HIGHLIGHTS OF THE WEEK – June 18
United States
- Stock markets remained volatile throughout the week, as policy concerns over the Bank of Japan and Fed’s actions outweighed reasonably constructive macro data.
- Reinforced by improved consumer confidence and brisk auto sales, retail sales surprised on the upside, helping to brighten the mood, at least temporarily, on the Wall Street.
- Improved sales also boosted confidence among small and medium businesses, with the NFIB confidence index increasing to a cyclical high. This new bout of optimism suggests that the economy continues to make headway despite the significant fiscal restraint.
Canada
- The economic and financial backdrop have been sending mixed signals to investors in recent weeks. While the economic backdrop has been mostly positive, financial markets have reacted unevenly.
- Manufacturing shipments data released this week indicated the worst monthly decline in sales in May since August 2009. Meanwhile, new home construction surprised on the upside, rising above 200,000 units in May. This complements last week’s employment data which indicated the largest net job gain in more than a decade.
- Meanwhile, equity and bond markets in both Canada and the U.S. have recorded selloffs over the past few weeks. These moves are mainly a reaction to uncertainty regarding central bank actions. Recent communications from the Federal Reserve regarding its upcoming exit from quantitative easing and intensifying concerns regarding the efficacy of the Bank of Japan’s actions are creating unease among financial market participants.
For further information, please contact:
John Maveety Manager, Residential Mortgages – Greater Ottawa Area
TD Canada Trust T: (613) 371-1984 F: (888) 899-1984 P: (866) 767-5446