“In Three Words I Can Sum Up Everything I’ve Learned About Life: It Goes On” -Robert Frost

Financials Sector Boosts North American Markets

North American stock markets finished Friday on a positive note, led by financial companies as U.S. President Donald Trump prepared to scale back regulations affecting the sector. Toronto’s S&P/TSX composite index climbed 77.28 points at 15,476.39, with the financials sector up 0.8%. South of the border, the Dow Jones industrial average added 186.55 points at 20,071.46 and the S&P 500 climbed 16.57 points at 2,297.42. The Nasdaq composite gained 30.57 points at 5,666.77, a new all-time high. Michael Currie, a vice-president and investment adviser at TD Wealth, says the financials sector benefited from Trump’s first steps aimed at loosening regulations affecting the industry. Trump signed an executive order directing the Treasury Secretary to explore potential changes to the Dodd-Frank law, which was implemented after the global financial crisis of 2008-09. “The most regulated sector of the market is financials, so every time we hear about regulations being cut it tends to favour them the most,” Currie said.

U.S. stocks also got a boost from a better-than-expected jobs report. The U.S. Labor Department reported that employers added 227,000 jobs last month — more than last year’s average monthly gain of 187,000.
The Canadian dollar was at US76.76¢, down 0.04 of a U.S. cent from Thursday’s close. “It’s been trading in the 70s for a while,” Currie said. “As we get closer to 80, Canada starts to get a little bit more worried. It makes us a little less competitive when we’re up close to the 80-cent mark.”

 

Trudeau Rules Out Tax On Health Benefits

Prime Minister Justin Trudeau has ruled out a tax on health and dental benefits in the upcoming federal budget. Addressing interim Conservative Leader Rona Ambrose at Question Period on Wednesday, the prime minister refuted that such a levy would be introduced. “We are committed to protecting the middle class from increased taxes and that is why we will not be raising the taxes,” he said. In addition, and contrary to months of speculation regarding the proposed benefits tax, Trudeau stated this was never under consideration by his government. Responding to Conservative MP Denis Lebel, who asked would there be a “new tax on dental and health care?” the prime minister countered that: “It was never in our plan to increase taxes as suggested by the member.” The denial came just hours after Minister of Finance Bill Morneau had told reporters: “We are not going to talk about budget measures in advance of the upcoming budget.”

The prime minister’s comments will come as welcome news to Canada’s 13.5 million workers that have health or dental coverage, as well as the “Don’t Tax my Health Benefits!” campaign. Part of that group is the Canadian Life and Health Insurance Association (CLHIA), which responded to the government’s apparent volte-face. “We fully support the decision to maintain the current tax treatment of employer health benefits that over 22 million Canadians rely on for their healthcare needs,” said Stephen Frank, SVP, Policy, CLHIA.

 

North America
The TSX closed at 15476, down -100 points or -0.64% over the past week. YTD the TSX is up 1.30%.
The DOW closed at 20072, down -22 points or -0.11% over the past week.YTD the DOW is up 1.56%.
The S&P closed at 2297, up 2 points or 0.09% over the past week.YTD the S&P is up 2.59%.
The Nasdaq closed at 5667, up 6 points or 0.11% over the past week.YTD the Nasdaq is up 5.28%.
Gold closed at 1222, up -7.00 points or 2.35% over the past week.YTD gold is up 7.38%.
Oil closed at 53.85, up 0.65 points or 1.22% over the past week.YTD oil is up 3.12%.
The USD/CAD closed at 0.767, up 0.0064 points or 0.84% over the past week.YTD the USD/CAD is up 3.38%.

Europe/Asia
The MSCI closed at 1795, down -9 points or -0.50% over the past week. YTD the MSCI is up 2.40%.
The Euro Stoxx 50 closed at 3273, down -30 points or -0.91% over the past week.YTD the Euro Stoxx 50 is down -0.55%.
The FTSE closed at 7188, up 3 points or 0.04% over the past week.YTD the FTSE is up 0.63%.
The CAC closed at 4825, down -15 points or -0.31% over the past week.YTD the CAC is down -0.76%.
DAX closed at 11652, down -162.00 points or -1.37% over the past week.YTD DAX is up 1.49%.
Nikkei closed at 18918, down -549.00 points or -2.82% over the past week.YTD Nikkei is down -1.03%.
The Shanghai closed at 3140, down -19.0000 points or -0.60% over the past week.YTD the Shanghai is up 1.16%.

 

Sources: Bloomberg; Investment Executive; advisor.ca