Index Daily Change
S&P/TSX composite index 0.16% Gain
Dow Jones industrial average 0.41% Gain
Standard & Poor’s 500 Index 0.51% Gain
Nasdaq Composite Index 0.88% Gain

The Canadian stock market closed higher yesterday as investor confidence got a boost from a landmark bill to overhaul the U.S. healthcare system (this bill is not unlike the Canadian healthcare system) and strengthening commodity prices turned around resource shares. President Barack Obama’s landmark healthcare overhaul, passed by the U.S. House of Representatives late Sunday, brought relief to investors and sent shares in the U.S. healthcare sector higher, spilling over into Canada. Analysts have raised concerns the bill could hit corporate profits, they said much of the negative impact was priced in after a year of volatile trading on concerns over the burdens from reform. They also noted the bill removed some of the uncertainty that had worried investors.
Initially markets did drop on risk aversion over Greece’s ongoing debt crisis. A rebound by the Euro currency versus the safe-haven U.S. greenback later in the day also helped lift commodity prices, boosting the index’s heavily weighted energy and resource issues. Most commodities are priced in U.S. dollars.
In the United States stocks rose, building on last week’s strength, as the passage of a bill overhauling the healthcare system ended much of the uncertainty about the issue for investors. After initially trading lower, the Dow rebounded to finish at a 17-month high and its 9th gain in 10 days.

Shares of Medicaid insurers, hospital companies and even drug makers rose as many investors concluded that passage of landmark U.S. healthcare legislation will add millions of new paying patients. The S&P Health Care Sector index was up nearly 1%, outpacing the broader market. The overhaul will expand the Medicaid government health plan for the poor and bar insurance practices such as refusing to cover people with pre-existing medical conditions.

This morning stocks look to add to yesterday’s advances by a modest amount. The short to medium term outlook remains positive as overall economic conditions continue to improve but it is unreasonable to expect major upward moves in stock markets as they will continue to face some headwinds. The most notable being sovereign debt which can include local government debt i.e. provincial or state etc….

Regards,

Wilfred Vos Bcs, FMA, CIM, CFP, FCSI, DMS, CBV, MBA, CFA

SVP & Partner