Friday Noon Radio

Economic data provided little direction to markets as the U.S. Consumer Price Index, Retail Sales, and University of Michigan Confidence numbers all were released in-line with expectations. The S&P/TSX Composite is flat. Four of the ten sectors are pushing the index lower led by Materials, Energy and Information Technology. In terms of breadth, 133 stocks are up, 91 are down, while 5 are unchanged. The Canadian dollar is trading higher at just over 96 cents to the US.

A recent article in Investment Week by Pacific Investment Management, one of the biggest bond manager in the world, suggests, Deflation is a growing threat to the U.S. economy . They warn that the U.S. is moving closer to deflation and a long period of stagnant growth, much like what happened in Japan in the 1990s. The article warns of striking similarities between the U.S. and Japan and that preparing for deflation is an 'important step' for investors. Deflation occurs when money supply contracts, leading falling prices, asset values and wages.


For some ideas on how to adjust your portfolio should deflation occur, call me at 868-5525 or visit yourlifeyourplan.ca.