Market Report - May 29, 2015

This week I want to explain one of the most least understood and underutilized insurance products and should be a part of a comprehensive financial plan.

First I want to explain what the majority of us already have and why you have it.

Everyone knows what life insurance is and most people will have it to cover debt obligations, create income for loved ones left behind or estate tax planning reasons.

Everyone knows what disability insurance is and that it is meant to replace monthly income in the case of injury that keeps you from working.

Everyone knows what commercial insurance is and that it protects us from loss such as fires, hail damage, vehicle accidents ect.

In 1983, there was a new kind of insurance started in South Africa by a

Dr. Marius Barnard who recognized the financial hardship his patients and their families went through when they experienced such things as heart attacks, strokes and cancer, to name the three main things. He came up with a plan that is now used around the world. It is called critical illness protection. Critical illness protection is designed to pay a lump sum should you ever have the misfortune of having one of 23 health problems.

The lump sum is paid out if a person survives 31 days after being diagnosed with one of the 23 conditions. There is one thing that makes critical illness stand out and I think is VERY important. You can design this protection to have all the premiums paid back to you if you do not make a claim in the first 15 years.

On the other hand if you make a claim you can do what you want with the lump sum such as
• Pay for the costs of the care and treatment;
• Pay for recuperation aids;
• Replace any lost income due to a decreasing ability to earn; or even
• Fund for a change in lifestyle.

Stock markets around the world were mostly higher this week. North American markets advanced after trading in a relatively narrow range as investors digested US interest rate developments and economic data.

On Wall Street, the S&P 500 index continued to set fresh records and the Dow Jones Industrial Average hit its first record close in more than two months. Canada’s S&P/TSX advanced in a holiday-shortened week, buoyed by gains in the energy and financials sectors. European markets outperformed those in North America as a softening euro lifted hopes for exporting companies. Asian stocks gained, led by a strong advance in China that was fuelled by hopes for government stimulus to help spur economic growth.

US Federal Reserve Chair Janet Yellen said Friday that the central bank remains ready to raise interest rates this year for the first time since 2006, and gradually thereafter. However, she indicated that a still-healing job market, disappointing economic growth and low inflation call for caution.

Minutes of the Fed’s most recent meeting, released earlier in the week, indicated that an interest rate hike in June is highly unlikely. This contrasts to sentiment at the beginning of the year, when investors believed that a June increase was possible.

Purchasing managers indexes showed signs of sluggishness in the global economy. In Europe, the Markit Composite flash PMI fell slightly, although manufacturing and service sector activity continues to expand. China’s HSBC flash PMI indicated slight contraction in manufacturing. In the US, the Markit manufacturing PMI pointed to continued expansion, although at
a slightly slower pace than the previous month.

Bank of Canada Governor Stephen Poloz said the country’s economy is likely to return to full capacity by the end of 2016, helped by the central bank’s interest rate cut in January.
• Canadian inflation fell to 0.8% y-o-y in April from 1.2% in March. It was the lowest level since October 2013, pushed downward by falling oil prices. US inflation rose slightly in April over March, but fell 0.2% y-o-y. Core inflation rose more than expected.
• Retail sales in Canada rose by a more-than-expected 0.7% in March.

• The Canadian dollar moved lower as the US dollar surged and commodity prices remained volatile.
• Canada saw its first y-o-y increase in jobless claims in five years in March as low oil prices took a toll on Alberta employment.

• The US. housing market continues to send mixed economic signals. Home building rose in April to the highest level since before the last recession, but sales of previously owned homes fell.
• Bank of Canada monetary policy announcement.
• GDP, March.
• Markets closed Monday for national holiday.
• GDP first quarter, second estimate.
• Durable goods orders.
• Consumer confidence indexes.
• House prices, sales.

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