Good
news coming out of Canada just days before Canada Day. According to CBC, the
Toronto Stock Exchange closed at an all-time high on Wednesday, breaking the
former record of 15,073 in 2008. About 60% of the shares on the TSX
advanced. The S&P/TSX, which closed at 15,109.25, is offering the second
best returns to investors among the world’s largest markets. Since March of
2009, an estimated $1.5 trillion in value has been restored to Canadian
equities. The TSX is up 11%, being beaten only by India which has advanced 19% in
the world’s 10 biggest markets. Moreover, the approval of the recent Enbridge
Inc. 1,200 km pipeline project could show Canada as potentially opening up
markets for oil producers. Gold led the way for the Index resulting in a 1.77%
gain as August bullion rose $2 to US$1274 an ounce. July copper has been seen
as stagnant, unchanged at US$3.06 a pound.
The
TSX also gained momentum in reaction to comments from the U.S. Fed. Its Chairperson,
Janet Yellen, said that it is the intentions of the U.S to keep its
accommodative rate policy. News out of the U.S. Central Bank details that the
bank plans to reduce its monthly bond buyback program by an additional $10
billion to US$35 billion per month. The current stimulus has accounted for
long-term loans rates to remain low while managing to maintain a promising
economy. We are witnessing a stronger Canadian Dollar, gaining 0.12 of a cent
to US91.17 cents. Meanwhile our neighbours also heard some auspicious news. The
Dow Jones Industrials gained 98.13 points to 16,906.62. The Nasdaq rose 25.61
points to 4,362.84, and the S&P 500 was seen adding 14.99 points to
1,956.98.
This
year, the S&P/TSX has nearly doubled as compared to the S&P 500. We are
already beginning to see a number of international investors being attracted to
the Canadian market hoping for better results. Statistics Canada has reported a
staggering $3.64 billion in shares being brought by investors during April. As
for the future of the TSX, not much can be said in such a volatile game.
According to Sadiq Adatia, Chief Investment Officer at Sun Life Global
Investments Inc., it is not likely that Canadian stocks will rise much
further. “The TSX will have a hard time keeping its gains as the
fundamentals in Canada are not strong. Because they have such high levels of
debt, the Canadian consumer cannot sustain the economy,” Adatia was quoted as
saying. Statistics Canada has claimed that the household debt levels of the
nation have climbed to a record 164.2% of disposable income in Quarter 3 of
last year.
Disclaimer: This article was posted with the permission
of a third-party contributor and the opinions contained therein do not
necessarily reflect those of Smallcappower. Smallcappower does not endorse
any investment advice provided by these third-party contributors. Please
consult your investment advisor before making any investment
decisions.
Ubika
Corporation and its divisions Smallcappower, Ubika Communication and Ubika
Research are not registered with any financial or securities
regulatory authority in Ontario or Canada, and do not provide nor claims
to provide investment advice or recommendations to any visitor of this site or
readers of any content on this site. – See more at: http://www.smallcappower.com/posts/small-cap-power-disclosure
