All Green Last Week

It was an ALL GREEN week across North American stock markets last week! Gains were seen across the board with financials and banks leading the way. The TSX was up nearly 2% and the NASDAQ, which is technology-heavy, reached a new high during the week.

The U.S. Federal Reserve held a policy meeting and kept its interest rates steady and at extremely low levels and this decision continues to propel equities upward. Low interest rates do several things – they tend to keep money out of the fixed income and debt markets as investors search for higher returns in equities, they reduce corporate expenses thus increasing profits, and they reduce the cost of borrowing for expansion. Low interest rates are also important when it comes to personal finances since they keep investors away from GICs to fund retirement because very few have enough capital to be able to live on 2%. Low mortgage rates have also kept the housing market moving.

In Canada, Stephen Poloz, the Governor of the Bank of Canada, indicated that interest rate hikes are not imminent since our economy is growing slowly. And in an interesting coincidence, after a volatile week with a drop of 4% on Friday, oil closed at exactly the same price as one year ago.

This week GDP information will be released to indicate the health of the economy in North America with July data coming from Canada and Q2 data being released in the U.S. Also in the U.S., consumer confidence, consumption, and spending data will be released.

Don’t forget that tonight is the first presidential debate, and an expected 100 million viewers will be tuning in.

Have a great week!

Kevin

 

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