” I Don’t Conquer, I Submit ” -Giacomo Casanova
Markets Snap Losing Streak
Stocks rose on Friday, breaking out of a recent slump that had hammered major indexes in recent days and sent the benchmark U.S. index toward four-month lows. The S&P 500 closed at 1,359.88, up 6.55 points. The Dow Jones industrial average closed at 12,588.31, up 45.93 points, or 0.4 per cent – after recovering more than 110 points from its earlier low. In Canada, the S&P/TSX composite index closed at 11,877.72, up 66.34 points. On Friday, there was at least one encouraging sign on the fiscal cliff after House Speaker John Boehner said that he had had “constructive” talks about the U.S. budget with President Barack Obama. The news reversed market losses near the start of trading.
Markets Oversold ?
From a technical perspective, markets appear oversold. The 14-day relative-strength index for the S&P 500, for instance, fell to 27.7 on Wednesday. That’s the first time since June that the gauge of market momentum slid below 30. The move comes after major U.S. indexes broke below their 200-day moving averages in recent sessions.
The main blame has been tied to worries that the U.S. is heading towards the fiscal cliff of tax increases and spending cuts at the end of this year, since a divided Congress may not be able to apply the brakes on time. President Barack Obama on Wednesday was both tough-minded and conciliatory at a White House press conference, saying he is open to discussing most ideas but none that would prevent the richest Americans from paying higher taxes. There are growing feelings, however, that the 5.1 % fall in the S&P 500 since Mr. Obama’s re-election is at least already partly pricing in a failure to prevent the fiscal cliff. That suggests stocks could be heading for a rally if Washington can move beyond the gridlock that has been its recent woe.
The TSX closed at 11877, down -320 points or -2.62% over the past week. YTD the TSX is down 0.6%.
The DOW closed at 12588, down -227 points or -1.12% over the past week.YTD the DOW is up 3.0%.
The S&P closed at 1359, down -21 points or -1.45% over the past week.YTD the S&P is up 8.1%.
The Nasdaq closed at 2853, down -52 points or -1.78% over the past week.YTD the Nasdaq is up 9.5%.
Sources: Bloomberg; Globeadvisor