Just when you thought it was safe to get back into the pool….
Wednesday’s post-Fed minutes equity rally reversed sharply on Thursday as investors focused again on the outlook for the global economy. ECB (European Central Bank) chief Mario Draghi added fuel to this week’s fire with a warning about the troubled euro zone. Toss in Ebola, ISIS, and Hong Kong protests and there is a lot for markets to think about. Hopefully, with the long weekend in Canada and the US (Columbus Day), markets will have plenty of time figure it all out before Tuesday.
The good news for mortgage borrowers is that bond rates are back down to recent lows thanks to the general dovish tone of the FED. Unfortunately, credit spreads are under pressure given the recent blood bath in equities, but Canada Mortgage Bonds did outperform the rest of the credit spectrum, so we’ve got that going for us.
Fun Thanksgiving fact: Benjamin Franklin preferred the Turkey over the Bald Eagle (“a bird of bad moral character”) as the American national bird.