XPost: can.politics, can.taxes, can.general 
 XPost: soc.culture.canada, can.atlantic.general 
 From: none@none.com 
  
 TSX up 9%, Dow up 26% in stellar 2013 for stocks. 
  
 Easy money and improving economies boost stock prices, with more to 
 come in 2014 
  
 Dec 31, 2013 
  
  
 Easy monetary policies and an improving U.S. and EU economic outlook 
 mean that 2013 has been a great year for equity investors. 
  
 As the year comes to an end, the Toronto Stock Exchange is up nine per 
 cent since the beginning of the year, with Air Canada the stellar 
 performer at $7.48 per share, after hitting a 52-week low of $1.70. 
  
 Gold stocks, a major component of the TSX, have been the main 
 underperformer this year, with the gold index down almost 50 per cent 
 for the year.    After rising in price for more than a decade, gold is 
 now at $1,202 an ounce, down 28 per cent this year, the worst drop 
 since 1981. 
  
 The TSX base metals component has fallen about 28 per cent, so the 
 index is being pulled down by mining and energy stocks. 
  
  
 But some traders expect a recovery in the commodities sectors. 
  
 "I think commodities will outperform next year," said Marcus Xu, a 
 portfolio manager at MY Capital Management in Vancouver. 
  
 Canadian bank stocks have done well, with Royal Bank and TD up more 
 than 10 per cent on the year, while BMO was up eight per cent and CIBC 
 up 5.5 per cent. All reported strong earnings in 2013. 
  
 On Tuesday, the TSX closed up 40 points at 13,621. 
  
 Soaring U.S. stock prices 
  
 The gain in U.S. stocks was much steeper, with the S&P 500 up 29 per 
 cent on the year, led by tech darlings such as Tesla, Twitter, Best Buy 
 and Netflix. 
  
  
 The Dow Jones average has been breaking records in recent months, and 
 is up 26 per cent for 2013. It continued its gains Tuesday, rising 72 
 points to close at 16,576. 
  
 The U.S. economy appears to be in recovery, with the Fed beginning its 
 long-anticipated tapering in January. It made a surprise announcement 
 in December that it would begin buying $75 billion US  of U.S. bonds 
 per month, down from $85 billion. 
  
 Manufacturing orders are up and unemployment is down in the U.S. The 
 stock market was also buoyed by a resolution of the budget impasse, 
 which had threatened to overshadow the economy in January. 
  
 U.S. corporate earnings rose for a fourth straight year. Total earnings 
 for S&P 500 companies in 2013 are forecast to increase 5.37 per cent, 
 to a record $109.03 a share, according to data from S&P Capital IQ. 
  
 "It's tough to argue that companies are in anything other than good 
 health," says Paul Atkinson, head of North American equities at 
 Aberdeen Asset Management, a global fund management company. 
  
 Loonie down 6.4 per cent 
  
 The Canadian dollar closed the year down 6.4 per cent against the U.S. 
 dollar, and it looks to remain below parity in the near future. The 
 loonie rose 0.04 of a cent to close at 94.02 cents U.S. on Tuesday. 
  
 Declining commodity prices contributed to the loonie's fall, but the 
 biggest pressure point was the Bank of Canada's outlook. 
  
 "Most importantly, the view on the Bank of Canada changed, as we came 
 into this year expecting the BoC to hike rates at some point," observed 
 said David Watt, chief economist at HSBC Bank of Canada. 
  
 "Instead, the Bank of Canada stepped back from its tightening bias and 
 removed its tightening bias and now the discussion is actually whether 
 the Bank of Canada might cut rates." 
  
 Other markets around the world are at six-year highs: 
  
 Japan€s Nikkei index is up  56.7 per cent. 
 London€s FTSE is up 14 per cent. 
 Frankfurt€s DAX is up 23.9 per cent. 
 Hong Kong€s Hang Seng Index is up 2.7 per cent, dragged down by its 
 mainland-related stocks. 
 There was considerable gloom over Chinese stocks, despite signs that 
 the Chinese economy may strengthen. The benchmark Shanghai Composite 
 Index ended 2013 on a low note on Tuesday, closing at 2,115.98 points, 
 a decline of 6.75 per cent from a year earlier. 
  
 Reuters polls show European stocks are expected to hit new highs in 
 2014, while Chinese, U.S. and other major stock markets are also 
 forecast to post solid gains. 
  
 "There is almost a complacency about next year and how well it could 
 go," said Hans Peterson, head of asset allocation at SEB investment 
 management in the Netherlands. 
  
 "There is still abundant liquidity even if the Fed started to taper and 
 that is still the main theme ... Everything looks nice and easy right 
 now." 
  
 Bonds aren't such a pretty picture. The yield on the 10-year U.S. 
 Treasury note climbed from 1.76 per cent to as high as 3 per cent in 
 2013 as investors sold bonds in anticipation of the Fed's pullback. 
 The rise in yields and the corresponding decline in bond prices has 
 meant losses for bond investors, prompting them to cut their holdings. 
  
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