“I Was The Only Guy With Any Bit of Anarchy Left” –Sid Vicious
Lost Jobs But TSX Higher
The Toronto stock market closed up Friday, with strong gains from the gold sector as bullion prices advanced amid disappointing jobs data in both Canada and the United States. The S&P/TSX composite index jumped 118 points to 13,747, as traders contended with a major miss in Canadian jobs creation. The Canadian dollar was down 0.42 of a cent to 91.73 cents US as Statistics Canada reported that the economy shed 45,900 jobs last month instead of the 14,600 jobs economists had expected it to create. Meanwhile, Wall Street was mainly lower after the U.S. Labor Department said there were 74,000 jobs created in December as opposed to the 200,000 that economists had forecast. The Dow Jones industrials declined 7 points to 16,437 as investors weighed the possibility that the Federal Reserve won’t be in any rush to accelerate its program for cutting back on a key stimulus program. The Nasdaq was up 18 points to 4,174 and the S&P 500 index rose 4 points to 1,842. Recent economic data have painted a picture of a U.S. economy that is steadily improving. Exports hit a record level in November, lowering the U.S. trade deficit; businesses have ordered more manufactured goods and auto sales reached a six-year high in 2013. Analysts now estimate that the U.S. economy expanded at a healthy annual rate of three to 3.5% in the October-December quarter, up from earlier forecasts of a rate of 2% or less.
The TSX had a strong week, rising 198 points or 1.47%, paced by gains in the mining sectors, which were the worst TSX performers last year. The Dow ended the week flat.
Most Don’t Have TFSAs
More than half (53%) of Canadians still haven’t opened a TFSA (tax free savings account), and 42% of this group don’t intend to open one this year, according to an ING Direct survey. Fifty-two percent of those who still don’t have a TFSA cite not having money to contribute as the main reason. Thirty one percent admit they still don’t understand how TFSAs work and 38% are unsure about the current annual contribution limit. Retirement savings continue to be the main reason Canadians use TFSAs (46%). Within the younger (18-34 years) Canadian demographic, almost a third (31%) plan to use their TFSA for purchasing a home. Of the 47% of survey respondents who have opened a TFSA, nearly one in five (19%) are approaching the contribution limit. When looking at how Canadians are contributing, a lump sum deposit one to two times a year is most popular (52%), while 26% contribute to their TFSA on a monthly basis.
Market Update as of January 10, 2014
The TSX closed at 13748, up 199 points or 1.47% over the past week. YTD the TSX is up 0.92%.
The DOW closed at 16437, down -33 points or -0.20% over the past week.YTD the DOW is down -0.84%.
The S&P closed at 1842, up 11 points or 0.60% over the past week.YTD the S&P is down -0.32%.
The Nasdaq closed at 4175, up 43 points or 1.04% over the past week. YTD the Nasdaq is down -0.05%.
Gold closed at 1246, up 9.00 points or 0.73% over the past week. YTD gold is up 3.49%.
Oil closed at 92.8, down -1.45 points or -1.54% over the past week. YTD oil is down -5.89%.
The USD/CAD closed at 1.089, up 0.0255 points or 2.40% over the past week. YTD the USD/CAD is up 2.43%.
Sources: Bloomberg; Investment Executive; advisor.ca; ING; globeadvisor