“Wealth consists not in having great possessions, but in having few wants” – Epictetus
TSX Marginally Up for The Week
The Toronto Stock Exchange’s S&P/TSX composite index rose on Friday by 68.99 points (0.42 per cent) to finish up at 16,353.46, a gain of 45.28 points (0.28 per cent) for the week. Though modest, the weekly gain put the index back in the right direction after last week’s loss.
Nine of the 10 main sectors posted wins on Friday. Financials and industrials led the way. The Energy sector was weighed down by an oil pullback. A barrel of Crude Oil fell by 38 cents (USD) on Friday to settle at $63.57 USD per barrel, a down-tick of 86 cents for the week (1.33 per cent).
The oil decrease also affected the Loonie, which weakened compared to the Greenback on Friday. As of 3:59pm EST, the Loonie had dropped 0.64 per cent versus the American Dollar, and sat at 80.01 cents USD.
Investors have now set their sights forward to next week’s NAFTA talks. Some analysts feel NAFTA is a risk, and could pull the Loonie down, should NAFTA be abandoned. Said Mark McCormick, North American head of Foreign Exchange Strategy at TD Securities: “The market is really going to have to price in a negative risk premium on the Canadian dollar, driven primarily on the breakup risks of NAFTA”.
Gold retreated from $1,339 USD per ounce to begin the week back to finish at $1,331.10 USD per ounce, shaving off $7.90 USD per ounce (0.59 per cent).
U.S. Markets Advance, Again
Another week, another plateau hit for the Dow Jones Industrial Average (DJIA). This week, it rose above 26,000 for the first time. On Friday, it gained 53.91 points (0.21 per cent) to close at 26,071.72. On the week, the DJIA was up 268.53 points (1.04 per cent).
The S&P 500 hit its own record closing high, gaining 12.27 points (0.44 per cent) on Friday to close out 2,810.30 (up 0.86 per cent for the week).
The NASDAQ also set a record closing high, climbing to 7,336.38 on the back of a 40.33 point, 0.55 per cent, Friday gain. NASDAQ gained 1.04 per cent for the week.
Disagreements between U.S. Senate Democrats and Republicans could lead to a government shutdown. The deadline is midnight Friday night (tonight). Senate Minority Leader Chuck Schumer and U.S. President Donald Trump met to negotiate an end to the impasse on Friday. The potential shutdown had a minor effect on U.S. markets, but these days, it seems nothing can impede their advance.
As Expected, Bank of Canada Raises Key Rate
As widely expected, the Bank of Canada raised its benchmark interest rate on Wednesday morning. As with the previous two rate hikes, this was an increase of 25 basis-points from 1.00 per cent to 1.25 per cent. This makes three rate hikes in a little over six months after the BoC held rates steady at 0.50 per cent for nearly nine years. Strong employment figures were among the main reasons that the BoC felt comfortable enough to enact the rate hike.
Two further rate increases are expected by the end of 2018.
As mentioned last week, the rate rise will affect new home purchasers (who didn’t have rate holds in place) and those who carry credit balances on their Home Equity Lines of Credit, regular lines of credit, or home owners with variable mortgage rates.
Sources: Globe Advisor, Yahoo! Finance