Stock markets lose ground
March 24, 2016
Canada’s S&P/TSX Composite index moved lower before the Good Friday holiday as investor activity slowed in the wake of recent strong advances from lows earlier this year. Weaker commodities prices also put pressure on Canadian shares. Oil fell as a result of record inventories in the U.S. and a strengthening U.S. dollar.
Canada’s Liberal government ramped up planned spending on infrastructure to boost the economy as its first budget plotted a path of expected deficits over the next five years. The budget promised to deliver $60 billion in new funding, mainly for transportation and energy systems.
Wall Street’s S&P 500 was down as U.S. investors appeared to be consolidating recent gains. The decline in oil pressured the energy sector and comments by Federal Reserve officials raised the possibility of a sooner-than-expected central bank interest rate hike. In addition to light trading, stock market volatility has eased. The CBOE Volatility Index (VIX), often referred to as the “investor fear gauge,” fell to its lowest levels since August.
Most European equity markets underperformed their North American counterparts, hurt by falling commodity prices and speculation about Fed interest rate policy. Asia was mixed, although the key markets of Japan and China advanced.
In other news this week:
?The rally in the U.S. dollar against other currencies sent gold prices lower and put pressure on the Canadian dollar.
?U.S. sales of previously owned homes fell sharply in February. Analysts blamed tight inventories and problems processing data during a leap month. New home sales rebounded and January's figures were revised upward.
?New orders for durable goods in the U.S. fell 2.8% in February over the previous month, a sign that manufacturing continues to struggle.
What’s ahead next week:
Canada
?GDP, January.
?RBC Manufacturing PMI.
U.S.
?Monthly employment data.
?House sales and prices, construction spending.
?Personal income and consumption.
?Consumer confidence.
?Purchasing managers indexes.