Global stocks calmer after a week of volatility set off by doubts about China’s growth
After a week with wild swings in the values of stocks and commodities, oil futures ended up gaining 17 per cent in two days and the TSX was up 3.6 per cent in the same period.
That didn’t wipe out the damage done to the Toronto market in the last 10 days after China’s devaluation of its currency triggered global market turmoil. The TSX is down 5.2 per cent on the year and 2,7 per cent from its level before the Chinese currency crisis began last week.
Investors were cheered by oil’s rapid recovery and bought up Canadian energy stocks, pushing the TSX up 98 points to 13,865 on Friday.
The Dow was down 11 points today at 16,643, but it has recovered its week-ago level after a sharp rise yesterday.
The Dow has lost 6.6 per cent since the beginning of the year and is trading at the same level it was at last October.
The volatility triggered by China’s currency devaluation Aug. 18 lasted more than a week. But North American markets shook off the gloom by Wednesday, with a sharp recovery in the last two days.
TD economist Ksenia Bushmeneva attributed the relative calm in markets later in the week to a statement by New York Fed president William Dudley that prospects of a U.S. rate increase next month have dimmed amid rising concerns about the rest of the world.
West Texas Intermediate (WTI), the most important North American futures contract, finished Friday at $45.43 US a barrel, an increase of 6.7 per cent on the day or $2.87 and reverses the seven-week decline that had taken it below $38.
- Canada’s economy: 5 reasons not to panic
- Students, those approaching retirement more vulnerable to market swings
Brent oil was up $2.62 or 5.5 per cent to $50.18.
WTI at $60 US would improve the outlook for North American oil producers, but it hasn’t been that price since the end of June.
…click on the above link to read the rest of the article…
