Quote:
Originally Posted by Alberta Bound
Given the strong performance of the Canadian economy thus far relative to the downturn in the US, I think we are positioned to cruise through this one as a minor bump. I wouldn't be so confident if I was in southern Ontario where some smaller cities are largely dependent on exports of consumer goods to the US but I think the east coast and some western provinces will do just fine.
|
we are on a pretty big down turn on for example
Continuing selloff trashes all the 2007 gains on TSX
Markets Toronto index, Dow hit with triple-digit losses for third straight day
Malcolm Morrison
THE CANADIAN PRESS
Published Friday January 18th, 2008
Appeared on page B1
TORONTO - Canadian stock markets stumbled to another day of big losses Thursday, a third straight session of heavy selloffs that have wiped out all the gains piled up by equity investors in the last year.
Traders dumped commodity stocks on fears of sliding demand for oil and metals in the face of a sharp U.S. economic slowdown. Meanwhile, bank stocks fell as investors wonder when the steady drip of writedowns associated with the American mortgage market will stop.
The Toronto Stock Exchange's key index retreated more than 279 points or 2.1 per cent to nearly 12,796, the third straight day of triple-digit losses. Multibillion-dollar writedowns at U.S. banks from the battered U.S. housing sector and lower oil prices have dragged the TSX down a staggering 837 points or more than six per cent this week alone.
The market has lost 12.5 per cent of its value, or hundreds of billions of dollars, from its record high last fall. The stocks traded on the TSX are currently worth about $1.8 trillion.
The TSX main index is now about 113 points below where it started 2007 and a long way from the near 14,626 record hit last Oct. 30. The losses in recent months have partly offset a five-year run of annual gains that made the TSX one of the best performing stock markets in the world.
On Wall Street, the major U.S. markets also extended their 2008 plunge Thursday, tumbling after a regional Federal Reserve report showed a sharp decline in manufacturing and as investors feared that downgrades of key bond insurers could trigger further trouble with souring debt.
The Dow Jones industrial average lost more than 300 points, giving the index its lowest close since March and its worst three-day per centage decline since October 2002.
"It's not rocket science - the economy is slowing dramatically, and it's being reflected in economic reports," said John O'Donoghue, co-head of equities at the Cowen & Co. brokerage.
Stocks opened higher, but North American investors were quickly dismayed after a regional manufacturing survey came in worse than expected and U.S. Federal Reserve chairman Ben Bernanke said the risks of a U.S. economic downturn are more pronounced.
O'Donoghue observed that if you look back at regional data from the Philadelphia Fed, it takes you back to the 2001 to 2002 U.S. recession.
Meanwhile, the White House announced that President George W. Bush has decided that an economic stimulus package is needed.
Bernanke echoed the sentiment, telling Congress in an economic update that such a plan should be implemented quickly and be temporary so it won't complicate longer-term fiscal challenges.
"In the U.S., I think most people are just hanging their hat on continuing Fed easing and... most people now are expecting a (half point) cut in the Fed funds rate," said Fred Pym, president and chief investment officer of Bissett Investment Management - although he added that lower rates won't be a surefire cure-all for the U.S. economy.
With so much volatility on the stock market, investment advisers say it's time for investors to stay calm, review their investment plan and look to defensive plays such as utilities, health care and consumer stocks to wait out the slowdown.
"Canadian investors looking into this year have to be cognizant of the fact the slowdown is occurring, that credit conditions are not going to improve at a fast rate," said Gareth Watson, associate director of Scotiabank's portfolio advisory group.
"It is going to take at least another six months and for that reason they will have to be patient. We're not going to see the returns that we've seen the last five years."
Prev
But the way you describe the newspaper's spin is very accurate...
Wow
Linear Mode
