“If You’ve Got a Frog to Swallow Don’t Spend a Lot of Time Looking At It ” -Mark Twain
TSX Gains on Loonie Rebound on Rising Oil, and some Surprising News out of Japan
The S&P/TSX Composite finished the week up for the second straight week, closing at 12,822.13, helped by some potentially good news in the oil market. Oil finished the week at $33.74USD, as word on talks between OPEC countries toward a more controlled supply to the market offered investors hope.
Oil has now rebound more than 25% from the 12-year lows it hit last week. Russia may also work toward cutting oil supply in order to help buoy oil’s price. As goes oil, so goes the Loonie, or so it would seem. The Loonie finished at 71.55 cents per US Dollar, down slightly for the day, but up about 1% on the week. Gold increased for the 4th consecutive week, closing out at $1,118.00 on Friday, and up by 1.8% for the week.
South of the border, the Dow Jones Industrial Average finished the week strong, gaining 396.66 points, or 2.47%, on Friday alone, and finished at 16,466.30. The NASDAQ also had a strong Friday, gaining 107.28 points, or 2.38%, to close out the week in positive territory. The New York Stock Exchange continued the trend of strong finishes in the United States, closing up 2.50% on Friday (234.91 points) to finish the week at 9632.70. The S&P500 rounded out the story in America with a gain of 46.88 points on Friday, or 2.48%, to finish at 1940.24.
News out of Japan shocked the markets on Friday, as the Bank of Japan announced a rate drop into negative territory, with a -0.1% rate, meaning it will charge institutions for parking money with the DOJ. This is an aggressive move, and it may not be the last. As a result, the Yen suffered with a loss against the Greenback; however, Asian stocks got a jolt as a result, with the Nikkei finishing the week up 3.3%, to 17518.30. There was a clear jump in the Japanese market, as a majority of the weekly gain was felt on Friday, after the BOJ’s announcement. The Hang Seng also experienced a surge on the BOJ’s news, steadily gaining on Friday following the announcement, and in the process, wiping out earlier losses on the week to finish in the black at 19,683.11. The Hang Seng was up 487.28 points, or 2.54%, on Friday.
Japan’s aggressive rate cut, combined with the potential for a supply cut in oil, helped the markets to stabilize this week. However, most markets are still significantly down from their recent highs of the last 6 months. There is still a lot of value to be had, with a rebound in markets inevitable. For the Canadian investor, this recent market swoon is a blessing in disguise, as it is just before the RRSP deadline of February 29th.
CRA Gives Up On Millions of Money Owed
It was a busy year in court for CRA. The revenue agency won 201 tax fraud cases, worth $106.6 million in lost tax money, in 2014-2015. Of those, the most expensive were 142 income tax cases, which CRA says cheated the government of $99.6 million in tax revenue. That’s an average of more than $700,000 per case.
Last year, CRA won court convictions in 344 cases, worth a total of $119 million. Of that, CRA recovered $2.6 million (or 2.2%) last year, and it expects to get another $3.7 million (or 3.1%) this year. But the agency has already written off $6.2 million it doesn’t expect to ever collect, mostly from cases related to GST/HST fraud. CRA is also owed millions from 33 cases that go back to 2001. The agency had already collected $99.5 million, or 35%, out of $286 million awarded in judgments. In 2014-2015, it recovered a further $2.6 million from these cases. It expects to collect a further $23.4 million in later years, but it’s already written off $159,576,675!! So why are they still hounding you for that $29 you owe them?!
Weekly Market Wrap Up as of January 29 2016
The TSX closed at 12815, up 445 points or 3.60% over the past week. YTD the TSX is down -1.33%.
The DOW closed at 16466, up 372 points or 2.31% over the past week. YTD the DOW is down -5.50%.
The S&P closed at 1940, up 33 points or 1.73% over the past week. YTD the S&P is down -5.09%.
The Nasdaq closed at 4614, up 103 points or 0.50% over the past week. YTD the Nasdaq is down -7.85%.
Gold closed at 1118, up 10.00 points or 1.82% over the past week. YTD gold is up 5.57%.
Oil closed at 33.64, up 1.66 points or 5.19% over the past week. YTD oil is down -9.20%.
The USD/CAD closed at 1.399648, down -0.0147 points or -1.04% over the past week. YTD the USD/CAD is up 1.16%.
The MSCI World closed at 1533, up 33.00 Points or 2.32% over the past week. YTD the MSCI World is down -7.82%.
The Euro Stoxx 50 closed at 3045, up 22.00 points or 3.14% over the past week. YTD the EuroStoxx 50 is down -6.81%.
The FTSE closed at 6084, up 184.00 points or 4.82% over the past week. YTD the FTSE is down -2.54%.
The CAC closed at 4417, up 80.00 points or 4.91% over the past week. YTD the CAC is down -4.75%.
The DAX closed at 9798, up 33.00 points or 2.65% over the past week. YTD the DAX is down -8.80%.
The Nikkei closed at 17518, up 559.00 points or 2.16% over the past week. YTD the Nikkei is down -7.96%.
The Shanghai closed at 2738, down 179.00 points or -5.63% over the past week. YTD the Shanghai is down -22.65%.
Sources: Bloomberg; Investment Executive; advisor.ca,; yahoo finance