Economic growth continues to gain traction
Newly released figures showed U.S. domestic product grew at an annual rate of 3.2% in the final quarter of 2010 and by 2.9% over the year. It was the largest yearly increase since 2005. The International Monetary Fund raised its forecast for 2011 global growth slightly to 4.3% and for U.S. growth to 3% from 2.3%.
Heightened consumer spending was the big driver of U.S. growth in the final quarter. And there was more good news as consumer confidence rose in both the U.S. and Canada. This is generally positive for equities because consumers are more likely to loosen their wallets, driving business sales and profits.
Many of the world’s stock markets declined as what appeared to be shaping up to be a good week was stalled on Friday. Positive reaction to economic news and corporate earnings gave way to nervousness over developments in the Arab world. However, Canada’s benchmark index posted a five-day gain.
Emerging markets were particularly hard hit at week’s end as investors fled riskier securities amid social unrest in Egypt and other Arab states.
Wall Street lost ground, but crossed a couple of psychological barriers during the week. The Dow Jones Industrial Average rose above 12000 and the S&P 500 crossed 1300 for the first time since mid-2008, but only in intra-day trading. Both indexes failed to close above those levels, and a weekly loss brought the Dow’s eight-week winning streak to an end. The Canadian market didn’t break through any barriers, but its advance for the week included the best one-day percentage gain in two months.
Corporate profits continue to impress as the earnings season got into full swing in the U.S. About 70% of companies are beating estimates so far. Canadian companies also reported strong earnings. However, companies that disappointed, such as Ford Motor and Amazon.com, were punished by investors.
As expected, the U.S. Federal Reserve held the line on interest rates, indicating rates would likely remain low for some time. The Fed said it would go ahead with the second round of quantitative easing (“QE2”), the economic stimulus program to buy back massive amounts of U.S. treasury assets. Markets welcomed the news that stimulus would continue.
For other news of the week:
http://www.investorsgroup.com/consult/terry.pitz/english/cnf_frameset.asp?pg=/English/prodServices/marketCom/default.shtml
Newly released figures showed U.S. domestic product grew at an annual rate of 3.2% in the final quarter of 2010 and by 2.9% over the year. It was the largest yearly increase since 2005. The International Monetary Fund raised its forecast for 2011 global growth slightly to 4.3% and for U.S. growth to 3% from 2.3%.
Heightened consumer spending was the big driver of U.S. growth in the final quarter. And there was more good news as consumer confidence rose in both the U.S. and Canada. This is generally positive for equities because consumers are more likely to loosen their wallets, driving business sales and profits.
Many of the world’s stock markets declined as what appeared to be shaping up to be a good week was stalled on Friday. Positive reaction to economic news and corporate earnings gave way to nervousness over developments in the Arab world. However, Canada’s benchmark index posted a five-day gain.
Emerging markets were particularly hard hit at week’s end as investors fled riskier securities amid social unrest in Egypt and other Arab states.
Wall Street lost ground, but crossed a couple of psychological barriers during the week. The Dow Jones Industrial Average rose above 12000 and the S&P 500 crossed 1300 for the first time since mid-2008, but only in intra-day trading. Both indexes failed to close above those levels, and a weekly loss brought the Dow’s eight-week winning streak to an end. The Canadian market didn’t break through any barriers, but its advance for the week included the best one-day percentage gain in two months.
Corporate profits continue to impress as the earnings season got into full swing in the U.S. About 70% of companies are beating estimates so far. Canadian companies also reported strong earnings. However, companies that disappointed, such as Ford Motor and Amazon.com, were punished by investors.
As expected, the U.S. Federal Reserve held the line on interest rates, indicating rates would likely remain low for some time. The Fed said it would go ahead with the second round of quantitative easing (“QE2”), the economic stimulus program to buy back massive amounts of U.S. treasury assets. Markets welcomed the news that stimulus would continue.
For other news of the week:
http://www.investorsgroup.com/consult/terry.pitz/english/cnf_frameset.asp?pg=/English/prodServices/marketCom/default.shtml
