Financial Update - September 27, 2012

Indexes opened in positive territory this morning and have maintained gains despite some sluggish economic data. Both the TSX and S&P500 are looking to snap a five-day losing streak, and with less than two trading days left in September will almost assuredly post their fourth consecutive month of gains. The final tally of US economic growth was revised down to a rather anaemic 1.3% for the second quarter, well short of forecasts. Durable goods orders dropped a whopping 13% in August although the print was dominated by a near goose egg in new orders at Boeing. The figure climbed 1.1% excluding defence and aircraft, reversing the decline from the prior two months. The lone bright spot was initial unemployment claims which fell to 359K last week, close to the lowest levels we’ve seen through this expansion. The TSX is up 37 pts. The Dow is up 18 pts.

The Canadian dollar is up 16 bps to US$1.0167. Bond yields are steady at 1.32% for the 5-year Canada and 1.75% for the ten. Gold is up $14 to US$1768/oz. Oil is up $1.21 to US$91.19/barrel.

Have a great day.

Financial Update - September 25, 2012

North American markets continue to unwind the overbought extremes reached in the wake of the QE3 announcement. Despite the positive start to yesterday’s trading, the session ended with one of the broadest negative tally’s since June. Interesting to note that the Canadian banks have been pillars of strength throughout the pullback over the last week and a half, with the big-six flat to slightly higher over that time. Tensions in Europe are flaring again as anti-austerity protests ramp up in Spain and Greece. Existing home sales in the US climbed slightly in August, while mortgage applications are also climbing amid all-time-low 30-year rates. Interesting article in USA Today about the knock-on effects of the improving trend in US real estate with home improvement sales being a prime example. No better evidence than shares of Home Depot which are breaching highs last seen in 1999. The TSX is down 59 pts. The Dow is down 23 pts.

The Canadian dollar also continues to pull back, falling 34 bps this morning to US$1.0164. Bond yields have declined to 1.33% for the 5-year Canada and 1.77% for the ten. Gold is down $18 to US$1748/oz. Oil is down $1.80 to US$89.52/barrel.

Have a great day.

Financial Update - September 17, 2012

North American markets are taking a breath this morning after last week’s Fed induced frenzy. Just in case you missed it, the Federal Reserve announced a third round of quantitative easing by pledging to buy some $40 billion of mortgage backed securities per month in the open market. They left the policy open- ended, meaning they will continue to ease as long as they see fit, while also extending their expectations of keeping interest rates low until 2015. This sent equities soaring, pushing the S&P500 to its highest level since December 2007 (actually an all time high if dividend reinvestment is included). The breadth of the advance was remarkable with volumes surging and the number of stocks making new 52-week highs jumping to its strongest level since late 2010. There is some question as to whether the move will do anything stimulate the US economy, but there is no question the action is inflationary. This week should be relatively quiet compared to last week’s fireworks with little economic or profit data on tap. Rona shares declined after Lowe’s withdrew its unsolicited offer to purchase the company. Apple shares are a few pennies shy of breaching $700 after first day pre-orders of its new gadget were double the numbers of its last phone. The TSX is down 13 pts. The Dow is down 18 pts.

The Canadian dollar has slipped a little after peaking Thursday, off 9 bps this morning to US$1.0288. Bond yields are also retreating with the 5-year Canada yielding 1.47% and the 10-year 1.95%. Oil is up 30 cents to US$99.30/barrel. Gold is flat at US$1773/oz.

Have a great day.

Financial Update - September 13, 2012

It’s pretty quiet out there this morning as market participants await the Fed’s policy announcement due today. Expectations for a third round of quantitative easing are running high. Jobless claims in the US climbed by 15,000 last week, which was slightly more than forecast. WTI crude oil touched a four month high this morning as concerns over supply disruptions flare in the wake of violent anti-US demonstrations over an amateur movie. Shares of Chevron just hit an all-time high. Apple shares are higher after unveiling its latest iPhone yesterday, which is expected to become the best selling gadget of all-time. The TSX is flat. The Dow is up 28 pts.

The Canadian dollar is up 17 bps to US$1.0257. Bond yields are lower ahead of the Fed announcement with the 5-year Canada yielding 1.41% and the 10-year 1.87%. Gold is up $2 to US$1736/oz. Oil is up a buck to US$98.00/barrel.

Have a great day.

