In the week ending November 25th, 2011, the markets witnessed a heavy sell-off amid growing concerns surrounding the European crisis and poor results in the German bond auction.
Even with news in Canada that retail sales were on the increase and Canada’s federal budget deficit narrowed in September by 36% we saw the S&P/TSX retreat by -3.6% bringing the year to date to -14.7% . For the week the energy and information technology sectors detracted the most with the health care sector being the highest contributor to the loss in the sectors.
Across the border, U.S. equities also declined for the week. The Dow Jones fell by – 4.8% , Nasdaq – 5.1% and the S&P500 retracted by -4.7% brining the year to date to -7.9% . Even with the markets exhibiting considerable volatility the U.S. does still seem to be in recovery as consumer sentiment rose along with consumer spending. This is in line with the rise in personal income. The US economy expanded in the third quarter at a 2.0% annual rate – less than previously reported but expansion none the less.
In Europe with the debt crisis still mounting on fears that the crisis may spread to core Eurozone member states, the DJ Euro Stoxx 50, Germany’s DAX, and France’s CAC all fell, -5.6%,- 5.3% and- 4.7% respectively. Given the mounting concerns and no real consolidated plan for reversal, it is not surprising the markets have reacted this way.
The story is the same in the U.K., Japan and Southeast Asia with all their major indices retreating for the week.- 3.75, -2.6% and -1.5% respectively.
We are continuing to monitor the situation in the Eurozone. Also will be reviewing the real GDP numbers for September for Canada as well as keeping an eye on a few key economic releases from the U.S. (new home sales for October, and Q3 productivity report).
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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