Index Daily Change
S&P/TSX composite index 0.12% Gain
Dow Jones industrial average 0.11% Gain
Standard & Poor’s 500 Index 0.00% Gain
Nasdaq Composite Index 0.26% Gain
The Canadian stock market closed slightly higher yesterday helped by the release of more solid U.S. consumer data. Investor mood was positive following a report from the U.S. Conference Board showing that its consumer confidence index rose to 52.5 in March, recovering about ½ of the nearly 11 points it lost in February. Analysts had been expecting a reading of 50 for March.
Consumer confidence was aided by fewer job losses as the unemployment rate is back below 10% and is no longer at double-digit levels. Stock markets have hit a 1 ½ year high this month, President Barack Obama signed the landmark health-care bill and more homeowner assistance plans have started to be implemented. All this good news was in addition to other data that showed U.S. consumer spending, which accounts for almost ¾ rds of the world’s largest economy, rose for a 5th consecutive month in February by 0.3%.
The energy sector advanced 1.1% as the price of oil rose 20 cents to US$82.37 a barrel. Oil ran ahead more than US$2 a barrel Monday as a weaker American greenback, along with the bullish U.S. economic data, sent crude and metal prices sharply higher. The industrial sector was up 0.54%. The sector rose followed amid news Ontario automakers are driving up production. Honda Canada said Tuesday it will start up a second shift. Just last week, General Motors of Canada said that it would recall some laid-off employees at two of its Ontario plants.
Research In Motion (RIM) was a drag on the market a day before the BlackBerry maker releases its latest earnings results (after the market today).
As 1st quarter winds down (today is the last day), the S&P/TSX Composite Index is up about 2%, with most of that gain coming in the last 6 weeks amid sentiment that economic conditions are improving.
This morning world stock markets are flat although, they are headed for their 4th consecutive quarterly gain. World stocks are up about 2.7% for the 1st quarter. U.S. stock index futures were down 0.14% indicating a softer opening for Wall Street ahead of the monthly ADP Employment report, due out this morning. European stocks are up a little this morning and it’s benchmark is up 3.4% this quarter, also on track for the 4th consecutive quarterly rise.
Stock markets were volatile at the peak of the Greek crisis, but now volumes have fallen again and the new news has dried up. There is no catalyst to really push stocks higher in the short-term. In turn, expect a little profit taking in the short-term. Unless we get some sort of surprise on the macro data front, like with the payrolls this week, the market might move sideways for a bit.
The ADP report is widely seen as a harbinger for the U.S. March non-farm payrolls numbers, which will be released on Friday when most equity markets around the world are closed for Easter Good Friday. The ADP job report is expected to show the private sector created 40,000 jobs in March as the world’s largest economy emerges from recession.
Oil prices gained 0.6% this morning to trade near $83 a barrel and are up 4.4% this quarter, heading for their 5th consecutive quarterly gain as recovering demand outweighs ample supplies and concern over monetary tightening in developed countries (higher interest rates).
Regards,
Wilfred Vos Bcs, FMA, CIM, CFP, FCSI, DMS, CBV, MBA, CFA
SVP & Partner
