December 4th, 2013 Business & Market Update

After the sell off in North America yesterday, Japan following overnight with a 2% decline however, China in contrast was higher by about 1.3% on a stronger currency.

Europe is following suit with declines of about three quarters of a point at midday.

In the US the ADP Private Payrolls for November were released and beat by a large margin coming in at 215000 vs. 170000.  This number is the precursor to the Non-Farm Payrolls that will be released by the US government on Friday morning.  Estimates after last months big beat are averaging 166000 new jobs for November.  Futures are trading lower by about a quarter point.  Bond prices are falling pushing the 10 year yield in US bonds to 2.82% and in Canada to 2.62%.

Canadian futures are also down by about a quarter point after strong earnings from the National Bank.  The bank beat on both bottom and top lines, declared a stock split and a dividend increase.  Today at 10am the BOC will release the latest policy statement in regard to interest rates and the general state of the economy.  Interest rates are not going to move, however, the Governor’s comments will be closely watched.

Gold is trading lower by 4.00 to 1215, oil is up 0.77 to 96.82 and the loonie is off another 0.17 to 93.75.

I would seem the correction is upon us which will provide some solid entry points across the board in equities.  I continue to hedge fixed income positions to take advantage of the slowly rising interest rates while maintaining a strong cash equivalent position that will be available to take advantage of higher rates down the road.

November proved to be another good month in all mandates as the changes that have been made over the past couple of months continue to pay off in regard to performance.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

October 30th, 2013 Business & Market Update

Green across the board this morning as Asia and Europe are coming for the ride the north American markets continue to be on.  Asia was up about a point and a half and Europe is up about a third of a point.

Europe is getting some further lift as Spain is finally emerging from recession, albeit by a small amount but the numbers are positive.  Also, Euro zone economic sentiment increased again in October which is also helping markets stay positive.

In North America, we got the CPI and ADP Private Payrolls this morning.  CPI met estimates coming in for the month of September at 1.2% and year over year at 1.2%.  While estimates were met, the number is still well below where the Fed would like it.  The ADP number was 130000 for October which was below estimates at 150000.  September was revised down to 145000 from 166000.  This is the lowest level in the since April 2013.  The monthly average over the last year is 169538 suggesting growth is continuing but still at a muted pace which continues to favour very accommodative monetary policy.  The Fed releases the minutes of their two day meeting at 2pm today which should provide us with some further information in regard future policy.

The US futures re higher by about a quarter point and with Canadian futures up by a slightly lesser amount.

Gold is up 9 bucks this morning to 1354, oil is down a buck to 97.24 and the loonie is up 0.16 to 95.70.  The US and Canadian 10 year bonds are rallying this morning with yields down to 2.50% and 2.39% respectively.

In mandate earnings news, Gilead Sciences missed by a penny on the bottom line but beat on revenues and raised guidance for the coming year.  Sun Communities missed by a penny on the bottom line but beat on revenues by a big margin.  Also Funds From Operations (FFO) was much higher than estimated and guidance was maintained.  Comcast beat on earnings and met revenues.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

July 31st, 2013 Business and Market Update

This morning we are seeing mixed markets around the world as all are waiting for the US Fed to release the minutes of the meeting concluding today.  The “taper” word will be the key and of course any dates for the action, which I doubt we will get, will set the tone for the markets direction.

Asia and Europe are both quite mixed today also awaiting the Fed decision.  Asia was off about 1.5% overnight.  Europe was mixed with the UK higher and France and Germany lower.

Euro region unemployment dropped for the first time in 2 years however the rate is still at a record 12.1%.

North America is flat going into the Fed meeting, however there is additional economic news this morning.  US GDP for Q2 was released and came in well above estimates at 1.7% vs. 1.0% and just behind Q1 at 1.8%.  Q1 was revised down however to 1.1%.  Bottom line, this is a good number but far off the level the Fed is looking at for real growth in the economy.  We also had Canadian GDP which came in month over month at 0.2% vs. 0.3% and annualized (May) at 1.6% which matches estimates.  The ADP Private Payrolls was also released and beat estimates by 20000 coming in at 200000 vs. 180000.

Markets are slightly lower but seemingly directionless.

The key will be Friday’s Non-Farm Payrolls that will set the tone for the Fed to move.

The problem that we have currently is good news or bad news, the markets are interpreting it as one thing – extreme volatility.  We continue to try and mitigate that volatility as much as possible.

Gold is off 3.00 to 1320, oil is up 50 cents to 103.55, the loonie is down 0.09 to 96.94.  The US 30 year Treasury is off a point, on the positive economic news with the yield moving higher to 3.72%

In earnings news, which I might add has generally been good, but virtually ignored, mandate company Comcast beat on both the top and bottom lines.  Rio Can and First Capital Realty both beat FFO estimates and saw good revenue and cash flow growth in the first half of the year.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

July 3rd, 2013 Business and Market Update

In Asia the Chinese PMI numbers were released and were a nice surprise to the upside in regard to the services sector.  However the construction industry is continuing to stagnate. Markets there were off about a point overnight.

In Europe, while we continue to see improvement across the board for a reasonable recovery in the the second half of the year, markets have sold off at midday by about 1.5% on news that Portugal is once again in trouble as 10 year bonds there broke through the 8% level yesterday.  There have been some issues within the government in regard to difference of opinion on the austerity programs running in the country.  Threatened resignations from a couple of ministers in the finance department have the markets concerned.

In the US lots of employment information this morning and most of it good.  The ADP Private Payrolls for June were released and came in well above the estimate of 160000 at 188000.  We also got Initial Weekly Jobless Claims that were just below estimates of 345000 at 343000.  Both numbers suggest that the employment picture continues to improve, albeit at a slow pace.  Markets are trending lower however on the world news and the unrest in Egypt.  Futures are off about a quarter point, which is about half as much as when I came into the office at 7am indicating the jobs numbers have had some effect on moderating markets.  The monthly employment numbers for June will be released on Friday, due to the US Independence Day holiday tomorrow.

Canadian futures are lower by about a quarter point regardless of the resource uptick.

Gold is higher by about 5 bucks to 1250, oil continues its run higher on the continued unrest in Egypt by about 1.75 to 101.25.  This latest run on oil is due to the situation in Egypt which does suggest that no matter what anyone suggests self sustaining fossil fuel production makes a great deal of sense for North America as the unrest in the Middle East never seems to end.  The loonie is virtually flat at 94.75.

With the US holiday tomorrow, markets to the south close at 1pm today and reopen on Friday. Also, volumes in Toronto will be light through to the end of the week.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

June 6th, 2013 Market Update

After the big hit in North America on the ADP Jobs report yesterday we are seeing a relatively flat opening on the way.  Japan was off a point in sympathy with the North American decline as was China.

In Europe markets are higher by a quarter point at midday on bargain hunting and the fact the BOE and ECB are both leaving the asset purchase programs and interest rates alone basically playing the wait and see game going into the summer.

In the US, Initial Jobless Claims came in down 11000 to 346000 last week which is a good number, but really failing to move markets in that the Non-Farm Payrolls are being released tomorrow morning.  Futures in the US are virtually flat this morning.

The new Bank of Canada Governor Stephen Poloz is giving his inaugural talk to the finance committee this morning and I managed to last about 10 minutes until I started to dose off.  It would seem we have in knack in this country of appointing the most boring, dry bank governors on the planet to the job.  Nothing new is coming out of his mouth and it looks like he is doing the right thing and staying the course for now.

Gold is off slightly to 1400, oil is up 1% to 94.62 and the loonie is down 12 bps to 96.60.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management