“Your Life Is What Your Thoughts Make It” -Marcus Aurelius



North American stock markets closed lower Friday as France lost its AAA credit rating and traders worried as Greece’s bond swap talks stalled.  Economic data also depressed markets after the U.S. Commerce Department reported the American trade deficit with the rest of the world increased 10.4% to US$47.8 billion in November, the highest level since June. The S&P/TSX composite index closed well off session lows, coming back from a 157-point deficit to lose 43.27 points to 12,231.06 while the TSX Venture Exchange lost 4.47 points to 1,536.03.   The Canadian dollar was also lower despite a strong domestic trade report, down 0.42 of a cent to 97.78 cents US as the greenback strengthened with investors moving into the perceived safety of U.S. Treasuries. The Dow industrials lost 48.96 points to 12,422.06. The Nasdaq fell 14.03 points to 2,710.67 while the S&P 500 index was down 6.41 points to 1,289.09 after France’s finance minister announced that ratings firm Standard & Poor’s has cut its credit rating by a notch to AA.
France’s loss of its AAA rating deals a heavy blow to the eurozone’s ability to fight off its debt crisis. The country is the second-largest contributor to the currency union’s bailout fund and a lower credit rating often results in higher borrowing costs. It’s really mixed news on Europe today–the downgrade is definitely negative,” said Jeff Bradacs, portfolio manager at Manulife Asset Management.  “But borrowing by Italy came in at lower rates than expected and that’s partially driven by European banks getting low funding costs through the ECB and buying the Italian bonds.”  Meanwhile, negotiations between the Greek government and its private creditors on a bond swap deal needed to avoid default appeared stalled  Friday, with representatives of the bondholders saying they had been “paused for reflection.”

The TSX closed at 12231, up 42 points or 0.34% over the past week. YTD the TSX is up 2.31%.

The DOW closed at 12422, up 62 points or 0.50% over the past week.YTD the DOW is up 1.67%.

The S&P closed at 1289, up 11 points or 0.86% over the past week.YTD the S&P is up 2.46%.

The Nasdaq closed at 2711, up 37 points or 1.38% over the past week.YTD the Nasdaq is up 4.07%.

Gold closed at 1639, up 22.00 points or 1.36% over the past week.YTD gold is up 4.73%.

Oil closed at 99.2, down -2.63 points or -2.58% over the past week.YTD oil is up 0.30%.

The CAD/USD closed at 0.9773, up 0.0043 points or 0.44% over the past week.YTD the CAD/USD is down -0.26%

Sources:  Bloomberg, Investor Executive, Manulife Asset Mgt