Weekly Commentary – Ending 11/18/2011

With escalating concerns in Europe and its spread to bigger economies such as France, Austria and the Netherlands, markets continued to extend their losses. Focus will continue to be on Europe and the data coming out of that area.

The European crisis is not only affecting European markets but impacting North America as well. In Canada the S&P/TSX Composite fell by 3.1%. Canadian stocks declined on lower commodity prices and concerns about contagion from the debt crisis. The Canadian dollar also declined against the US for the week by 1.4%

There is a bit of good news with inflation backing off from 3.2% in September, slightly over the target range of between 1 % and 3%, to slightly under the target range at 2.9%.

US equities also declined for the week. The Dow Jones Index fell 2.9%, the Nasdaq fell by 4.0% and the S&P 500 fell 3.8%, despite a bit of positive economic data; building permits rose by 10.9% from September, jobless claims declined for the week, industrial production rose as well retail sales posting a gain in October. The declines can be attributed to investor concerns over the European debt crisis.

Internationally all major markets posted losses. The DJ Euro Stoxx index lost 3.8% with the concerns of the debt crisis mounting and on the industrial production numbers for September showing a 2.0% decrease. The UK also saw a decline in their market- the FTSE index lost 3.3% on the news of weak unemployment data and investor sentiment declining over European concerns.

Asian markets were not immune to the current situation in Europe with the Japanese Nikkei falling by 1.6%, China’s Shanghai falling by 2.6% and Hong Kong’s Seng lost 3.4%. Most of the declines can be attributed to the concerns surrounding Europe – not fundamental corporate concerns.

We will continue to monitor the situation in Europe and we expect as the markets work through these latest concerns that investors will be rewarded for their patience.

This commentary is published as an information service for clients.  This commentary is not intended to provide, and should not be construed as providing, individual financial, tax or investment advice.  The information contained herein is drawn from sources believed to be reliable, but the accuracy or completeness of the information is not guaranteed.  Opinions expressed herein by the author and third parties may not necessarily reflect those of Craig & Taylor Associates and Insurance Agency Ltd.
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