Index Daily Change
S&P/TSX composite index 0.36% Drop
Dow Jones industrial average 0.03% Gain
Standard & Poor’s 500 Index 0.45% Gain
Nasdaq Composite Index 0.78% Gain
The Canadian stock market pushed higher yesterday after 2 days of losses, as oil prices firmed and trade data from China helped lift some mining shares. The oil & gas sector climbed 0.9% as crude prices rose on a report that showed a surprise drop in gasoline stocks in the United States. The materials sector, home to miners and fertilizer companies, fell 0.6% as spot gold prices dropped. Some miners were helped by Chinese trade data showing exports and imports grew faster than expected in February, easing concerns that the demand may be softening in the world’s top consumer of base metals.
Stocks did advance but the direction and magnitude did remain a little directionless as investors remain wary about the global economic recovery. On Tuesday, Bank of Nova Scotia, Canada’s 3rd largest bank, capped a stronger-than-expected earnings season for Canadian banks. In turn, stocks typically pause after Canadian banks finish their quarterly reporting period.
In the United States bank and technology shares lifted Wall Street on hopes a revival in business demand will boost corporate profits. Banks’ shares rallied to their highest in 16 months, adding to recent momentum, amid bets an improving economy will stoke loan demand. The Nasdaq rallied for a 5th straight day, helped by data showing U.S. wholesale inventories fell unexpectedly in January and sales hit their highest in more than a year. In short, there is demand in the economy and companies are going to have to build up inventories.
Treasury Secretary Timothy Geithner said that “fundamental reform” of the government’s role in the housing finance market is needed and it will be next year before proposals are ready for Congress. He told a House of Representatives appropriations subcommittee that principles to guide reform of mortgage finance leaders Fannie Mae and Freddie Mac, as well as other government agencies, will be coming soon. “This is a very complicated issue,” he said. “It doesn’t just involve Fannie and Freddie, we want to take a careful look at the entire set of government agencies that act in the housing market now and the set of policies that helped contribute to this terrible crisis.” The government took control of Fannie and Freddie, placing them in conservatorship, in 2008 at the peak of the financial crisis, and it remains unclear what lawmakers want to do with them as they try to reshape housing market finance. Fannie and Freddie have both existed as government-chartered, privately held companies. They control about 50% of the mortgage market in the United States.
The U.S. Senate passed a $149 billion package of jobless aid and tax breaks, as Democrats continued efforts to lower the 9.7% unemployment rate before congressional elections in November. The measure, approved by a vote of 62 to 36, now heads to the House of Representatives, where many Democrats have pushed for more aggressive job-creation measures in the face of the worst U.S. economic downturn since the 1930s. Democrats say job creation is their top priority this year as they head into an election season that could possibly cost them control of Congress. Both chambers have now passed two job-creation bills, but they have yet to resolve their differences and finish legislation that President Barack Obama can sign into law.
Democrats passed an $863 billion stimulus measure last year to battle the recession. That effort created up to 2.1 million jobs, according to the nonpartisan Congressional Budget Office, but the high price tag has prompted a growing voter backlash.
This morning stocks are pointing down by a small margin and there is not a lot of new news hitting the marketing.
Regards,
Wilfred Vos Bcs, FMA, CIM, CFP, FCSI, DMS, CBV, MBA, CFA
SVP & Partner
