Posted on Wednesday, 3rd June 2009 by admin
As stock markets are going super fast these days and we receive so much information (and we have so little time to process it!), we have decided to give a quick market review at the beginning of each week in order to outline the important information about the economy and the best stock pick for 2009.
Canadian Stock Market
We had a lot of important news last week on the Canadian stock market as the Canadian Banks were giving their result from their latest quarter. We personally think that Canadian Banks could be part of the best performing stocks in 2009. Actually, most Canadian Bank stocks rose by 40% since December 2008. Is it too late to buy them? Well their dividend yield is still around 4 to 5% depending on the stock. This lead us to think, since they are well capitalized, they can keep paying their dividend and that their stock should go up again in order to reach a 3% dividend yield (which would be normal to the Canadian Bank industry).
US Stock Market
The sky is cloudy down south as GM is declaring bankruptcy and hope to do damage control and create a new entity within the next 3 months. The US dollar keeps losing strength in front of other currencies (such as the Canadian Dollar and the Euro) even though the rumors about the US government losing its AAA credit rating. Moody’s and Standard & Poor’s reiterate the perfect credit rating of the US last week. Nonetheless, BRIC countries (Brasil, Russia, India, China) keep selling their US currency in order to trade it for gold (price is rising near 1,000$ / oz).
The good news for Americans is that the consumer confidence index rose and we are expecting citizens to start spending a little bit more. We all hope that the negative effect on employment due to GM and Chrysler won’t affect them too much!
The party is still on with resources
I think of the price of copper which reached a peak last week and the oil barrel that keeps surging out of the dead (was $35) to near $70. Even though it is mostly speculation, the barrel keeps rising and the gas pump still ask for more. Summer is going to be rough on American as their dollar keeps going down and gas keeps increasing. That doesn’t left much cheap destination for vacation!
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June 6th, 2009 at 12:39 pm
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