Financial Update - September 11, 2012

The TSX failed to retain yesterday’s early gains, thereby extending its streak of miserable Monday’s in the process. The trend over balance of the week has been much more positive for the last few months, and that trend continues this morning with the major North American benchmarks in positive territory. The Dow just touched a figure not seen since December 2007. There is very little hard data out there this morning so the focus remains the FOMC’s rate decision due Thursday. Short term interest rates in countries such as Spain and Italy continue to slide after last week’s ECB announcement, which has significantly reduced the risk financial disruption in the region. The TSX is up 28 pts. The Dow is up 89 pts.

The Canadian dollar continues to climb along with risk appetite, up another 57 bps to US$1.0287. Bond yields are up a tick to 1.41% for the 5-year Canada and 1.86% for the ten. Oil is up 34 cents to US$96.88/barrel. Gold is up $4 to US$1736/oz.

Have a great day.

Financial Update - September 10, 2012

North American markets are slightly higher this morning, a nice surprise given that the TSX hasn’t experienced a Monday gain since mid-July. That said the overall trend over that period has been nothing but positive with our Canadian benchmark gaining ground in ten of the last fourteen weeks. There is little data on the wires this morning but the market will have its fair share of things to fret about as the week progresses. The German Constitutional Court will rule Wednesday on whether the country is legally able to fund the European Stability Mechanism, although is fully expected to give it the thumbs up. The Greek government will propose another round of contested budget cuts on Friday. Sandwiched in between will be the FOMC’s policy announcement Thursday with the Fed now clearly tilted toward more monetary easing. The TSX is up 15 pts. The Dow is up 16 pts.

The Canadian dollar is trading at a one year high, up a quarter-penny on the day to US$1.0249. Bond yields are flat at 1.42% for the 5-year Canada and 1.86% for the ten. Gold is $7 lower at US$1734/oz. Oil is unchanged at US$96.42/barrel.

Have a great day.

I AM HERE TO FIND THE RIGHT PRODUCT FOR YOU….

I will offer you the widest choice of Financing options as follows

• 1ST , 2ND AND 3RD MORTGAGES
• COMMERCIAL LOAN
• SMALL BUSINESS LOAN
• BUSINESS OPERATING LINE
• CONSTRUCTION LOAN
• PRIVATE LOAN
• EQUIPMENT LEASING   & FINANCING
• INTERNATIONAL FINANCING
• WE OFFER CONSTRUCTION DRAW MORTGAGES


• New Immigrants Welcome
• Bad Credit
• Self Employed
• Open Mortgage
• Pre Approval

Please contact me at 416-895-4321 for your financial needs....

Financial Update - September 06, 2012

The hills are alive with the sound of Outright Monetary Transactions this morning, the nickname applied to the ECB’s now-formally-announced plan to intervene in bond markets in an effort to stem the tide of rising yields in some of Europe’s over-indebted countries. The details were widely leaked over the last few days, with perhaps the only piece of the puzzle officially revealed this morning being no cap on the size of bond purchasing, essentially giving the ECB unlimited firepower. This has bond yields in countries like Spain and Italy plummeting, and stock markets soaring. The S&P500 just hit a fresh four-year high. Economic data out of the US is reinforcing the positive mood as the ISM services sector index expanded faster than forecast in August, while ADP estimated some 200,000 private sector jobs were added last month and unemployment claims dropped to a one month low. The TSX is up 131 pts. The Dow is up 237 pts.

The Loonie is in full flight along with most everything else, up almost a full penny to US$1.0182. Bond yields have jumped to 1.41% for the 5-year Canada and 1.83% for the ten. Oil is up $1.90 to US$97.26/barrel. Gold is up $15 to US$1709/oz.

Have a great day.

Financial Update - September 05, 2012

Yesterday morning’s sell-off didn’t last long as the major averages turned a corner around 9am and finished the day barely below water. Volume has been picking up from the anaemic levels of the last two weeks. There were more advancing issues than declining on the NYSE yesterday despite the small loss. The TSX index is moderately higher this morning with gold shares doing most of the heavy lifting as the metal approaches a five-month high. The ECB is set to announce a sovereign bond-buying program at their policy meeting tomorrow which has Italian and Spanish yields falling anew. The Bank of Canada kept its benchmark rate steady at 1% this morning and maintained its bias toward gradual removal of stimulus as it becomes necessary. The BoC is the only central bank among the G7 not currently leaning toward more monetary easing. The TSX is up 20 pts. The Dow is up 17 pts.

The Canadian dollar lost some of its steam after the rate announcement, falling 55 bps to US$1.0089. Bond yields are flat at 1.31% for the 5-year Canada and 1.74% for the ten. Oil is down 63 cents to US$94.67/barrel. Gold is unchanged at US$1696/oz.

