“THE More Things Are Forbidden The More Popular They Become” -Mark Twain
TSX Ends Flat On Energy and Bank Shares
Canada’s main stock index ended flat on Friday, rattled by lusterless bank earnings and weakness in oil and gas shares, a day after its biggest single-day drop in 18 months. The resource-rich index has been pummeled in recent months by a slumping price for crude oil, which closed at its lowest since July 2009, with underwhelming numbers from some of Canada’s biggest lenders adding to the gloom. “This disappointment from the banks could honestly not have come at a worse time for the TSX” given the strain on energy stocks, said Elvis Picardo, a strategist at Global Securities in Vancouver. Shares in Bank of Nova Scotia lost 2 per cent to $66.20 after Canada’s No. 3 lender reported weaker-than-expected profit on previously announced charges related to soured bets in the Caribbean and Latin America. Despite the headwinds, the Toronto Stock Exchange’s S&P/TSX composite index inched higher, ending the day up 3.75 points, or 0.03%, at 14,473.70. The index ended last week at 14,744.75, a decline of 1.8% for the week.
In New York, the Dow Jones Industrial Average added 58.69 points, or 0.32% at 17,958.79, topping its Wednesday mark, while the S&P 500 index added 3.32, or 0.16%, at 2,075.24, also a record. The Nasdaq Composite Index rose 11.32, or 0.24%, to 4,780.76. The Canadian dollar ended at 87.47 cents (U.S.), down 0.44 of a cent.
Bank of Canada Maintains Interest Rate
The Bank of Canada is keeping its trend-setting interest rate at 1%, even as the Canadian economy shows signs of a broadening recovery. The central bank says improvements to Canada’s economic health have been offset by risks such as sliding oil prices and high household debt. In its rate announcement, the bank says inflation has climbed faster than expected due to the temporary effects of a lower Canadian dollar and price jumps in certain consumer sectors.
The bank says Canadian exports have picked up amid disappointing global growth thanks to an improved U.S. economy–a boost that has also led to more business investment and jobs in Canada. The document says the output gap appears to be smaller than the bank had predicted in its October monetary policy report due to the recent changes. The country’s overnight interest rate hasn’t budged since September 2010, keeping borrowing rates at historic lows.
Market Update as of December 5 2014
The TSX closed at 14474, down -271 points or -1.84% over the past week. YTD the TSX is up 6.25%.
The DOW closed at 17959, up 131 points or 0.73% over the past week. YTD the DOW is up 8.34%.
The S&P closed at 2075, up 7 points or 0.34% over the past week. YTD the S&P is up 12.28%.
The Nasdaq closed at 4781, down -11 points or -0.23% over the past week. YTD the Nasdaq is up 14.46%.
Gold closed at 1193, up 17.00 points or 1.45% over the past week. YTD gold is down -0.91%.
Oil closed at 65.65, down -0.61 points or -0.92% over the past week. YTD oil is down -33.42%.
The USD/CAD closed at 1.1436, up 0.0010 points or 0.09% over the past week. YTD the USD/CAD is up 7.56%.
Sources: Bloomberg; Investment Executive; advisor.ca;