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Weekly market wrap Jan. 19, 2018: U.S. markets defy shutdown threat, charge ahead on solid earnings reports
1/19/2019 4:12:18 PM
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By Fund Library News Wire  | Friday, January 19, 2018


By Mike Keerma

The big North American stock indices racked up gains on the week again, despite an interest rate hike by the Bank of Canada and uncertainty over a U.S. federal government funding bill stalled in the Senate going into the weekend. Bullish sentiment remained strong in the U.S. markets, as 79% of companies reporting quarterly earnings exceeded street estimates. Even a 14.5% weekly plunge in beleaguered Dow Jones Industrial bellwether General Electric Co. (NYSE: GE) wasn’t enough to derail the market momentum train. The buoyant financial and industrial sectors led Toronto’s benchmark S&P/TSX Composite Index to a 0.3% weekly gain, even as weekly losses in both crude oil and gold dampened performance. The big U.S. blue-chip S&P 500 Composite Index closed the week with an advance of 0.9%, while the tech-weighted Nasdaq Composite Index gained 1.0%, as both gauges ended the week at new record high closes.

Last Thursday the Bank of Canada raised its target overnight lending rate by 25 basis points, to 1.25%. In a statement the BoC said, “Recent data have been strong, inflation is close to target, and the economy is operating roughly at capacity.” Even with the unemployment rate of 5.6% considered optimal, with inflation now around the Bank’s target 2% rate, and the economy expected to grow at a 2.2% rate in 2018, the Bank said some monetary accommodation will still be needed, as uncertainty over NAFTA negotiations clouds the economic outlook.

In business news, industrial bellwether General Electric Co. (NYSE: GE) was hit with a US$6.2 billion after-tax charge related to its insurance subsidiary. GE shares have been sinking steadily for more than a year, and CEO John Flannery said last week that the company is “looking aggressively at the best structure or structures for our portfolio to maximize the potential of our businesses,” which is biz-buzzword-speak for considering a break-up of the iconic company.


* Auspice gets rid of some gas. Auspice Capital Advisors Ltd. announced the termination of Canadian Natural Gas Index ETF (TSX: GAS) effective at the close of business on March 23. The Calgary-based fund manager gave no reason for the closure in its release. However, a loss of 34.6% since inception in October 2016 may have something to do with it.

Check Fund Library’s Market Activity page regularly for active updates on key market indexes and commodities.

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© 2018 by Fund Library. All rights reserved. Reproduction in whole or in part by any means without prior written permission is prohibited.

The foregoing is for general information purposes only and is the opinion of the writer. No guarantee of investment performance is made or implied. It is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice.

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