Stock markets began February with the same upbeat tone that characterized the first month of 2012. Many world markets are at or near six-month highs this week.
Data released during the week continued to drive investor optimism as the global economic picture improves. Friday’s announcement that the U.S. labour market grew at its most robust pace since the spring cheered markets. The unemployment rate fell to 8.3% in January from 8.5% in December, the lowest since February 2009.
Canada’s S&P/TSX Composite Index reached its highest point since early September with its seventh consecutive weekly gain. On Wall Street, the S&P 500 reached a six-month high. Narrower Wall Street indexes have fared even better. The Dow Jones Industrial Average reached its highest point in almost four years and the technology-focused Nasdaq Composite Index hit an 11-year high.
News was also encouraging in the global manufacturing sector. An index of U.S. manufacturing rose to its highest level since June, China’s factory output expanded slightly instead of contracting as expected and Germany saw its first increase in factory output in four months. There were also positive manufacturing signals from the United Kingdom, Italy and South Korea.
U.S. and global economic developments helped strengthen commodities prices, which contributed to strong performance by stocks in the materials sector in Canada and elsewhere.
However, not all news was positive, with U.S. consumer confidence falling in January and consumer spending having stalled in December. In Canada, gross domestic product fell slightly by an unexpected 0.1%, mainly due to lower oil production. Canadian manufacturing growth slowed in December, although it continues to expand. And while the economy is still creating a small number of jobs, the unemployment rate rose to 7.6% in January from 7.5% the previous month and is at its highest level in nine months.
In Europe, the long-running Greek sovereign debt drama persisted, with hopes for a deal between the country and its private creditors helping fuel global share price gains. However, there was no resolution by week’s end as unions rejected private-sector wage cuts demanded as part of an international bailout plan.
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|
Level | Change | 1-week | YTD | 1-year | 5-year |
| EQUITY INDICES | CAD | CAD | CAD | CAD | ||
|---|---|---|---|---|---|---|
| S&P/TSX | 12,577.28 | + 110.78 | + 0.89% | + 5.20% | - 9.13% | - 0.83% |
| S&P 500 | 1,344.90 | + 28.57 | + 1.33% | + 4.52% | + 3.27% | - 4.88% |
| DJIA | 12,862.23 | + 201.77 | + 0.76% | + 2.89% | + 7.02% | - 3.15% |
| FTSE 100 | 5,901.07 | + 167.62 | + 2.74% | + 5.54% | - 3.08% | - 8.81% |
| CAC 40 | 3,427.92 | + 109.16 | + 2.17% | + 7.50% | - 17.95% | - 12.48% |
| DAX | 6,766.67 | + 254.69 | + 2.79% | + 13.67% | - 9.12% | - 3.52% |
| Nikkei | 8,831.93 | - 9.29 | - 0.72% | + 2.66% | - 9.60% | - 7.76% |
| Hang Seng | 20,756.98 | + 255.31 | + 0.43% | + 10.23% | - 12.44% | - 3.15% |
| CURRENCY RETURNS | CAD | Change | ||||
| US$ | 0.9934 | - 0.0084 | - 0.84% | - 2.73% | + 0.23% | - 3.45% |
| Euro | 1.3058 | - 0.0186 | - 1.41% | - 1.35% | - 3.38% | - 3.18% |
| Yen | 1.2975 | - 0.0087 | - 0.67% | - 2.33% | + 6.86% | + 5.83% |
| CANADIAN TREASURIES | Yield | Change | COMMODITIES | USD | Change | |
| 3-month | 0.89 | + 0.03 | Oil | $97.70 | - $1.86 | |
| 5-year | 1.36 | + 0.04 | Gold | $1,725.75 | - $13.32 | |
| 10-year | 2.02 | + 0.03 | Natural Gas | $2.40 | - $0.18 | |
This Market Commentary is published by Investors Group. It represents the views of our Portfolio Managers, and is provided as a general source of information. It is not intended to provide investment advice or as an endorsement of any investment. Some of the securities mentioned may be owned by Investors Group or its mutual funds, or by portfolios managed by our external advisors. Every effort has been made to ensure that the material contained in the commentary is accurate at the time of publication, however, Investors Group, cannot guarantee the accuracy or the completeness of such material and accepts no responsibility for any loss arising from any use of or reliance on the information contained herein.
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© Copyright 2012 Investors Group Inc.