Recap: Week Ending September 12, 2014

September 14, 2014

Equities across the board closed the week lower as low volatility markets continue across to take shape around the globe. The Dow Jones Industrial Average started the week closing lower Monday and was unable to trade above the that open for the remainder of the week. With this being said, the index trade in a sideways pattern for the remainder of the week, showing little conviction to the downside. A similar situation appeared in the S&P 500 with downside being seen early in the week followed by a lack of movement in either direction. The market appears to be at a standstill for the time being as both the S&P and Dow recently printed all time highs. The volatility which many were expecting to return in September has yet to appear. The lackluster economic calendar last week did not assist in increasing volatility with only one release being of key economic importance. It also seems that markets have not been paying attention to further unrest in the Middle East and looming economic uncertainty in Europe. In years past, markets would been much more active in situations which are currently occurring in the world. The talk of rising rates appears to have also divided the market in two. Both sides of the coin have their valid points and it appears that the US Federal Reserve is still unclear on the timing of their next move. Such a lack of transparency has left the markets with little direction to follow.

The Toronto Stock Exchange Composite Index, TSX, faired much better than its American counter parts, only closing down a fraction of the losses which were seen on US stock exchanges. The TSX is approaching its 50 day simple moving average which is currently below the close from Friday. The last time that the index approached this technical indicator was August 7th when Canadian based stocks saw a bottom in a recent push lower. It appears that the TSX will seek to find support at its 50 day moving average. In order for this to happen the composite index must fall about a percent from its close Friday. Another technical indicator to watch on the TSX is the MACD, Moving Average Convergence Divergence, which is currently bearish, indicating a decline in the price of Canadian stocks. Last time the MACD was negative was also in the beginning of August when the TSX fell roughly 3% before rebounding to make new multiyear highs.

This past week Apple released its news versions of the iPhone which included the introduction of the iPhone 6 and the iPhone 6 Plus. The Plus edition has a 5.5 inch screen, making it the largest phone produced by Apple. The increase in screen size comes as many Android phones are slowly migrating to larger screened devices. To the surprise of many, Apple also released the Apple Pay, which allows iPhone users the ability to use their phone as a method of paying for products in brick and mortar stores. Google offers a similar service called Google Wallet, however, it appears that such a service has yet to gain traction with consumers yet. At the event Apple also released the Apple Watch, which is a device that can be synced to an iPhone giving the user the ability to navigate certain applications on their wrist. It is still unclear about the physical and hardware specifications of the watch as well as an official release date. It must be noted that all products released at the Apple Keynote were Apple’s take on a competitor’s product. It is now clear that Apple is no longer paving the way forward but improving its competitors’ devices.

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