September 27th, 2013 Business & Market Update

Seeing some weakness in Japan overnight regardless of the fact that inflation accelerated at the fastest pace in September in the past two years.  China was a little stronger on no real news.

Europe is lower trading on the Debt Ceiling impasse, despite economic confidence in the region moving to a 2 year high.  Markets there are off about a quarter point.  Our former BOC leader Mark Carney, now head of the Bank of England suggested that continued positive recovery in the UK would suggest no new stimulus is necessary at this time.  UK markets are off about three quarters of point on the news.

Moving to the US traders continue to square books for the weekend in regard to the Debt Ceiling issue causing futures to decline this morning by about a third of a point.  In my view it is still short term noise that will be dealt with, maybe not over the weekend or on Monday but a solution will come and we will move on.  Opportunities will be apparent based on this short term positioning and we will take advantage of them should they fit into my mandates.  Interestingly, over the past 25 years, the US government has “shut down” 17 times for varying periods and the response once agreement was made was an average increase in capital markets over the next month of around 0.7%.  I have added a piece this morning from our US Strategist, Tony Dwyer to provide some insight into the big picture.  We are also seeing bonds rally this morning as money goes to safe asset with 10 year yields falling to 2.63% in the US and 2.56% in Canada.

The data that I am more interested in is the Employment numbers for September that will be released next Friday.

Canadian markets are following the US lead down about a quarter point.

Gold is higher by 12.00 to 1336 on a weaker US dollar, oil is off slightly to 102.39 and the loonie is virtually flat at 96.9.

Lastly, whether you agree with the Keystone Pipeline or not, I did find it somewhat refreshing to see our Prime Minister call out the US government yesterday suggesting that we would not take no for an answer.  It was a direct shot at the Obama government which in my opinion needs to happen more often, but that’s for another day.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

September 26th, 2013 Business & Markets

A mixed overnight session in Asia as Japan was higher and China lower.  Japan’s economy is improving on the stimulus that Abe continues to provide while in China there are conflicting reports on the state of the economy as two different reports are somewhat contradictory.

Europe is mixed with the macro index off just slightly, despite continued positive news on the recovery in the region.  UK consumer spending was stronger than expected for for August.

US futures are being driven by some positive employment numbers this morning as Weekly Initial Jobless Claims came in 5000 lower than last week at 305000 and 20000 below estimates of 325000.  Continuous claims were at 2.823mm vs. 2.818mm estimated, which is neutral.  The second Q2 GDP revision came in at estimates at 2.5%.  Markets are looking to open up about a quarter point.

Canadian futures are relatively flat this morning with no economic news today with markets continuing to be range bound.

In regard to the Debt Ceiling deadline, I am in the camp that there will be some type of solution by month’s end as the last time the government shut down (in the mid-90’s) is cost GDP about a half a point and a couple of billion dollars to get things restarted.  The global recovery is also a factor as strong economic and political leadership out of the US is paramount in continuing the process.

Gold is down a couple of bucks to 1331, oil is up 0.32 to 102.37 and the loonie is unchanged at 96.96.  The US and Canadian 10 year bonds are trading slightly lower this morning with yields rising to 2.65% and 2.57% respectively.

Lastly, I am seeing some positive indicators that would suggest the 4th quarter could be stronger.  The shipping indices continue to march higher.  Iron Ore (to China) has been increasing for the last 2 quarters out of Brazil and Australia.  Coal and grain shipments have also been moving higher over the last quarter as the dry goods index and the shipbuilding index continue to advance.  We are also seeing Intermodal rail indices over the last few weeks improve dramatically.  Could set up well for a reasonable Q4.  We shall see……

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

September 24th, 2013 Business and Market Update

A quiet overnight in Asia as markets there were weaker by about a quarter point.  China PMI was a stronger yesterday which caused markets to rally initially and profit taking then took over as markets sold off into the close.

In Europe, we are seeing gains with markets up about a half a point mostly on Merkle’s re-election and stronger business confidence numbers out of Germany.  Merkle however did not get a majority (5 seats short) and will have to form a coalition government to get legislation passed which is cause for some concern as the big economy continues to recover.

In the US we are seeing unchanged futures this morning as the focus is on the debt ceiling that must be ratified by the 30th of the month.  The new limit that will take the country through to the end of next year will need to raise from the current $16.7tr level.  Of course both sides of the aisle are at odds on how to limit the cumulative debt.  I am confident a deal will be struck adding a trillion to the current number.  The Case Shiller July Housing numbers were released this morning and were bang on estimates at 12.4% year over year.  Stable is the word I would use to describe sector currently.

TSX 60 futures are a little lower this morning following the US lead.  Of course the big news out of Canada is the bid of $9.00 per share from Fairfax Financial Holdings for Blackberry.  Yes the smart phone maker actually has a bid that has been ratified by the board.  Prem Watsa the CEO of Fairfax and a board member of BB up until the end of last month has a 10% ownership stake in BB.  The bid is smart on many fronts the most important of which is it puts a floor on the shares.  It starts a bidding war (not that I think it will a big fight) but many analysts have already stated that the parts are worth more.  The other thing the bid does is take the company private, which does take an incredible amount of public heat off the stock and may buy the company some time to regroup.  At the end of the day, no matter how it is sliced up, it is a shame this great Canadian story will end with whimper like a few recent others before it.

