Foreign Markets Trade Higher
Foreign
markets are trading higher Thursday afternoon as U.S. equity markets
continue to be closed.
The Toronto Stock Exchange Index is up
almost 50 points in the session.
As many traders know, typically after a devastating event such as the terrorist attack on Tuesday, the U.S. markets
will most likely fall when they open for trading — on either Friday or Monday.
The initial downdraft the markets will feel will most likely be short-lived.
Looking at current inflow of funds
over the past month, we can see greater inflows of money into government bond
market funds and money market funds. This inflow shows investors’ pessimistic
views on the economy, as Treasury yields continue to drift lower. It should be
noted that these low yields depend on a weak stock market. Should we have an
economic stimulus such as a change in monetary policy, it could reverse the
current market conditions to benefit the equity markets.