U.S. soars, while the rest of the world stumbles

Your financial and economic news for December 8



It was an underwhelming finish on Friday for Canada, as markets dipped on an uptick in the unemployment rate and lower than expected profits for banks. But to the South, last week was a blockbuster, and the holiday cheer might just continue this week. At home this week, there’s plenty to look forward to, from housing numbers to the Bank of Canada’s financial systems review.


The day ahead

Oil is still falling this morning – in fact, it’s reached another five-year low, with Brent down to around US$68 and West Texas Intermediate down to around $65. While this means discounts at the pump, it’s also a good time to stock up on holiday think pieces about how oil’s fall is affecting the Canadian economy, climate talks in Peru, and Putin’s popularity.

The loonie fell slightly on Friday, ending the week at 87.47, on uninspiring jobs numbers from Statistics Canada: 10,700 jobs were lost in November, and unemployment ticked up to 6.6 per cent – although some temperance may be needed. The Globe pointed out that the change is actually so small, it’s statistically insignificant. Meanwhile, the U.S. dollar is at it’s highest in more than five years – and could be heading for its highest close in eight.
Meanwhile, other currencies are weakening, and this morning the euro slipped to a two-year low after few clear signs on stimulus from the European Central Bank last week.

The TSX stayed level on Friday: The exchange made no gains on the last day of the week, following a big drop on Thursday, due to lagging jobs numbers and some underwhelming profits for Canada’s big banks in the fourth quarter. Markets rose steadily in the U.S. on Friday, but in Europe, high closes in New York didn’t balance out news of slowing growth in Japan and China – European markets are down this morning.

Canadian housing starts will be released this morning, giving an indication of the health of the country’s housing market. Analysts expect that numbers will go up for November, a result of low interest rates and, overall, decent labour numbers. But the numbers may gain significance, as the Bank of Canada has warned about levels of household debt, warnings that may continue in Wednesday’s semi-annual financial systems review. Around this time, it’s always fun to speculate about a Canadian housing bubble – and review Canada’s addiction to household debt, in 11 charts.

This week will bring the financial systems review by the Bank of Canada, released on Wednesday, and on Thursday, agreement on extending funding for the American government. Let’s hope it avoids a repeat of last year’s calamitous government shutdown.


Things you missed

Last week saw banks earnings season and jobs numbers – expect the impact of both to be felt this week in Canada. Profits from several banks, including Scotiabank (which released their earnings on Friday) fell below estimates last week – and while banks still made plenty of money, the greater concern is for a rockier 2015.
Jobs numbers from Canada are also weighing, while a major surge in U.S. jobs has given a boost to markets that may outweigh news from Asia.

Japan is doing worse than expected. While forecasts were for Japan’s GDP to increase, one week before a general election, the economy is not looking so hot – in fact, real GDP slipped by 1.9, and there was also a contraction in business spending. But there are a few bright spots: the country’s current account is up on increased exports and a weak yen.

In China, slowing growth and a wacky stock market – Chinese stock markets, particularly the Shanghai composite, continue to hit record highs, even as new numbers this morning indicate the country’s imports have slowed. This morning, the country’s trade surplus was at its highest in at least 14 years – pointing to a slowdown in domestic consumption. So what’s pushing the wild ride on the Chinese stock market? U.S. jobs numbers might help, but with data showing a slowing China over and over again, the culprit is more likely a massive surge in retail investors getting in on the market.

Ireland up, Italy down – on Friday, S&P upgraded Ireland up one rating, while knocking Italy down a rating. The country is now resting just above junk status, at bbb-.

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U.S. soars, while the rest of the world stumbles

  1. Obama has done a good job. Whether Americans appreciate that or not is another matter.

  2. (CNSNews.com) – The total federal debt of the U.S. government has now increased more than $7 trillion during the slightly more than five and a half years Barack Obama has been president.

    That is more than the debt increased under all U.S. presidents from George Washington through Bill Clinton combined, and it is more debt than was accumulated in the first 227 years of this nation’s existence–from 1776 through 2003.

      • Oh I see. The debt does, but the GDP doesn’t?

        Be serious BB.

        • The government incurs national debt.

          Gross domestic product, GDP, is defined as the total value of all goods and services produced within that territory during a given year. GDP is designed to measure the market value of production that flows through the economy.

          • Golly, really?

            Then who do you think incurs the debt?

          • (CNSNews.com) – The total federal debt of the U.S. government has now increased more than $7 trillion during the slightly more than five and a half years Barack Obama has been president.

            What part of that are you having difficulty comprehending?

          • The govt is responsible for both the debt and the GDP…..for the entire economy in fact.

            Obama inherited a near collapse…he fixed it.

            He’s been governing while black.

          • And the ‘half and half’ is what concerns you, I’m sure.

    • Ahhh BB’s patented Gutenberg sidestep….which has nothing to do with anything.

      Pick another topic BB….you lost this one.

      • If clues were shoes you’d be barefoot.

          • Go back to Somalia

        • I’m sure that comment has some deep meaning to you, but it doesn’t to me.

          • No meaning to you when you spoke so glowingly about the place?

            For me, I think it’s a cesspool.

        • Ahh well it’s your choice of political system, not mine.

          No taxes, no gun registry, men in charge….Somalia is your kind of place, not mine.

          • I repeat, you are brain dead

  3. EPIC FAIL: Now JIMMY CARTER is calling Obama an incompetent loser

    It’s been a disastrous couple of weeks for President Barack Obama. His signature legislation, the Patient Protection and Affordable Care Act, is a slow-motion train wreck. His poll numbers have tanked.

    Now, things have gotten so bad for Obama that former president Jimmy Carter has called President Obama incompetent in the family-friendly pages of Parade magazine.

    “He’s done the best he could under the circumstances,” Carter said of Obama in an interviewed published on Thursday. “His major accomplishment was Obamacare, and the implementation of it now is questionable at best.”


    • LOL yup, yer a big follower of Jimmy Carter I’m sure.

      • You gave trouble grasping irony as well I see.

        Carter used to be the worst president in US history until Obozo came along.

        • LOL you don’t like blacks or Dems….and you don’t understand the first thing about economics either.

          Aren’t your milk and cookies being served now?

          • Emily’s back to projecting sgain.

      • Cater was the worst president in US history until Obozo came along.

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