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 23rd 2013 Business Update

It would seem that real estate news out of China yesterday spooked investors in Asia and Europe in regard to a possible tightening of monetary policy in the region.  Markets in Asia were off about 1.5% overnight.  In Europe markets are lower by about a point at midday on the Asian news and the fact the ECB will holding financial institutions to a higher level of disclosure when it comes to capital requirements.  This is a good thing in my view longer term as it will breed more confidence in the Euro banks, however the short-term view is less profitability for these institutions.

US Futures are off about a third of a point and Canadian futures are down about a quarter point.

Gold is retreating this morning down 8.00 to 1333 as is oil down more than 1% to 96.80.  The loonie is off 0.34 cents this morning to 96.85.  Bonds are up slightly with US and CDN 10 year yields at 2.50% and 2.46% respectively.

In mandate earning news, CNR reported after the close last night and beat estimates by about 10% on earnings and about 5% on revenues.  The all important operating ratio feel below 60% to 59.8% which shows continual improvement (the lower the number the better).  Carloads and tonnage were both up more than 3% and the company will buy back more than 15 million shares over the next year.  The stock will open higher about 2% this morning according to the pre-market.

The Bank of Canada will release its policy statement this morning at 11am EDT and the assumption is nothing much will come of it.  If there is anything interesting worth getting out I will send another mail later today.

Lastly, yesterday was Apple day as the company announced the new iPad Air for the holiday season.  The lower priced and not as heavy tablet boast loner battery power and higher resolution.  Not really a big Apple announcement by any means.  It would seem that the company needs some “wow” factor to continue the run it has been on the last while.

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 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