Aah-eeh-ah-eeh-aaaaaah-eeh-ah-eeh-aaaaah! -Tarzan of The Apes
TSX Down After Six Straight Weeks of Gains
On a day when Canada’s GDP figures showed better than expected growth for the economy the Toronto Stock Exchange should have been surging but energy stocks are once again under pressure. Statistics Canada reported that third-quarter gross domestic product ran ahead at an annualized pace of 2.8%. That was much higher than the 2.1% rise that economists had expected. Despite this otherwise great news the S&P/TSX composite index dropped 177.69 points to 14,744.75 after OPEC left its daily output unchanged despite a global glut in supplies rather than cut production to put a floor under prices that have fallen 35 per cent since mid-summer because of a higher U.S. dollar, lower demand and most particularly, a glut of global supply.
U.S. indexes were little changed at the end of a shortened session, benefiting from lighter exposure to resource companies versus the TSX. The Dow Jones industrials gained 0.49 of a point to 17,828.24, the Nasdaq added 4.31 points to 4,791.63 while the S&P 500 index faded 5.27 points to 2,067.56.
Bank of Canada To Raise Rates In May Says OECD
The Organisation for Economic Co-operation and Development ECD forecasts the Bank of Canada will begin hiking its key interest rate in May 2015; months ahead of what economists have been predicting. In its latest Economic Outlook, the Paris-based group says the central bank will eventually need to raise the currently low 1% to “counter inflationary pressures,” with the rate to rise steadily afterwards.
“Monetary policy has been highly accommodative for some time,” says the 236-page report. “Given the uncertainty surrounding the amount of economic slack, the Bank of Canada should maintain its current policy stance for the time being. But it will have to start to withdraw stimulus as remaining slack is progressively taken up.” Most economists have been predicting the BoC won’t make a move on interest rates until at least late 2015. The bank has maintained its trend-setting rate at 1% for more than four years. The OECD also projects that Canada’s economy will grow by 2.6% next year, and 2.4% in 2016, largely driven by export demand from the U.S. economy.
Market Update as of November 28 2014
The TSX closed at 14745, down -363 points or -2.40% over the past week. YTD the TSX is up 8.24%.
The DOW closed at 17828, up 18 points or 0.10% over the past week. YTD the DOW is up 7.55%.
The S&P closed at 2068, up 4 points or 0.19% over the past week. YTD the S&P is up 11.90%.
The Nasdaq closed at 4792, up 79 points or 1.68% over the past week. YTD the Nasdaq is up 14.72%.
Gold closed at 1176, down -24.00 points or -2.00% over the past week. YTD gold is down -2.33%.
Oil closed at 66.26, down -10.27 points or -13.42% over the past week. YTD oil is down -32.81%.
The USD/CAD closed at 1.142601, up 0.0188 points or 1.67% over the past week. YTD the USD/CAD is up 7.47%.
Sources: Bloomberg; Investment Executive; advisor.ca; Statistics Canada