“In An Election One Needs Both Hope and Audacity” -Francois Hollande
The Toronto Stock Exchange climbed higher and the Canadian dollar fell Friday as Statistics Canada reported that consumer prices rose last month at the slowest rate in more than three years.
The S&P/TSX composite index rose 105 points 12,613. The loonie fell more than 0.60 cents to 97.30 cents US after the federal agency said Canada’s annual inflation rate dipped six-tenths of a point to 0.4 per cent.
Statistics Canada said there was also an outward decline month-to-month, with prices dropping 0.4 per cent from March, largely due to falling gasoline prices. The Dow Jones industrial futures was ahead by 121 points to 15,34, the S&P 500 index jumped 15 points to 1,666, while the Nasdaq climbed 33 points to 3,498. Meanwhile, gold prices continued to pull back. June gold bullion dropped $31.40 to US$1,355 an ounce, down nearly five per cent this week. On Wednesday, it had closed under $1,400 an ounce for the first time in a month.
Reasons Why China Will Rebound
China’s economy bottomed out over the past six months and as a result, the country is facing a brighter future, says Raymond Chan, chief investment officer of Hamon Investment Group in Hong Kong. “We think growth will continue on a slightly upward bias – plus or minus 8%,” he says. “We don’t [forecast] any dip in the economy like we did last year.” There are several reasons for his optimism. China’s exports are improving (largely driven by a healthier U.S. economy). The rest of Asia is booming and new leadership is targeting reforms. China welcomed new political leaders in March 2013. These officials have been focused on the reforms originally introduced by their predecessors, which includes changes to healthcare, property taxes and the country’s financial sector. “Reforms that have been relatively slow for the last two or three years have to accelerate,” he says. “We think the new leadership won’t — and cannot — wait for another year or two to accelerate reforms.” And that’s good news for foreign investors. The new government is targeting growth at 7.5% for the next five years, adds Chan.
Market Update as of May 17 2013
The TSX closed at 12613, up 24 points or 0.19% over the past week. YTD the TSX is up 0.57%.
The DOW closed at 15354, up 236 points or 1.56% over the past week.YTD the DOW is up 17.17%.
The S&P closed at 1667, up 33 points or 2.02% over the past week.YTD the S&P is up 16.90%.
The Nasdaq closed at 3499, up 62 points or 1.80% over the past week.YTD the Nasdaq is up 13.20%.
Gold closed at 1357, down -89.00 points or -6.15% over the past week.YTD gold is down -19.23%.
Oil closed at 95.98, up 0.11 points or 0.11% over the past week.YTD oil is up 3.68%.
The USD/CAD closed at 1.0278, up 0.0174 points or 1.72% over the past week.YTD the USD/CAD is up 4.07%.
Sources: Bloomberg; Investment Executive; advisor.ca