November 8th, 2013 Business & Market Update

In Asia overnight, markets were weaker by about a point on a higher Chinese trade surplus in October.

Europe is off about three quarters of a point on the credit downgrade by S&P on France.  The downgrade of one notch is attributable to the slower pace of recovery for the second largest economy in the region.

In the US, the Non-Farm Payrolls for October were released this morning and were well above estimates at 204000 vs. 120000.  A massive beat to say the least.  Also, September was revised up 15000 to 163000.  The unemployment rate increased slightly to 7.3% from 7.2% on an increase in rate of those no longer looking for work.  Of course this news was initially met with futures selling off (you know by now that good news is bad for the markets?) With futures trading down about a quarter point.  This number brings the tapering discussion back into play and thus the debt markets are falling like a stone this morning with the 10 year US bond yielding 2.73% up from 2.64% yesterday.  Oh how memories are short, keep in mind the debt ceiling and budget talks will be back on the front burner early in the new year which will likely take us for another ride on the big political coaster.  I continue to tweak all mandates to take into account the changes and the pace of change and as investors we are looking beyond the next report and continue to invest in positions that will provide preservation of capital with a strong income component and sustainable longer term growth.

Canadian employment was also released this morning and beat by a couple of thousand jobs to 13200 for October.  There were no revisions to September and the rate ticked up a notch to 7.0%.  TSX futures were lower by a quarter point however the Canadian 10 year bond yield was up about half of its US counterpart at 2.58%.

The good jobs news has the USD rallying and thus trashing gold as the metal is off 17.00 to 1291.  Oil is up on the news to 94.45 and the loonie is down about a third of a cent to 95.31.

In mandate earnings news this morning Telus beat on earnings and met revenues.  The company also increased the dividend by 12.5%.  Arc Resources met on both bottom and top line, as did CI Financial, Firm Capital and InterPipe.  Brookfield Asset Management beat across the board.

Lastly, Twitter increased on its first day of trading yesterday by 80% and the entire float on the issue turned over at least once!  Not bad considering most earnings estimates would not suggest the company will be profitable until 2015 at the earliest.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management