Markets advance in the face of Egypt concerns
Equity markets around the world advanced this week, as economic optimism and strong corporate profits outweighed concerns over developments in the Middle East.
While civil unrest in Egypt led to volatility, most markets came out ahead. However, investors continued to ponder the potential for disruption of oil supplies owing to the Egypt crisis. This sent Brent crude—the Asian and European oil price benchmark—above US$100, its highest level since the final quarter of 2008.
North American markets were the strongest performers, with European and Asian markets also recording healthy gains. On Wall Street, indexes registered their biggest weekly advances in two months. The Dow Jones Industrial Average closed above 12,000 for the first time since June 2008. The S&P 500 closed above 1,300 for the first time since August 2008.
With more than half of S&P 500 companies already reporting fourth-quarter 2010 earnings, 70% have beaten expectations. The Canadian earnings season, which started later than in the U.S., appears on track for strong results.
The consumer recovery continues. Rising automobile sales point to a rebound in spending. January sales in the U.S. surged 17.3% year over year, while in Canada they climbed 3.6%.
Signs of growing momentum in the U.S. economy surfaced. That’s good news for Canadian companies, since more than 70% of Canadian exports go to the U.S. New claims for unemployment benefits fell, productivity rose and activity in the manufacturing and service sectors increased.
However, U.S. Federal Reserve Chairman Ben Bernanke said Thursday that despite signs of improvement, the economy faces an extended period of high unemployment and low inflation. He also expressed concerns about the country’s large deficit.
Statistics released Friday sent mixed signals about the U.S. job market. The unemployment rate unexpectedly fell to its lowest level since April 2009. However, fewer new workers were hired than expected which can be partially explained by the severe winter weather that occurred in the week the data was collected. In Canada employment growth was higher than anticipated, although the unemployment rate rose marginally.
In other news this week:
Despite the fastest acceleration in euro-zone inflation since late 2008, the European Central Bank held the line on interest rates. The euro fell against the U.S. dollar on concerns about the ECB’s inflation stance.
Along with oil, other commodities rose. Copper prices hit record levels.
U.S. Treasury debt yields rose to eight-month highs on positive economic data. Meanwhile, the Federal Reserve surpassed China as the leading holder of U.S. Treasury securities.
Canadian mergers and acquisitions in January soared to a monthly value of $16.4 billion, according to Bloomberg data.
For a look at the week ahead go to :
http://www.investorsgroup.com/consult/terry.pitz/english/cnf_frameset.asp?pg=/English/prodServices/marketCom/default.shtml
Equity markets around the world advanced this week, as economic optimism and strong corporate profits outweighed concerns over developments in the Middle East.
While civil unrest in Egypt led to volatility, most markets came out ahead. However, investors continued to ponder the potential for disruption of oil supplies owing to the Egypt crisis. This sent Brent crude—the Asian and European oil price benchmark—above US$100, its highest level since the final quarter of 2008.
North American markets were the strongest performers, with European and Asian markets also recording healthy gains. On Wall Street, indexes registered their biggest weekly advances in two months. The Dow Jones Industrial Average closed above 12,000 for the first time since June 2008. The S&P 500 closed above 1,300 for the first time since August 2008.
With more than half of S&P 500 companies already reporting fourth-quarter 2010 earnings, 70% have beaten expectations. The Canadian earnings season, which started later than in the U.S., appears on track for strong results.
The consumer recovery continues. Rising automobile sales point to a rebound in spending. January sales in the U.S. surged 17.3% year over year, while in Canada they climbed 3.6%.
Signs of growing momentum in the U.S. economy surfaced. That’s good news for Canadian companies, since more than 70% of Canadian exports go to the U.S. New claims for unemployment benefits fell, productivity rose and activity in the manufacturing and service sectors increased.
However, U.S. Federal Reserve Chairman Ben Bernanke said Thursday that despite signs of improvement, the economy faces an extended period of high unemployment and low inflation. He also expressed concerns about the country’s large deficit.
Statistics released Friday sent mixed signals about the U.S. job market. The unemployment rate unexpectedly fell to its lowest level since April 2009. However, fewer new workers were hired than expected which can be partially explained by the severe winter weather that occurred in the week the data was collected. In Canada employment growth was higher than anticipated, although the unemployment rate rose marginally.
In other news this week:
Despite the fastest acceleration in euro-zone inflation since late 2008, the European Central Bank held the line on interest rates. The euro fell against the U.S. dollar on concerns about the ECB’s inflation stance.
Along with oil, other commodities rose. Copper prices hit record levels.
U.S. Treasury debt yields rose to eight-month highs on positive economic data. Meanwhile, the Federal Reserve surpassed China as the leading holder of U.S. Treasury securities.
Canadian mergers and acquisitions in January soared to a monthly value of $16.4 billion, according to Bloomberg data.
For a look at the week ahead go to :
http://www.investorsgroup.com/consult/terry.pitz/english/cnf_frameset.asp?pg=/English/prodServices/marketCom/default.shtml
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