Financial Update: Thursday August 11, 2011
- TSX +89.63 to 12,198.89 (CP)
- The rise was due in large measure to gold stocks which rose as fresh worries about the European debt crisis pushed bullion past the US$1,800 mark for the first time and oil stocks driven higher by surging prices. Despite the positive showing on the TSX, volatility continued to rule the market with the main index down as much as 192 points earlier in the session.
- DOW -519.83 to 10,719.94
- The central problems confronting markets remain: dwindling confidence in political leaders and central bankers to get a grip on the European government debt crisis and a growing conviction that the U.S. is sliding back into recession. This market is not trading on fundamentals, it's trading on fear. Problems in focus were concerns that France could lose its AAA rating on government debt. Some analysts have warned that France — the world's fifth-biggest economy — can't afford to keep bailing out poorer European state
- Dollar -$1.64 to 100.52 USD
- After the U.S. Federal Reserve promised to leave interest rates ultra-low until mid-2013. Investors believe the Fed's stance on rates likely means the Bank of Canada is in no hurry to resume hiking interest rates. Markets had until recently expected that the central bank would start moving on rates this fall.
- Oil +$3.59 to $82.89USD per barrel
- Gold $+41.30 to $1784.30USD per ounce
- Traders looking for safety continued to send bullion prices further into record territory, charging to another new record high close.
The spread (based on the MERIX 5 yr rate published rate of 3.69%) is above the comfort zone at 2.34. The spread based on the quick close of 3.49% is above the comfort zone at 2.14.
