“Autumn Is A Second Spring When Every Leaf Is A Flower ” -Albert Camus

TSX Climbs;  Canadian Dollar Takes a Dive

The loonie took a dive Friday as disappointing economic data coupled with recent comments by Bank of Canada governor Stephen Poloz hinted that an interest rate cut may be on the horizon. The Canadian dollar finished the day at 75.04 cents US, down 0.59 of a cent after Statistics Canada released new economic data showing weaker-than-expected inflation and retail sales figures.  The federal agency said the consumer price index was up 1.3% in September compared with a year ago. Statistics Canada also reported that retail sales fell 0.1% to $44.0 billion in August. The decline was due to lower sales at motor vehicle and parts dealers as well as general merchandise stores. Earlier in the week, Poloz said the central bank’s governing council actively discussed the possibility of cutting its benchmark lending rate before deciding to leave it at 0.5%.
The Toronto Stock Exchange’s S&P/TSX composite index hit a 16-month high, gaining 91.12 points to close at 14,939.04. The market hasn’t closed above 14,900 since late June 2015. Most segments of the TSX closed higher, with energy stocks leading the way, up 0.94% on stronger crude prices. The sole exception was consumer staples stocks, which slipped 0.15% after Statistics Canada reported that food prices declined last month.  In New York, the Dow Jones industrial average lost 16.64 points to 18,145.71, the S&P 500 index lost 0.18 of a point to 2,141.16 and the Nasdaq composite rose 15.57 points to 5,257.40. In other commodity news, the December crude contract strengthened to US$50.85 per barrel, up 22 cents.

 

CRA Reports $240m In Real Estate Tax Fraud

The CRA crackdown on real estate tax fraud is producing some big numbers in audit recoveries. The CRA’s website shows that, for the last year and a half, audit recoveries in B.C. and Ontario total more than $240 million. In B.C., $30.3 million (from 2,366 case files) was recovered; in Ontario, that figure jumps to $210.4 million (from 13,403 case files). The CRA applied an additional $12.5 million in penalties. Taxes on real estate transactions in the Greater Toronto Area have been under greater scrutiny for some years. In 2015, the CRA doubled its efforts in B.C. That was the same year the tax agency started a review of 500 high-dollar real estate transactions in B.C. to uncover tax issues not already identified. On its website, the CRA lists its top areas of concerns for real estate tax compliance, including: questionable fund sources for buying property; property flipping; unreported GST/HST on the sale of new or renovated property;  and unreported capital gains.
Taxpayers identified as high-risk are audited. The CRA applies penalties equal to 50% of the additional tax payable if a taxpayer knowingly makes a false statement when filing.

 

WEEKLY MARKET WRAP-UP

North America

The TSX closed at 14939, up 354 points or 2.43% over the past week. YTD the TSX is up 15.02%.
The DOW closed at 18146, up 8 points or 0.04% over the past week. YTD the DOW is up 4.14%.
The S&P closed at 2141, up 8 points or 0.38% over the past week. YTD the S&P is up 4.75%.
The Nasdaq closed at 5257, up 43 points or 0.82% over the past week. YTD the Nasdaq is up 4.99%.
Gold closed at 1268, up -6.00 points or 1.28% over the past week. YTD gold is up 19.74%.
Oil closed at 50.31, down -0.01 points or -0.02% over the past week. YTD oil is up 35.79%.
The USD/CAD closed at 1.333616, up 0.0173 points or 1.32% over the past week. YTD the USD/CAD is down -3.62%.

Europe/Asia
The MSCI closed at 1704, up 10 points or 0.59% over the past week. YTD the MSCI is up 2.47%.
The Euro Stoxx 50 closed at 3078, up 53 points or 1.75% over the past week. YTD the Euro Stoxx 50 is down -5.81%.
The FTSE closed at 7021, up 7 points or 0.10% over the past week. YTD the FTSE is up 12.48%.
The CAC closed at 4536, up 65 points or 1.45% over the past week. YTD the CAC is down -2.18%.
DAX closed at 10711, up 131.00 points or 1.24% over the past week. YTD DAX is down -0.30%.
Nikkei closed at 17185, up 329.00 points or 1.95% over the past week. YTD Nikkei is down -9.71%.
The Shanghai closed at 3091, up 27.0000 points or 0.88% over the past week. YTD the Shanghai is down -12.66%.

Sources: Bloomberg; Investment Executive;  advisor.ca