August 29th, 2013 Business and Market Update

A bit of a rally yesterday as many went bargain hunting as the day progressed.  Of course the threat of war in the middle east is hovering over markets and as we go into the long weekend caution will be the word for all.

In Asia overnight, markets rallied on the North American rise by about a point.  Euro markets are showing gains at midday of about a quarter point.

In North America, the US futures are pointing higher this morning by about a quarter point on higher Q2 GDP of 2.5% vs. 2.2% estimated.  Also the Weekly Jobless Claims came 6000 less than last week at 331000 which was also better than estimates of 339000.  With the housing rally in the US stalled, the GDP and employment numbers are promising.

Gold is off this morning by  7.00 to 1410, oil is lower by 0.50 to 109.56 on no new news out of the middle east, the loonie is lower by 18 bps to 95.15 and the 10 year yields are up in both Canada and the US to 2.67% and 2.82% respectively.

The last of the three big banks reported this morning and all beat estimates on earnings and matched revenue expectations.  Both TD and RBC increased dividends while CIBC will buy back up to 8 million shares over the coming year.  All suggested that margin compression will continue through the balance of fiscal 2013 and 2014 and there has been some slowdown mortgage applications in the last quarter.  The profit beat from all came from the wealth management divisions with an average increase of more than 15%.  Wholesale, retail and capital markets saw an average decrease of 10%.  In all, reasonable reports for the banking oligopoly.

Lastly, Verizon is making a bid for 45% of Vodaphone the big Euro cell company which will provide a solid position in that market.  It also suggests that Verizon may have shelved its Canadian plans for the time being, which in turn should help the Telco’s here in Canada.

Kenneth A. Dick, BA, CIM, CFP, FCSI

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

www.glwm.ca

August 27th, 2013 Business & Market Update

Some good news out of Europe this morning as German Manufacturing increased to the highest level in 16 months indicating that the economy in the region is continuing to improve.  However the systemic risk of the Syrian crisis is front and centre today as all of the West and many other nations are continuing to make accusations as to the use of chemical weapons and with the accusations threats of retaliation from the US, the UK and NATO en masse have been causing markets world wide to fall

Asia was off about three quarters of a point overnight, Euro markets are down about 1.5% US futures are off about a point and Canada is down about a third of a point.

Oil has rallied on the news up over $2.00 to 108.01 which is what is causing the Canadian markets to see moderate losses only. Gold is also rallying on the news up over 26.00 to 1419 as are bonds with money moving back into the safe haven of US Treasuries.  The loonie is down a quarter cent to 94.94.

Both BMO and BNS came with earnings this morning and both beat estimates and matched, for the most part, on revenues.  BMO’s numbers were interesting and I would suggest the beat was not as big as indicated mostly due to the loan loss provisions that were hard to determine for the quarter.  Unlike BNS, BMO did not increase their dividend.  In all a respectable quarter from both institutions however caution remains going forward.

Lastly, home ownership in Canada continues to be a priority for most however ownership continues to be difficult for many as prices are putting many out of the market.  RBC released a report yesterday that suggests many have been priced out of the market and are concerned with the level of debt that they need to take on to purchase a home.  This in my view is a positive development and over time will cause a correction in prices as demand continues to decline to more moderate levels.  Many are starting to realize that while mortgage rates are low and accessible that same dynamic is what continues to push prices higher. Also, the Case Shiller US home price index rose 12.1% year over year through the end of July, which confirms the continued recovery in the US housing market.

Kenneth A. Dick, BA, CIM, CFP, FCSI

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

www.glwm.ca

August 20th, 2013 Business & Market Update

Overnight in Asia, markets were off more than 2% on the declines in North America and continued concerns over the situation in the middle east and the Fed minutes release later today.

Europe is off about 1% at midday for the same reasons.

The North American futures however are pointing higher with the US up about a third of a point and Canada just slightly positive.

Gold is up about 4.00 to 1370, oil is lower by 0.90 to 105.96 and the loonie is off half a cent at 96.19.

Bonds are rallying today with 10 year yields in Canada at 2.68% and in the US at 2.83%.  My analysis on the fixed income markets going forward has been completed and I will be implementing the changes before the end of the month.

Lastly, for those that may have forgot , the US Debt Ceiling limit that was extended to September 30th from May is looming and will once again need to be raised.  I do believe it will happen, however the bond buying that the Fed continues to do will have to be pulled back at some point to reduce the continuing escalation of the cumulative debt.  Also, Obama care is at the point of implementation and it will also cause the public debt to increase along with taxes.  With that said, there will also be some great opportunities in the health care area as more are able to utilize services they could not before.

Kenneth A. Dick, BA, CIM, CFP, FCSI

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

www.glwm.ca