” Am I Not Destroying My Enemies When I Make Friends of Them ? ” -Abraham Lincoln
The TSX rose higher for a second session Friday as investors continued to react enthusiastically to an aggressive stimulus program from the U.S. Federal Reserve. The S&P/TSX composite index gained 139 points to 12,499 rising 1.88% this week. The loonie was off 0.3 of a cent to 102.97 cents US, which is still a 12-month high. The loonie surged more than two cents over the past seven sessions as the European Central Bank announced a plan to purchase government bonds in order to keep eurozone borrowing costs under control and speculation mounted the Fed would act to support a slowing economy — as it did on Thursday.
U.S. indexes were higher a day after the Fed delivered on those expectations when it announced it will spend US$40 billion a month on a new round of bond purchases and will continue to do so until the job market shows substantial improvement. “The one element of this that I wasn’t sure they would go ahead with was making this open-ended,” said Bob Gorman, chief portfolio strategist at TD Waterhouse. “And what it also does is remove the question of what will they do next _ they’re telling you, OK, this is in place ’til the cows come home or unemployment hits 7% (currently over 8%), whichever comes first pretty much.” The money will be spent on mortgage-backed securities to keep interest rates low, encourage lending and support the slow recovery of the housing sector. The Dow Jones industrials closed well off session highs, but still up 53.51 points to 13,593.37.
Market Update September 14, 2012
The TSX closed at 12499, up 231 points or 1.88% over the past week. YTD the TSX is up 4.55%.
The DOW closed at 13593, up 286 points or 2.15% over the past week.YTD the DOW is up 11.25%.
The S&P closed at 1466, up 28 points or 1.95% over the past week.YTD the S&P is up 16.53%.
The Nasdaq closed at 3184, up 48 points or 1.53% over the past week.YTD the Nasdaq is up 22.23%.
Gold closed at 1773, up 34.00 points or 1.96% over the past week.YTD gold is up 13.29%.
Oil closed at 98.98, up 0.82 points or 0.84% over the past week.YTD oil is up 0.08%.
The USD/CAD closed at 0.971, down -0.0062 points or -0.63% over the past week.YTD the USD/CAD is down -0.90%.
Sources : Bloomberg; Investment Executive; advisor ca; TD Waterhouse