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(August 29, 2008) The U.S. election is just a couple of months away and both sides are girding for battle. Both claim to have the true interests of Americans at heart, but which party might be better for Canadian investors?

Judging by historical returns on the Toronto stock market, the Democrats are clearly the better party for our pocketbooks. Looking back as far as the Eisenhower era, a study by CIBC World Markets found that Canadian stocks earned a mean return of just 3.5% per annum under Republican presidents, but a whopping 13.5% mean return under Democrat commanders-in-chief.

These gains were consistent, and not merely skewed by a couple of great years, the report points out. Meanwhile, the four worst years all came during a Republican presidency.

“There’s certainly no reason based on party track records for Canadians to see Republicans, who have always been the more free-trade, free-market party, as more friendly to the stock market,” writes CIBC World Markets senior economist Avery Shenfeld.

And while Democratic candidate Barack Obama has made repeated references to “fair” trade, rather than “free” trade, Shenfeld says these warnings are aimed largely at Mexico, where low labour standards are seen as an unfair advantage. Lip service has been paid to environmental causes as well, but Shenfeld points out that the U.S. is unlikely to turn its back on oil-sands output, regardless of ecological concerns.

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MFDA seeks extension on personal corporations

(August 29, 2008) The MFDA has asked securities regulators in British Columbia, Ontario, Saskatchewan and Nova Scotia to extend the suspension of Rule 2.4.1, which mandates that firms pay all remuneration “to and in the name of the approved persons” who conduct business under the firm.

The MFDA has been working to craft amendments that would allow approved persons to direct remuneration to non-registered corporations, subject to certain conditions.

The current suspension expires on December 31, 2008, which the MFDA would like to see pushed back to December 31, 2010. So far, the regulatory commissions in Ontario, Saskatchewan and Nova Scotia have suggested that giving the MFDA until March 31, 2010, should prove sufficient.

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Economy grows, slightly

(August 29, 2008) The Canadian economy narrowly avoided slipping into a recession in the second quarter, with real GDP growing at an annualized rate of 0.3%, according to StatsCan. This comes after a 0.8% contraction in the first quarter.

“Although this averts a ‘technical’ recession defined as two consecutive quarters of negative growth, it still registers the weakest two-quarter performance since the last recession in the early 1990s,” writes Michael Gregory, senior economist, BMO Nesbitt Burns.

The economy was propped up by stronger spending by the government and decent consumer activity, while flagging exports and corporate purse-tightening continue to drag on growth.

(08/29/08)