12.09.13: It's a bird, it's a plane, it's the stock market | Financial Post

12.09.13: It's a bird, it's a plane, it's the stock market | Financial Post

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Markets: By the numbers

TSX
13,312.78 +32.06 +0.24%

Dow Jones
16,025.53 +5.33 +0.03%

S&P 500
1,808.37 +3.28 +0.18%

Nasdaq
4,068.75 +6.23 +0.15%

Wow, did you see that? Good news for once begat good news on Friday, as investors took heart that employment reports in both Canada and the United States mean economic growth is moving ahead on its own steam, especially in the U.S., which means the Federal Reserve can start scaling back its US$85-billion a month bond-buying program that has been helping prop up the economy.

The benchmark U.S. indices all posted strong gains, as did the S&P / TSX Composite index, surprising both investors and commentators who are much more accustomed to seeing good news about the economy interpreted as bad news by investors.

Unlike a few short months ago when markets panicked over the idea that the Fed would slowly dial down the life support machine and let the economy beat on its own, investors are now looking for additional reassurances that growth has finally turned the corner after nearly five years, and that companies will continue to churn out profits.

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With a fairly light economic schedule this week, investors are already looking toward the next Federal Open Market Committee that begins on December 17. Thanks to Friday’s strong U.S. employment figures and other recent positive economic numbers, some market-watchers are thinking the Fed may finally begin to taper the amount of stimulus it has been injecting into the economy.

There will also be some attention paid to Washington as Senate and House negotiators face a self-imposed deadline to propose a budget by this Friday that could replace some automatic spending cuts set to begin next month. The deadline is part of an agreement reached by Congress and President Obama in October to end the 16-day partial shutdown of the federal government. Government funding expires Jan. 15 and the debt limit is suspended through Feb. 7.

Beyond that, Canadians will get a better idea behind the Bank of Canada’s thinking after BoC Governor Stephen Poloz speaks in Montreal on Thursday. Before then, there will be several Fed regional presidents speaking on Monday, followed on Wednesday by the U.S. Treasury Budget, U.S. jobless claims and the latest readings on retail sales on Thursday, and U.S. producer prices for November on Friday.

Here’s what to watch for this week:

Monday: In Canada, figures on November housing starts will be released at 8:15 am ET. In the U.S., third-quarter flow of funds data will be released at noon ET.

Tuesday: The Bank of Canada’s quarterly Financial System Review will be released at 10 am ET. In the U.S., the day kicks off early with the NFIB Small Business Economic Trends Survey for November at 7:30 am ET, followed by ICSC Same-Store Sales for the week ended December 7 at 7:45 am ET, and then October wholesale trade figures and job openings and labor turnover survey at 10 am ET. First quarter Manpower surveys for both Canada and the U.S. will also be released.

Wednesday: A quiet day, with only the U.S. Treasury’s November budget figures, to be released at 2 pm ET.

Thursday: Bank of Canada Governor Stephen Poloz speaks to the Canadian Club of Montreal. His remarks will be published on the central bank’s website at 12:50 ET, with a press conference to follow at 2 pm ET. Before then, capacity utilization for the third quarter and October’s new housing price index will be released at 8:30 am ET. In the U.S., initial jobless claims for the week ended December 7 as well as November retail sales and trade price indices will all be released at 8:30 am ET, followed by the third quarter quarterly services survey and October business inventories numbers at 10 am ET.

Friday: New motor vehicle sales for October and third-quarter national accounts figures will be the two Canadian reports on tap for Friday, with both out at 8:30 am ET. In the U.S., November’s producer price index will be released at 8:30 am ET. Friday is also the deadline to move forward with a revised U.S. budget.

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12.09.13: It's a bird, it's a plane, it's the stock market | Financial Post

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