July 2012 Market Recap
Global markets got a boost following the July 26 comments made by the European Central Bank’s president Mario Draghi. In his remarks, Mr. Draghi stated that the ECB would “do whatever it takes” to ensure that the Euro remained intact. Investors took this as a sign that the ECB would take immediate simulative action in an effort to shore up the European economies, bidding stock prices higher.
Read MoreJune 2012 Market Recap
After a relatively tame first-quarter, volatility returned to the global equity markets with a vengeance, whipsawing stocks with a ferocity that was reminiscent of 2008. Despite a modest rally in June, the S&P/TSX Composite Index still lost 5.67% on the quarter. Global markets seemed to hold up a little better, with the S&P 500 shedding 1.0% and the MSCI EAFE Index dropping 5.0% during the quarter. Not surprisingly, fixed income fared well, gaining 2.2% as investors flocked to bonds on their safe haven appeal.
Read MoreMay 2012 Market Recap
Whoever said that April was the cruelest month likely didn’t have any money invested in the global equity markets in May. Equity markets were hit particularly hard, with the MSCI EAFE Index dropping by more than 7% during the month. The S&P 500 fell by 6% in U.S. dollar terms, while closer to home, the S&P/TSX Composite Index dropped by 6.1%. Europe was again hit very hard, with the MSCI Europe Index sinking by 12.1% as concerns over the debt crisis continue to mount. This time around, investors focused their attention on Spain, particularly the country’s banks which are in serious trouble since the country’s property bubble burst in 2008. Many banks are on the verge of failure and without a bailout plan will go under, dragging the country with them. In Greece, despite their best efforts, a coalition government could not be formed, forcing the country back to the polls. These events, coupled with the recession that is crippling the region, spurred the selloff.
Read MoreApril 2012 Market Recap
After posting strong gains in the first quarter of the year, equity markets retreated in April as investor concerns over the European debt crisis returned. The MSCI Europe Index dropped by nearly 3% after credit ratings agencies downgraded Spain’s debt with a negative outlook, hinting that further rating cuts may be coming. Spain paid a heavy price for this downgrade with the MSCI Spain Index plummeting by more than 13% in the month.
Read MoreMarch 2012 Market Recap
For the past year, market sentiment has been dominated largely by the debt crisis that continues to boil over in Europe, causing fear and panic among investors. In the first quarter of 2012, this situation was merely simmering, allowing investors to focus on the economic recovery that appears to be well underway in North America.
Sentiment was buoyed by encouraging data in the U.S. showing that the housing market is rebounding, job growth has been encouraging for six months, and consumer confidence remains positive. In Europe, while the economy is showing signs of slowdown, markets rallied strongly on news that the European Central Bank had injected funds into many banks in an effort to help spur economic growth.
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