Have a great day.

Bank of Canada holds rate steady as global storm clouds gather

OTTAWA — In the face of mounting economic uncertainty, the Bank of Canada on Wednesday once again left its key lending rate on hold, as expected.
“Global growth prospects are unfolding largely as the bank projected in its July Monetary Policy Report,” the central bank said its statement, “with a widespread slowing of activity across advanced and emerging economies.”
The bank held its trendsetting interest rate at 1%, where it has stood since September 2010.
But as the U.S. Federal Reserve and other global central banks contemplate further rounds of easing, Canada repeated what it has been saying for months – that the time for removing stimulus could be near.
“To the extent that the economic expansion continues and the current excess supply in the economy is gradually absorbed, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate, consistent with achieving the 2% inflation target over the medium term,” the bank said in its announcement, using language identical to its last two rate statements.
“There has been no significant change in the economic backdrop since July, and the bank’s bias is so mild that it can almost be regarded as aspirational rather than any type of commitment,” BMO Capital Markets said in a note ahead of the bank’s announcement.
The central bank’s rate announcement comes after Tuesday night’s election victory by the Parti Québécois, led by Pauline Marois. Still, the separatist party only narrowly defeated Jean Charest’s incumbent Liberals, making another referendum on independence unlikely any time soon.
The vote is also unlikely to affect markets, the Canadian dollar most importantly. The loonie was little changed Wednesday morning.
Bank of Canada governor Mark Carney and his policy advisors made no mention of the election outcome in Wednesday’s rate announcement.
Prime Minister Stephen Harper, in a statement late Tuesday, said Ottawa does not believe “that Quebecers wish to revisit the old constitutional battles of the past.”
“Our government will remain focused on jobs, economic growth and sound management of the economy,” he said. “We believe that economic issues and jobs are also the priorities of the people of Quebec.”
Bigger concerns for Canada remain: The still-unresolved European debt and banking crisis, as well as the weak recovery in the United States and slowing output elsewhere — in particular China, the world’s second largest economy after the U.S.
“The economic expansion in the United States continues at a gradual pace,” the Bank of Canada said in Wednesday’s rate announcement.
“Europe is in recession and its crisis, while contained, remains acute. In China and other major emerging economies, growth is decelerating somewhat more quickly than expected from previously rapid rates.”
Canada’s economy, meanwhile, continues to show modest growth. Gross domestic product rose 1.8% on an annualized basis in the second quarter, in line with the Bank of Canada’s most recent projections.
For the year, the bank expects GDP growth of 2.1%, followed by a 2.3% advance in 2013 and 2.5% in 2014.
Employment growth in Canada has been relatively disappointing, however, as has U.S. labour market. Statistics Canada will report the latest employment numbers for Canada on Friday.
Still, reiterating July’s statement, the bank on Wednesday said that “while global headwinds continue to restrain economic activity, underlying momentum remains at a pace roughly in line with the economy’s production potential.”
European concerns will be front and centre on Thursday, when the European Central Bank issues its monetary policy statement. No change is expected, but the central bank could present its long-awaited plans to buy bonds from Spain and Italy to ease the debt pressure in those countries.
And following its Sept. 12 and 13 meeting, the U.S. Federal Reserve could unveil its latest plan to stimulate that economy, most likely announcing another round of asset purchases.

Financial Update - September 04, 2012

The summer was pretty positive for equity markets with US and Canadian averages climbing in August to post their third consecutive monthly gains. We’re starting the new month with some weakness after US manufacturing activity contracted again while the Chinese manufacturing figure released Friday night was much lower than anticipated. Europe will take centre stage this week with Thursday’s ECB policy meeting. The market is looking for some form of decisive action from the bank, and ECB president Draghi is hinting that buying bonds at the short end of the curve is a likely scenario. This has Spanish and Italian yields dropping. The Bank of Canada will almost assuredly leave rates unchanged in tomorrow’s announcement. BMO Capital Markets has pushed out their forecast for rate increases to late 2013 at the earliest. The TSX is down 27 pts. The Dow is down 84 pts.

The Canadian dollar is down just 6 bps to US$1.0139. Bond yields are a couple of ticks lower at 1.33% for the 5-year Canada and 1.75% for the ten. Gold is up $8 to US$1695/oz. Oil is down a buck to US$95.50/barrel.

Have a great day.

Akila Senthil,AMP

416 895 4321