Where is the proverbial light at the end of the tunnel?
Investors have been traveling down the economic train tunnel this year hoping to see a light at the end, but, in fact, have come to the realization that the government’s much touted summer of economic recovery is very much slower than expected. Investors were very concerned about the global economy, which saw a massive stock market sell off, bringing down oil prices. Last week, fund managers and investors seemed to want to get an early start to the Canada Day and Independence Day long weekends, as they took whatever profits they had and headed for the hills. Let’s hope they come back after the holidays or it could be a long dismal summer.
Contributing to this declining confidence, are more concerns that China’s economy was slowing down in April, (based on a key indicator, meaning they will be buying less commodities, including oil). When the world’s biggest importer and exporter takes an economic sabbatical, the markets notice. The U.S. private sector new job index was released last week showing there were only 13,000 new private sector jobs, well below the expected 65,000 for May. In Canada, the Ontario and British Columbia consumers will begin paying more for gasoline, hair cuts, utilities and restaurant meals with the introduction of the HST on July 1. Gasoline users in these provinces will begin paying $4 more for a $50 fill up.
By: Roger McKnight, Senior Petroleum Adivor
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