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Standard & Poor’s launched the S&P/TSX North American Preferred Stock Index today, which will cover the preferred share market across Canada and the U.S. The Index aims to provide investors with broad diversification and exposure to North American preferred stocks, according to a press release from the company.

“Preferred stocks are attractive to investors in today’s low interest rate environment, due to their higher yields,” said Steve Rive, managing director at S&P Indices. “The S&P/TSX North American Preferred Stock Index will provide investors with a diversified and broadly representative exposure to this important segment of the market.”

Preferred shares combine the characteristics of debt and common stocks, stated the release. Their returns have low correlations with common stock returns and with bond returns, making them good diversifiers. While their expected volatility and returns lie between those of common stocks and bonds, their yields are typically higher than that of common stock, the bond market and the money market.

Investors can probably expect a new ETF based on this index to be launched within the next few days.

– Suzanne Sharma

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CIBC named best consumer internet bank

CIBC was recognized as the Best Consumer Internet Bank in Canada for the third straight year by Global Finance magazine in its 11th annual “World’s Best Internet Banks” competition.

The firm was chosen based on the overall strength of its online banking due to site design, functionality, and success at attracting and serving clients. Site users conduct millions of transactions online every week.

– Suzanne Sharma

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Housing market could hamper growth

Canada’s economy will continue to churn out growth, but the pace is set to slow as the housing market cools and the U.S. economy falters, according to a Statistics Canada report released Thursday.

The agency’s leading economic indicator index — a monthly gauge of where the economy appears headed in the coming months — slowed to a 0.4% increase in July, after a gain of 0.7% in June.

July’s gain is the smallest recorded in 13 months and follows five steady months of increases closer to 1%.

The housing index was down 4.1% from June, continuing a months-long cooling trend in Canada’s once-bustling real estate sector, as many sales were pulled forward into the first part of the year in advance of interest rate hikes, changes to mortgage requirements and the harmonized sales tax in British Columbia and Ontario.

Most of the slowdown in July’s leading economic indicators originated in the household goods sector, where three subsectors fell. None of the seven other components decreased.

The sector, which once led the economy out of recession, is expected to contribute less to Canada’s gross domestic product in the second half of the year, or even become a drag on it.

The slump in home sales was also reflected in falling sales of furniture and durable goods, and consumer spending on household goods is expected to continue to slow in the coming months.

While growth is expected to slow from the unsustainable level recorded in the first quarter of the year, the economy will continue to recover and is expected to record more moderate growth of around 2.5%.

– The Canadian Press

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U.S. deficit seen topping $1.3 trillion

Congress’ budget analysts are estimating that this year’s U.S. deficit will exceed $1.3 trillion, slightly below last year’s total but still a huge ocean of red ink.

The nonpartisan Congressional Budget Office said the enormous shortfall is a result of the still staggering economy, which has meant lower federal revenues plus extra government spending aimed at prodding growth.

But the budget office sees this year as a turnaround. It expects federal revenue to grow slightly and government spending to fall off a bit — both reversals of recent trends.

The analysts also see the deficit falling steadily over the next few years. But that assumes that big tax cuts that will soon expire do not get renewed.

– The Associated Press

(08/19/10)