“Replace Negative Thoughts With Positive Thoughts And You’ll Have Positive Results” – Willie Nelson

 

TSX Slips On Materials And Financials

Gold miners and large financial services companies dragged Canada’s main stock index lower Friday, as Wall Street made modest moves. On Bay Street, the S&P/TSX composite index dropped 71.92 points to 15,490.49 with the materials sector being biggest decliner on the commodity-heavy index.  In New York, markets were mixed. The Dow Jones industrial average fell 19.93 points to 20,914.62, while the S&P 500 index inched down 3.13 points to 2,378.25. The Nasdaq composite index gained 0.24 of a point at 5,901.00. The Canadian dollar sat just below the 75-cent mark, up 0.06 of a U.S. cent at US74.98¢. In commodities, the May crude oil contract added US7¢ at US$49.31 per barrel and the April natural gas contract rose US5¢ at US$2.95 per mmBTU. The April gold contract added US$3.10 at US$1,230.20 an ounce and May copper gained a cent to US$2.69 a pound.

 

Canadian Household Debt Creeps Up To Another Record 

The amount Canadians owe compared with how much they earn hit another record high last year. Statistics Canada said the amount of household credit market debt rose to 167.3% of adjusted household disposable income in the fourth quarter (Q4), up from 166.8% in the third quarter. That means there was $1.67 in credit market debt for every dollar of adjusted household disposable income.

Fuelled by mortgages and low interest rates, household debt has been climbing steadily in recent years. Policymakers have raised concerns about household debt and see it as a key risk to the economy. While interest rates have been low for years, making borrowing money cheap for Canadians, some have expressed concerns about what could happen when rates rise or if there is a shock to the economy that results in a large number of job losses. Total household credit market debt, which includes consumer credit, and mortgage and non-mortgage loans, totalled nearly $2.029 trillion in the final quarter of last year. Mortgage debt accounted for 65.5% of the total. In Q4 2016, households borrowed an additional $28.4 billion on a seasonally adjusted basis, up from $18.7 billion added in the previous quarter. However, even as borrowing rose, household sector net worth at market value rose 1.0% in Q4 2016 to $10.268 trillion, boosted by gains in the stock market. The latest reading on household debt from Statistics Canada came as consumer credit company Equifax said in its national consumer credit trends report that total consumer debt held by Canadians, including mortgages, in Q4 2016 increased 6% cent compared with a year ago to $1.718 trillion.  The Equifax report also noted that while 46% of consumers were decreasing their debt, 37% were borrowing more.

 

 

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Sources: Bloomberg; Investment Executive; advisor.ca;