Today the Toronto Stock Exchange Index (TSX) hit 15,000 points, its highest number ever.

Even though 15,000 is purely a nominal number, skewed heavily by a small number of companies granted heavy weightings by the indexing formula, now is as good a time as any to reflect on the past 10 years.   Read more

According to a new Bloomberg survey, the world wide CreditCrunch™ appears to be slowly fading away.

You might be wondering what the heck is this CreditCrunch? There has been a lot written on the subject, but not too much explained at a basic level. So here goes…..

The current issues with credit is that it has become more expensive. What does that mean? Well, essentially it means that the funding of lower credit investments have become more expensive. Why? Because people were afraid of risk and wanted only the safest investments. Treasury Bills (T-Bills).  Read more

Ed Clark, CEO at Toronto Dominion Bank spoke at conference in New York today where he stated that the bank is assuming “dramatically lower” commodity prices in the long run.

If the world financial system is “over-inflating” prices as he put it, then we’re in a bubble. As bubbles don’t last forever, TD Bank is wise to begin planning for lower prices in order to protect itself from future losses.

His remarks are in stark contrast to the bullish predictions by market analysts who see prices going nowhere but up. If the head of a major international bank is weary of current prices, then maybe it’s time for you to review your portfolios…. Or maybe the analysts are right….What do you think? 

This will be a slow week on the economic front, as the only economic data out of Canada today is the release of data on the price of new homes in March. Prices rose 0.2% compared to a month earlier, matching economists’ expectations.

Year over year, new home prices are up 6.1%, a healthy number, although the market is appearing to slow down a bit as the increase this year is slightly lower than last year’s.

Overall this is good news. Continued strong sales in new homes will encourage developers to begin new projects, employing laborers and strengthening the economy. Eventually we’ll meet a point where we’d expect to see a decrease in sale prices as inventories of new homes pass the number of people looking to purchase them. This is normal in a market economy and there is no evidence to suggest the type of collapse that happened south of the border.

Not too many people pay attention to contrarians. They often remind me of the kids in school who ate paste. Sitting in a corner by themselves, ostrasized by their peers. Loners. What you forget is that these kids are often the ones who grow up to do great things. Their minds are complex and cavernous, sparkling with nuggets of information that every investor should pay attention to.

Contrarians are not the ones shouting from atop desks, playing silly sounds and acting like crazed lunatics when discussing the stock of the day. In fact, one could argue that a contrarian is the exact opposite of Jim Cramer. Read more

US Non-Farm payrolls came in at -20,000 jobs for April. The consensus was -80,000, matching the previous numbers for March.

Translation from EconoSpeak™ to regular English: The US economy had fewer layoffs for jobs that don’t involve working on a farm, the government or a private house, for the month of April than those in the towers of Wall Street expected. The data represents 80% of the workforce involved in the economy.

This is different from the job numbers from yesterday, where a private firm announced its research on announced layoffs. Yesterday’s data was far less broad, and focused on only announced cuts and primarily in the financial sector.

What does this all mean?

Well, it’s good that the numbers beat expectations, although this is the longest string of consecutive declines since Feb-June 2003. So there are pluses and minuses. The data will definitely add fuel to the camp who believe that we are near the end of the downturn, and that recovery is on the way. (via U.S. Bureau of Labor Statistics)

“Job cuts announced by U.S. employers increased 27 percent in April from a year earlier, reflecting the crisis in financial markets, according to a report by a private placement firm.

Firing announcements rose to 90,015 last month, the most since September 2006, from 70,672 in April 2007, Chicago-based Challenger, Gray & Christmas Inc. said in a statement today.” (Via Bloomberg)

There is no real surprise here. Financial firms are the hardest hit by the “Credit Crunch™” and have been announcing layoffs for the past few weeks. These jobs are very cyclical and workers are usually aware of the risk as the downside to the high salary.

If we begin seeing big increases in layoffs in core industies like manufacturing and retail, then there will be cause for alarm.

So much for that decoupling theory where Canada would not be affected as much as its American neighbors during this economic downturn. Canada posted a 0.2% negative growth GDP statistic for the month of February. Today, the US announced a small positive gain in GDP for their first quarter. Looks like the old adage that when the US economy sneezes, Canada catches a cold is true this time around.

All is not lost. This data reflects the state of the economy a couple of months ago, and the Bank of Canada has made a couple of big cuts since then. We’ll be keeping a close eye on Canada’s GDP to see if the trend continues, or if February was just a blip.

Breaking News Via Reuters:

-RTRS-U.S. FED CUTS BENCHMARK FED FUNDS RATE 1/4 POINT TO 2 PCT, DISCOUNT RATE 1/4 TO 2.25 PCT
-RTRS-FED SAYS UNCERTAINTY ABOUT INFLATION OUTLOOK REMAINS HIGH
-RTRS-FED SAYS READINGS ON CORE INFLATION SOMEWHAT IMPROVED, BUT ENERGY, COMMODITY PRICES UP
-RTRS-FED SAYS SOME INDICATORS OF INFLATION EXPECTATIONS HAVE RISEN RECENTLY
-RTRS-FED SAYS EXPECTS INFLATION TO MODERATE IN COMING QUARTERS
-RTRS-FED SAYS ENERGY, COMMODITY PRICES TO LEVEL OUT, PRESSURES ON RESOURCE UTILIZATION TO EASE
-RTRS-FED SAYS SUBSTANTIAL EASING OF POLICY, LIQUIDITY MEASURES SHOULD HELP PROMOTE GROWTH, MITIGATE RISKS
-RTRS-FED SAYS RECENT ECONOMIC ACTIVITY REMAINS WEAK, HOUSEHOLD, BUSINESS SPENDING SOFTENED FURTHER
-RTRS-FED SAYS FINANCIAL MARKETS REMAIN UNDER STRESS, TIGHT CREDIT, HOUSING DOWNTURN TO WEIGH ON GROWTH

US Gross Domestic Product grew at an annualized rate of 0.6 percent, beating the median forecast of 0.2 percent for the first quarter.

 The news will do little to sway any decisions at today’s Federal Reserve policy meeting, where it is widely expected that a 25 basis point rate cut will arrive at the 2:15pm announcement.

There is much talk about what qualifies as a recession and whether you can technically have one if growth remains positive. All that is irrelevant. A recession is something that is felt. It is an atmosphere of uncertainty and worry. It is also very personable. You can feel in recession while your neighbor is in boom. Who cares if the GDP is positive/negative or if housing is up or down. All that matters is whether or not you’re stressed about your economic future when you’re laying in bed at night.