TSX vs. NYSE
Toronto Stock Exchange ripped higher as American markets went down big time. Is Canada recession-proof right now? Here are two different opinions:
If the U.S. economy slows, export-driven emerging markets of Asia and Latin America and commodity-based economies such as Australia and Canada could be pressured. (MarketWatch)
On the other hand Yola Edwards, a well-respected experienced technical analyst predicts TSX above 14,300 in 2008 and up to 22,000 in 2009: click for chart. While it may seem pretty outlandish, if you factor in the inflation it very well may happen.
TSE was shifted higher because of gold and crude oil prices extreme gains.
Just do pay your attention to these TSE’s subsectors weights, relatively to the mass of whole index . We can see here the strong correlation between commodity markets and linked subsectors of “casual” stock markets. But i don’t think that there’s the opposite correlation between weakness NYSE market and the strength market in Toronto.
“The price of spot gold reached a 28-year high, lifting the TSX gold subsector 3.6 percent.
Meanwhile, violence in OPEC members Nigeria and Algeria helped boost the price of U.S. crude oil. Energy-sector buyers were also emboldened by firm natural gas futures.
Barrick Gold climbed C$2.57 to C$44.34 and Goldcorp added C$2.18 to C$35.98.
EnCana, Canada’s biggest oil and gas producer and the index’s fourth-biggest member by weight, was up C$1.49 at C$68.99, while Suncor Energy, sixth-biggest on the index, was up C$2.00 at C$109.91. The S&P/TSX composite index GSPTSE was up 86.65 points, or 0.6 percent, at 13,919.71 with the materials group ahead 2.6 percent and energy up 1.6 percent.”
The subprime crisis is so gigantic and has such fundamental and negative issues for the globalized financial sector, so we can’t speak about any recession-proof market in the mature world.
“Banks and other financial institutions pulled in the opposite direction. The sector was down 0.8 percent after logging a modest loss in 2007.”
On the other hand i know and beleive personally that “Market action discounts everything”,
so the prices chart includes all the necessary information for us…
That is exactly the point – TSX is weighted towards commodities, so if commodities go down pressured by the crisis, TSX will go down as well.
OR, it may go up if commodities continue going up in the face of the inflation.
I believe in the efficient markets too, and when everyone is being so pessimistic it must be reflected in the prices already.
Do you do stocks or are you only interested in Forex?