As TSX falters, the holiday party continues down south

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MORNING-PLAYBOOK-STORY

The rally continued yesterday in the U.S. with a record-making day, even as new statements from OPEC defending production targets nicked oil prices and soured three straight days of gains for the TSX. Plus, a little reminder that while you were eating cheese and crackers in the office canteen, Google was hosting its holiday party in a snow globe.

The day ahead

A record-breaking day for U.S. markets – with both the Dow Jones and the S&P 500 hitting closing highs – in S&Ps case, the 50th record-breaker this year. The rally continues for the fourth day in the U.S., fuelled by statements from the federal treasury last week pledging to be “patient” with rate hikes forecast for next year.
But in Canada, the rally faltered, as the TSX/S&P Index ended the day down 35 points, as oil weakened once again. European and Asian markets have generally opened up, but have had a fairly subdued day so far.

OPEC comments led to weaker oil prices, after Saudi Arabia’s minister made comments saying the country will defend its market share even against losses in the price. “It is not in the interest of OPEC producers to cut their production, whatever the price is,” said Ali al-Naimi. This morning, West Texas Intermediate is up just slightly, perched above $55 at US$55.92, while Brent is at $60.55.

The loonie weakened yesterday on lower oil prices, ending the day at 85.93 cents

GDP by industry is out today for October from Statistics Canada. In September, real GDP by industry was up 0.4 per cent, and 0.7 per cent in the third quarter, with exports and household expenditures leading the way, and strong housing demand and more investments in plants and equipment in the third quarter. But keep in mind that today’s numbers are for October – when the price of oil was significantly higher.

U.S. real GDP and personal income numbers out today – Amidst signs of a recovering U.S. economy, today will bring more data on how strong the recovery really is. 

 

What you missed

Ontario leads, Alberta drops back – as oil prices undercut the budget of the country’s major oil-producing province. Other provinces have updated their expectation of a surplus, including B.C. But a downward revision of Alberta’s surplus means Ontario will lead the country for growth, despite the largest deficit. Another oil producer, Newfoundland and Labrador, has also bumped its deficit expectations.

Wages remained steady in October, with non-farm payrolls staying about the same from the previous month, in numbers released by Stats Canada yesterday. Weekly earnings were up 2.8 per cent from last year, with growth strongest in retail trade and in Manitoba, while Ontario and Quebec trailed behind.

Is the ruble coming back? Not so fast. The beleaguered Russian currency has strengthened for the third straight day so far today on major interventions from the country’s central bank, but things are still not looking good. Yesterday, there was news of another plan to bail out a Russian bank, as well as statements from a former finance minister that the country is headed for a major economic crisis. 

Party like you work at a tech company. If you were disappointed by your company party’s canapés this year, live vicariously through Silicon Valley. This year, Facebook hosted a World Series-themed party in a San Francisco stadium, Google put employees inside a giant snow globe, and other parties included fake tobogganing hills, a circus, and lighting set-ups that can get up to $80,000 alone, according to Businessweek.