Well, they got it done, sort of. As I mentioned yesterday, the probability for a short-term deal was high and that is exactly what the US congressional and senate leaders ratified last night. They have until January 15th, 2014 to get a bipartisan budget put together and until February 7th, 2014 to get a new level approved on the debt ceiling. For now however all can get back to work. The fallout however has been a loss of production in the billions over the 16 day period.
Markets in Asia, followed the US overnight rallying as a deal was imminent. Europe on the other hand is following US futures selling off about a half a point as now all eyes are back on the cost of the shutdown and the real economic and earnings news that should drive markets. Moving to real numbers, the Weekly Jobless Claims in the US fell to 358000 from more than 370000 last week.
Gold is up large this morning more than 30.00 to 1317 on the weak dollar as the deal in Washington would suggest more debt, no cuts to spending and no tapering in the near future. Oil is off 1.20 to 101.07 and the loonie is stronger by 0.20 to 97.03 on the US dollar weakness. Bonds are rallying as the taper talk will likely be off the table until sometime in the New Year. The US and Canadian 10 year bonds are yielding 2.61% and 2.56% respectively.
In earnings news, mandate companies Hubbell Inc and Union Pacific both reported earnings that beat estimates and met or exceeded revenue targets.
Lastly, the Prime Minister in Brussels today to try and ink a trade deal with the Euro Union. The news has been back burner while the mess in the US has been playing out. The deal will help both Canada and Europe continue to move goods and services freely between the regions and provide some economic incentive to do so.
|Kenneth A. Dick, BA, CIM, CFP, FCSI
Branch Manager & Portfolio Manager | Independent Wealth Management
Canaccord Genuity Wealth Management