“There is a very easy way to return from a casino with a small fortune: go there with a large one” – Jack Yelton

TSX Down for the Week

The Toronto Stock Exchange’s S&P/TSX composite index rose on Friday by 35.21 points (0.22 per cent) and finished at 16,239.22. The financials sector was the lone loser on Friday, as the other nine of 10 main groups ended higher.

On the week, the TSX was down 114.24 points (0.70 per cent), as the Canadian market continues its recent trend of being outpaced by the U.S. markets. It certainly isn’t paying to be overweight in Canadian equities these days.

The Canadian Dollar rose 48 basis-points to sit at 81.25 cents (as at 3:50pm PST) versus the U.S. Dollar, as the Greenback softened.

Oil prices hit three-year highs on Friday, with Brent Crude gaining 10 cents (USD) to finish at $70.83 USD per barrel. Earlier on Friday, it hit $71.28 per barrel before pulling back.

West Texas Intermediate (WTI) jumped 63 cents per barrel to finish at $66.14 USD per barrel.

Gold dropped $14.20 USD an ounce on Friday (down 1.04 per cent), and finished at $1,348.70 USD an ounce.

All Three Major U.S. Indexes Set Record Closing Highs for Friday, and the Week

This week’s close capped the best four-week run for the three main U.S. indexes (NASDAQ, Dow Jones Industrial Average, S&P 500) since 2016. This week’s gains were spurred on by strong earnings reports, along with a softening U.S. dollar, which is benefitting exporters and multinationals.

The Dow Jones Industrial Average (DJIA) gained 223.92 points (0.85%) on Friday to close at 26,616.71, yet another record close. For the week, the DJIA was up 544.99 points (2.09 per cent).

The S&P 500 gained 33.62 points (1.18 per cent) Friday to close at 2,872.87, a gain of 62.5 points (2.23 per cent). Fourth quarter earnings for the S&P 500 has been estimated at 13.2 per cent, with 79.7 per cent of the 133 companies who have reported earnings so far beating expectations.

Finally, the NASDAQ jumped 94.61 points Friday (up 1.28 per cent), to close at 7,505.77, a gain of 169.39 points or 2.31 per cent.

U.S. Treasure Secretary Steven Mnuchin, while in Davos, Switzerland for the 2018 World Economic Forum, took a position opposite to the traditional U.S. position on the Greenback. He stated, “obviously, a weaker dollar is good for us (the U.S.) as it relates to trade and opportunities”.

His comments drove the Greenback to three-year lows on Wednesday. Interestingly, he made this comment only a day after U.S. President Trump – also in Davos for the 2018 WEF – called for a stronger Greenback.

Everyone knows that this growth won’t continue unabated forever; however, those with appropriate U.S. exposure in their portfolios are certainly benefitting in the short run. If you have questions about your portfolio’s allocation, let us know, and we can give you an updated outlook on your portfolio & adjust where necessary.

Weekly Market Wrap-Up

North America
The TSX closed at 16239, down -115 points or -0.70% over the past week. YTD the TSX is up 0.19%
The DOW closed at 26617, up 545 points or 2.09% over the past week. YTD the DOW is up 7.68%
The S&P closed at 2873, up 63 points or 2.24% over the past week. YTD the S&P is up 7.44%
The Nasdaq closed at 7506, up 170 points or 2.32% over the past week. YTD the Nasdaq is up 8.74%
Gold closed at 1349, up -7.00 points or 1.28% over the past week. YTD gold is up 2.98%
Oil closed at 66.24, up 2.71 points or 4.27% over the past week. YTD oil is up 9.63%
The USD/CAD closed at 0.8125, up 0.0126 points or 1.58% over the past week. YTD the USD/CAD is up 2.16%

The MSCI closed at 2234, up 37 points or 1.68% over the past week. YTD the MSCI is up 6.23%
The Euro Stoxx 50 closed at 3647, down -2 points or -0.05% over the past week. YTD the Euro Stoxx 50 is up 4.08%
The FTSE closed at 7666, down -65 points or -0.84% over the past week. YTD the FTSE is down -0.29%
The CAC closed at 5529, up 2 points or 0.04% over the past week. YTD the CAC is up 4.07%
DAX closed at 13340, down -95.00 points or -0.71% over the past week. YTD DAX is up 3.27%
Nikkei closed at 23632, down -176.00 points or -0.74% over the past week. YTD Nikkei is up 3.81%
The Shanghai closed at 3558, up 70.0000 points or 2.01% over the past week. YTD the Shanghai is up 7.59%

Fixed Income

The 10-Yr Bond Yield closed at 2.66, up 0.0200 points or 0.76% over the past week. YTD the 10-Yr Bond is up 10.83%

Sources: Globe Advisor, Dynamic, Reuters, Yahoo! Finance