Weekly Market Strategy

Canadian Equity Strategy
WHAT DOES BEN BERNANKE SEE IN THAT CRYSTAL BALL?

At the beginning of this year we made a number of predictions on our desk. We thought that crude would outperform natural gas and it has. We thought gold would be a good investment for 2007 and it has. We thought the TSX would move higher this year and it has. Considering these predictions you’d think that we would be elated with last week’s Federal Reserve decision to cut interest rates by 50 basis points as it weakened the U.S. dollar, sent commodity prices based in U.S. dollars higher and provided a material lift to North American equity markets. But even days after the decision, the market is still grappling with the fact that we saw a cut of 50 basis points instead of 25. 50 basis points sends a very strong message that the Federal Reserve does not like what the future holds for the U.S. economy. Should we be elated with this decision? Well here are some pros and cons:

Read the full article here:Weekly Market Strategy September 21, 2007 (pdf-220 kb)