Thursday, July 31st14.9°C
22568
22455

U.S. fears to drive markets this week

The looming U.S. fiscal cliff will weigh on markets again this week amid uncertainty that politicians can come together to defuse a potential crisis that threatens to send the U.S. into recession and derail a fragile global economic recovery.

"If there is no indication that a compromise is going to be reached, and that some type of resolution is going to be reached, equity markets as we are witnessing, will pass verdict," said Andrew Pyle, investment adviser at ScotiaMcLeod in Peterborough, Ont.

Investors will also be anxious to see if shoppers' confidence has been shaken as the American retail sector launches the start of the holiday shopping season with many stores opening their doors Thanksgiving night on Thursday.

The TSX has tumbled 3.9 per cent since the election Nov. 6 as worries about a sudden slowing of economic growth would be bad news for a resource heavy market like Toronto's, since a lessening of demand for oil and metals would put pressure on mining and energy stocks.

The Dow industrial average has fallen five per cent as investors worry about higher dividend and capital gains taxes.

The election left the Washington status quo largely in effect, the Democrats control the White House and Senate while Republicans continue to control the House of Representatives.

The outcome left traders lacking confidence that lawmakers can agree on a budget deficit cutting compromise and defuse the expiration of Bush-era tax cuts and the automatic imposition of huge spending cuts. Many economists believe the combination would send the U.S. back into recession.

There was some comfort at the end of the week as congressional leaders expressed confidence a deal could be reached following a Friday meeting with president Barack Obama.

And while many think that American politicians will get a compromise together out of sheer self-survival instincts, it's not surprising that investors aren't waiting around until Dec. 31 to protect themselves, particularly in the U.S. where much higher dividend and capital gains tax hikes are a real possibility.

On the economic front, traders will look to the September reading on Canadian retail sales. Economists looked for Statistics Canada to report sales rose 0.5 per cent during the month following a 0.3 per cent rise in August.

In the U.S., traders hope to see continued signs of an improving housing sector amid lower levels of foreclosures and modest price increases.

Housing starts for October are reckoned to come in at an annualized rate of 840,000, down from 872,000 in September.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX15524.82+78.271
S&P CDNX1011.10-5.40
DJIA16880.36-31.75
Nasdaq4462.902+20.204
S&P 5001970.07+0.12
CDN Dollar0.9164-0.0007
Gold1310.00+6.70
Oil99.19-1.08
Lumber328.70+6.40
Natural Gas3.73-0.017

 
Okanagan Companies
Pacific Safety0.1850.00
Knighthawk0.01-0.005
QHR Technologies Inc1.22+0.02
Cantex0.085+0.02
Anavex Life Sciences0.26-0.0075
Metalex Ventures0.08-0.005
Russel Metals35.22-0.07
Copper Mountain Mining2.83-0.03
Colorado Resources0.22-0.005
ReliaBrand Inc0.10+0.019
Sunrise Resources Ltd0.03-0.005
Mission Ready Services0.15-0.005

 



22704

FEATURED Property
20245172775 Rosedale Avenue
2 bedrooms 1 baths
$205,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Take charge of your debt

Photo: Thinkstock.comWays to reduce your Debt:Make a budget and get budget counselingA basic first step for debt reduction is to prepare a budget and plan your spending. Once you have a budget, you mu...


Geopolitical tensions rattle markets

The Big Picture Geopolitical tensions rattle markets The spectre of rising geopolitical tensions in Ukraine and Gaza cast a shadow over an otherwise positive week in the markets. News that a passenger...


Learn to delegate effectively

Photo: ContributedI have the pleasure of witnessing people delegate tasks quite often. Sometimes with tremendous success and sometimes with disastrous consequences. I have chaired a lot of committees...

_








Member of BC Press Council


22581