Interest rates have dropped, which should be supportive of economic growth and improved corporate profitability. I find it surprising that, despite the boost that lower interest rates normally give to bond values, stocks continue to have much better momentum. Whereas summer is usually a dead time for stocks, the last month has been pretty good (+2.33%).

Presently, Chinese stocks (FXI) have huge momentum, pulling up emerging market stocks (XEM), although Canadian large caps (XIU) are still doing reasonably well. Gold producers continue to look really attractive on the TSX.

Market Outlook July 28, 2014

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