“I Am A Slow Walker, But I Never Walk Backwards” -Abraham Lincoln

Markets Higher As Trump Sworn In

North American stock markets closed on a high note Friday, though investors who have been seeking clarity for weeks from Donald Trump got little of it during his inaugural address as president. The S&P/TSX composite index added 138.07 points to 15,547.88 in a fairly broad-based rally. The materials sector of the TSX led the charge, up 1.64%, while global gold stocks climbed 1.25% and the financials sector gained 0.98%. Energy stocks were up 0.82%. In New York, the Dow Jones industrial average gained 94.85 points to 19,827.25, while the S&P 500 was up 7.62 points at 2,271.31 and the Nasdaq composite added 15.25 points at 5,555.33.
Stock markets have rallied in the wake of Trump’s election win on expectations that he would increase infrastructure spending, cut corporate taxes and deregulate industry — measures expected to stimulate the U.S. economy. But the upwards trajectory has stalled recently as investors seek greater assurance to determine whether Trump’s actions will justify the gains. Trump’s inauguration speech echoed the protectionist, pro-America themes that he hit on during his campaign but shed no light on issues that could have repercussions for the markets, such as trade and taxation.

In economic news, Statistics Canada reported that the annual pace of inflation climbed higher last month, but falling food prices offset gas price increases, making the increase smaller than expected. The consumer price index was up 1.5% in December compared to where it was a year ago — higher than November’s increase of 1.2%. Economists had been expecting a 1.7% year-over-year increase in December.

 

Support of Adult Children Is Impacting Boomers’ Finances

Baby boomers who are facing the prospect of their kids returning to live at home must plan for the financial impact on their retirement savings, according to the results of a new survey from Toronto-Dominion Bank. The survey of both millennial (aged 18 to 34) and baby boomer (aged 52 to 70) clients finds that the phenomenon of millennials returning to live at home with their parents is impairing the ability of the older generation to save for retirement. The survey found about 25% of boomers report that they are providing financial support to either their children or grandchildren, 62% of boomers say this is preventing them from saving enough for their own retirement, and 58% report feeling financially stressed as a result.
Millennial offspring are not unaware of the stress this arrangement puts on their boomer elders. Nearly half of millennials (44%) who are supported by their boomer parents or grandparents know that their financial situation will lead to reduced retirement savings, and 43% of millennials admit that they’d sooner cut costs than ask for financial help when they have money problems. The online survey of 523 millennials (aged 18 to 34) and 365 non-retired Boomers (aged 52 to 70) was completed online between Oct. 21 and Nov. 3, 2016. The margins of error for these samples is +/-4.3%, 19 times out of 20 for the millennials and +/- 5.1% 19 times out of 20 for boomers.

 

Sources: Bloomberg; Investment Executive; advisor.ca; TD Bank