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| Market Watch - February 19, 2010 |
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Inflation inches up; venture capital dries up; and TSX heads higher on commodities Big picture
Inflation inches up; venture capital dries up
Inflation in Canada rose 1.9% in January because of gas prices, which were up 23.9% compared with a year ago. Excluding energy, the Consumer Price Index rose 1.3%, compared with a 0.8% increase in December. The Canadian venture capital market fell to its lowest level in 13 years in 2009, with less capital available to small companies, which traditionally have been vital drivers of jobs in the economy. Wholesale sales increased 0.7% in December, marking the sixth increase in seven months. In the U.S., wholesale prices were up 1.4% due to higher energy costs. Core prices, which exclude energy and food, were up 0.3%.
New jobless claims in the U.S. jumped unexpectedly in the second week of February, reaching 473,000, up from 442,000 the previous week, making the jobless total now 15 million. China’s $300-billion sovereign-wealth fund, China Investment Corp. (CIC), has selected three managers, including Goldman Sachs, to invest $1.5-billion in the private-equity secondary market, where ownership interests in non-publicly owned companies are traded. In the U.K., the government ran a $6.8-billion deficit in January for the first time since 1993, as tax receipts fell nearly 8% versus a year ago.
Markets
TSX heads higher on commodities
Canadian stocks rose for seven straight sessions, boosted by favourable economic data and a rally in commodity prices. U.S. stocks also rose for much of the week, but sentiment turned after the closing bell on Thursday when the Federal Reserve announced it was raising one of its bank lending rates. Credit Suisse increased its price targets for fertilizer as the global agriculture sector improves. Deere & Co. posted quarterly profit that beat expectations and raised its 2010 forecast. Walmart reported 22% profit growth last quarter, with strong international sales offsetting a 2% decline in U.S. sales.
Gold and mining shares fell after the International Monetary Fund said it will sell 191.3 metric tons of gold on the open market. Hewlett-Packard posted better-than-expected results on strong PC and server sales. The U.S. Trade Commission will investigate a complaint by Kodak alleging patent infringement by Research In Motion and Apple in smartphones with digital cameras. Loblaw’s quarterly profit slipped 13.2% as it warned of price deflation and rising competition. Chocolate retailer Laura Secord will come home to Canada after years of foreign ownership after being sold to Quebec-based Nutriart.
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