HIGHLIGHTS OF THE WEEK
• Government budget season took the spotlight over the past week as two fiscal heavyweights announced their plans for the coming years – the federal government and Ontario.
• The federal government delivered a balanced budget as planned heading into an election campaign. It also managed to squeeze in a few new tax and spending measures, despite a more constrained fiscal environment. Meanwhile, Ontario’s budget stayed the course, sticking to last year’s fiscal plan with a return to balance in 2017-18.
• The Canadian dollar did continue to gain ground over the past week as oil prices remained firm. We continue to expect oil prices to see another leg down over the coming weeks, as lower prices are required to balance the currently oversupplied market.
• Overseas developments held the market’s attention this week. The euro zone finance ministers meeting to discuss Greek solvency crisis was heated but fruitless. Meanwhile, renewed airstrikes in Yemen led oil prices to its highest level this year.
• Incoming U.S. economic data was a mixed bag. Existing home sales rebounded strongly in March, while sales of new homes and durable goods orders disappointed. Meanwhile, the below-expectations manufacturing PMI print in the Eurozone and China suggested that the global growth remains subdued.
• Higher oil prices and better-than-expected corporate earnings supported equities. The S&P 500 touched a record high, while the NASDAQ eclipsed its dotcom peak, completing a 15-year long recovery.
Thank you TD Bank for these market insights.