Looking back at the past few years, stats don't prove much...until now, maybe???
I beat the TSX to the end of April with a YTD gain of 5.42%. The first trading day of May produced a small, very small, upward tick. That was the top and then look out! Down she went. By May 20 the TSX had dropped 6.59% for the month! Yup, that nice YTD gain all went away...and then some.
So, what happened in May? The never ending Greece story lead to the bail out by the EU countries lead to devaluation of the Euro lead to fears of further financial crisis in Europe lead to fears of slowing of the financial recovery in North America and elsewhere lead to worldwide market turmoil.
Just as the sub-prime crisis was caused by unscrupulous bankers and traders who first screwed each other and then the governments of the world, the Greek story began with Greece's lying their way in the EU by overstating their GDP and understating the debt and deficit.
So why does this geopolitical crappola have such a disastrous effect on our Canadian market? Good question. Will the TD Bank (TD) make any less in the next quarter than the last? I don't think so! On April 30, TD shares were $75.50...May 20 $70.32 a drop of nearly 7%
By month end both the TSX and TD had staged a modest recovery from the lows of the 20th. The TSX closed May at 11,762. A drop 3.66% for the month. TD shares fared even worse as they closed at $71.75, down 4.96% for the month. That bites!
South of the border, (Bloomberg) reports that the DOW had the worst May since 1940.
Based on yesterday, June isn't looking any better. Fears and doubts about economic recovery sent the markets into a tailspin. The TSX joined the downward slide despite Monday's report that Canadian GDP increase doubled expectations. Yup, the Canadian economy is rockin' and we're still getting caught in the downdraft. Fact is, the TSX is unlikely to stabilize until the there's definitive evidence that the US economic recovery is for real. So goes the world's largest economy, so goes the world....unfortunately.