Gold is down 15.00 to 1312, oil is off 0.67 to 102.05 and the loonie is off slightly to 97.17.  The US and Canadian 10 year bonds are stronger this morning with yields falling to 2.69% and 2.61% respectively.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

September 20th, 2013 Business & Market Update

A relatively quiet day yesterday is leading to another today.  Asia was virtually flat on low volume overnight and Europe is down about a quarter point at midday going into the German elections over the weekend.  Merkle is favoured to be re-elected but by a much slimmer margin that previous according to pollsters.  We will get the results Monday.

US futures are trading a little lower this morning as we head into this quadruple witching expirationFriday.  Volumes should be large today however direction seems to be neutral.

Canadian futures are also flat this morning even with a lower inflation number that came in at estimates.

After a very busy week it would seem that the capital markets are taking a much needed rest today.

Gold after the big move the last two days is selling off today down about 20.00 to 1350.  Oil is down 0.44 to 104.10 and the loonie is off a quarter cent to 97.18.  The ten year US and Canadian bonds are a little stronger this morning with yields falling to 2.75% and 2.71% respectively.

The new iPhones go on sale today around the world and if you can believe it, people are lining up to get one.  I thought all that hype was a thing of the past.  Apparently not!!  I am sure the company would like to have people lining up to buy the stock.  Unfortunately, that is not the case.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

Tuesday, September 17th 2013 Business – Market Update

A quiet morning after a decent up day yesterday. Some selling overnight in Asia and at midday in Europe into the Fed meeting today.  Asia was down about a half a point and Europe is off a quarter point.

The US futures are trading slightly lower on what will be a light day until the minutes of the meeting are released tomorrow which will indicate whether the QE will be tapered.

Canadian futures are slightly lower.

Gold is off 3.00 to 1314, oil is trading down half a buck to 104.25 and the loonie is slightly higher at 96.93.  The US and Canadian 10 year bonds are a little stronger this morning with yields at 2.83% and 2.75% respectively.

German investor confidence once again rose last month, however inflation in the UK was lower.  The region is stabilizing however at a slow pace.

In Canada today is the last day for the telecom companies to submit bids for the available wireless spectrum.  Of course all the big boys are in and Wind Mobile has submitted their deposit to bid.  The small company, it would seem is the governments only current hope for a fourth competitor in the wireless space.  It will be interesting to see how the bids are fair.  More to come.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

September 16th 2013 Business & Market Update

Over the weekend the Syria crisis calmed as the Russians and Americans came to agreement on the rules of engagement in regard to removing the chemical weapons from Syria.  Of course the West is skeptical, however, the aversion of war is a positive one for all involved.

Asia overnight was up marginally on the news.

Europe has moved higher by a point on the news and the fact that Lawrence Summers, the leading replacement for Fed chairman Ben Bernanke has dropped out of the race, leaving the door open for Janet Yellen.  Summers is a proclaimed “hawk” calling for the end of QE and a faster line to increasing interest rates.  Yellen on the other hand is a so called “dove” promoting a more gradual change to monetary policy.  US futures are trending higher on this news up about 1.25%.  The US dollar on the other hand is falling on he news.

Canadian futures are stronger by about a third of a point.

Gold is up 4 bucks to 1312 on the weaker dollar, oil is off on the Syrian news 1.45 to 104.51 and the loonie is stronger by half a cent to 97.15.  The US and Canadian 10 year bonds are rallying on the news this morning with yields falling to 2.79% and 2.69% respectively.

After many delays over the last year, Bombardier is today finally going to test fly the new C-Series jet.  The much anticipated flight should pave the way, if successful, to a strong order book for the mid-distance commuter jet.

Tomorrow and Wednesday the Fed meets to discuss monetary policy with the big decision being to taper now or wait until they meet again in November.  The street is 50/50 on the decision, however it is my view that the tapering decision has already been factored into both the debt and equity markets as it is inevitable to occur.

We are also watching with great interest the debt ceiling deadline that is coming at the end of the month.  The ceiling must be raised again and while it will be done the issue will be can they (the US Congress) get it done efficiently and expediently?  We shall see.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

September 10th, 2013 Business & Market Update

Some encouraging news out of the middle east overnight as it would seem the Russians are suggesting that if all chemical weapons are removed from Syria by a third party a military strike would be avoided.  Both the Syrians and Americans at first brush seem to be in agreement.  Nice to see that politicians are actually trying to come to an agreement rather than continually blowing things up costing lives and countless millions of dollars.

The markets have reacted positively to the news with both of Asia and Europe trading higher by more than 1.5%.  US futures are up half a point and Canadian futures are higher by a quarter point.

On the other side of the page, gold is off by more than $22.00 to 1364, oil is retreating by more than 2% to 107.18 and the loonie is higher by 0.25 cents to 96.68.  The 10 year US and Canadian Bond are selling off causing yields to creep higher to 2.94% and 2.79% respectively.

Apple is hosting a big press conference today to announce new product launch’s which many wondering what the next direction is for the big tech company.

Visa , Nike and JP Morgan are being added to the Dow 30 Index today and Bank of America, Alcoa and Hewlett Packard are being dropped.  A pretty big shake-up on the index as there has not been something of this magnitude in some time.  There will be buying action today in the added names and selling pressure on the deleted names.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management