Canadian and US Market Update

Canada’s S&P/TSX Composite Index is up 4.1% in the last month. Leading the way was Canada’s energy sector which benefited from two major announcements last week. The first was OPEC’s decision to cut production for the first time in 8 years. The planned reduction of 1.2 million barrels per day by January, has contributed to an 11.58% increase in oil prices since the November 30^th announcement. The second big announcement for Canadian energy producers was the approval of Enbridge’s Line 3 and Kinder Morgan’s Trans Mountain expansion which could increase capacity by nearly 1 million barrels per day by 2019.

The US markets have stabilized following the rally after President-Elect Trump’s win. The next major event that everyone will be watching occurs mid-December when the Federal Reserve meets to discuss a rate increase. The markets have begun to price this in as the rate hike seems imminent. Strong growth in the markets, low unemployment (4.9%), and inflation moving up to 2% all point to a rate increase by the Fed.

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