on Friday Statcan announced that GDP rose by 0.5 per cent in the second quarter to 1.8 per cent on an annual basis, largely due to strong business investment and rising inventories.  Business investment rose 2.3 per cent in the quarter, but exports were a lag on the overall economy, slowing to 0.2 per cent.

Scotiabank made its largest-ever acquisition on Wednesday, with the purchase of ING Bank of Canada for $3.13-billion.  ING Canada launched in 1997 and over the years built up a base of 1.8-million customers.   ING will retain its branding for 18 months before Scotiabank renames the operations

Earlier in the week, the big 5 Canadian banks delivered $7.8 billion of cumulative profit in Q3 2012, an increase of 45% over last year and surpassing  analyst predictions.  All 5 banks announced dividend hikes of between 3-6%.

source: Advisor.ca, Financial Post

MARKET RECAP (as of August 31, 2012)

  • The TSX closed at 11949, down -133 points or -1.10% over the past week. YTD the TSX is down -0.05%.
  • The DOW closed at 13091, down -67 points or -0.51% over the past week.YTD the DOW is up 7.15%.
  • The S&P closed at 1407, down -4 points or -0.28% over the past week.YTD the S&P is up 11.84%.
  • The Nasdaq closed at 3067, down -3 points or -0.10% over the past week.YTD the Nasdaq is up 17.74%.
  • Gold closed at 1690, up 17.00 points or 1.02% over the past week.YTD gold is up 7.99%.
  • Oil closed at 97.51, up 1.39 points or 1.45% over the past week.YTD oil is down -1.41%.
  • The USD/CAD closed at 0.9875, down -0.0045 points or -0.45% over the past week.YTD the CAD/USD is up 0.79%