The price of oil just jumped in the past few weeks from its $30 a barrel lows to $41 today Friday March 18 and have taken the equity markets to new highs. Both the TSX and Dow are now in positive territory year-to-date. The Canadian dollars is also up from its 70 cents and flirted with a 77 cents dollar yesterday.
Three main events triggered the recovery from these oversold markets. OPEC agreed on a supply floor, China is doing better than anticipated and the Feds delayed raising interest rates, even hinting that 2 rates hike maybe more in order instead of 4 hikes. This brings hope that the worst may be over and sets the stage for the recovery to continue. Global stocks posted today their longest streak of growth in two years.
Don’t expect too much for returns this year. Growth is very sluggish and any ascent will likely be volatile but we certainly feel more positive for the year ahead.