“A Single Twig Breaks, But The Bundle of Twigs is Strong” -Tecumseh


TSX Up As Energy and Oil Make Gains

The Toronto stock market closed higher Friday as energy and oil stocks advanced. The S&P/TSX composite index gained 64.33 points to 14,843 amid a strong collection of economic data from Canada and the United States. The Canadian dollar was ahead 0.78 of a cent at 88.68 cents US amid better than expected readings on Canadian manufacturing and U.S. retail sales. Statistics Canada says manufacturing sales rose 2.1 per cent to $53 billion in September following a sharp 3.5 per cent drop the previous month. U.S. markets were uneven as retail sales rose 0.3 per cent last month after falling by the same amount in September. Also, the University of Michigan’s consumer sentiment index rose 2.5 points to a reading of 89, the strongest reading since 2007. The Dow Jones industrials gave back 18.05 points to 17,634.74, while the Nasdaq rose 8.4 points to 4,688.54 and the S&P 500 index edged 0.49 of a point higher to 2039.82.

The TSX energy sector was ahead 1.15% as the December crude oil contract on the New York Mercantile Exchange rose $1.61 to US$75.66 a barrel. An imbalance between supply and demand has helped drive crude prices down by about 30 per cent from the highs of the summer when Iraqi oil supplies were threatened by Islamic State insurgents. Many analysts think the dive to the mid-70s won’t last and point to economic fundamentals suggesting oil should be trading around the $90 level.


Ottawa To Run $1.9B Surplus In 2015

Next year’s federal budget surplus will be $1.9 billion, the Finance Department says — $4.5 billion less than expected, thanks in part to the Harper government’s multibillion-dollar cost-cutting proposals for families. The expected surplus, unveiled in the government’s fall fiscal and economic update, is a far cry from the $6.4-billion surplus projected in February’s budget. That’s because of the Conservative government’s recently announced family-friendly tax and benefit initiatives, which will consume an estimated $27 billion from public coffers between 2014-15 and 2019-20. The update, delivered in Toronto by Finance Minister Joe Oliver, says Canada is projected to run a $2.9-billion shortfall this fiscal year, matching the government’s projection in the federal February budget. The document also examines the effect of dropping oil prices on the Canadian economy. Cheaper crude could drain $500 million from Ottawa’s bank account this year and $2.5 billion per year between 2015 to 2019, and cut Canada’s nominal GDP by $3 billion in 2014 and $16 billion annually from 2015 to 2019, it predicts. Nonetheless, the federal government is projecting five straight years of surpluses: $4.3 billion in 2016-17, $5.1 billion in 2017-18, $6.8 billion in 2018-19 and $13.1 billion in 2019-20.


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Sources: Bloomberg; Investment Executive; advisor.ca