November 26th 2013 Business & Market Update

Overnight in Asia markets were slightly lower as oil markets recovered after the slide yesterday based on the Iran nuclear deal.

Europe at midday is flat despite some continued strong numbers coming from the service sector that is adding jobs at the fastest pace in more than 6 years.

US and Canadian futures are also flat this morning despite strong Housing Start and Permits numbers for October. The estimates of 933,000 were beat handily by the actual number coming in at 1,030,000. These numbers are late in coming based on the government shut-down that occurred earlier in October. The Case-Shiller Housing Index was also released this morning and it showed a year over year 13.29% increase which was in line with estimates.

In Canada, the Finance Minister suggested late yesterday that the budget would be balanced in 14 months which is sooner than was anticipated only 10 days ago. Good news none the less if you believe the shell game that is played in government finance. Also, the big news out of Canada today is the new deal that the NHL struck with Rogers Communications. The deal valued at $5.2bn will run over 12 years and give the media company total control of the NHL property in Canada. In essence CBC and TSN (Bell Media) are out. Rogers has suggested they have a deal with CBC to broadcast the Sat night game of the week and will maintain the French and other language options that the CBC offers. The deal takes about a quarter of the CBC’s total revenues which will hurt the crown corporation. TSN it would seem is out other than some regional games where they have some ownership rights (Leafs, Winnipeg etc.). For those of you that like Don Cherry and Ron Maclean it would seem for now they are still on Sat nights and will be doing some playoff games.

Gold is up about 3.00 to 1245, oil is up a couple of cents to 94.12 and the loonie is down 0.06 to 94.81. Debt markets are flat this morning with US and Canada 10 year bonds trading at 2.73% and 2.55% respectively.

Lastly, as I mentioned yesterday I would be providing some insight into the conference I attended last week and start the process this morning with an article by Mark Kiesel, Head of Global Bond Portfolio Management for Pimco. The theme was what not to buy and finding the sweet spot in the debt and equity markets based on the current environment that we are ensconced in. I found Mark quite positive, down to earth and pragmatic in his big picture view which translated nicely into his sector analysis. Take the time to give it a read it you have a moment.

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

Branch Manager & Portfolio Manager | Independent Wealth Management
Canaccord Genuity Wealth

October 29th 3013 Business & Market Update

Asia, sold off another half a point overnight as the US dollar continued to sag with most suggesting the US Fed will stay the course on debt purchases.

Europe on the other hand is up more than three quarters of a point on strong earnings news from many large caps in the region.

US and Canadian futures are flat this morning waiting for the Fed release on Wednesday.

Gold is lower by about 7.00 to 1346, oil is down 0.53 at 98.15 and the loonie is flat at 95.75.  Ten year US and Canadian bonds are also quiet this morning at 2.52% and 2.42% respectively.

The Case Shiller Housing Index was stronger than expected for September as prices advanced by 0.93% vs. 0.65% indicating the housing advance while cooling somewhat is still headed in the right direction.

Two big Pharma companies are reporting today with Pfizer out this morning with a beat on earnings and revenues meeting estimates.  After the close tonight Gilead Sciences will report.

Lastly, Apple reported last night and beat estimates by about half a point with revenues coming in slightly above estimates.  A couple of interesting points of interest:  This quarter marks another where gross margins have fallen dipping under the 40% for the first time.  Also, more than 60% of revenues in the quarter were from international sales.  The stock fell on the news after hours but is trading higher this morning in the pre-market.  It is obvious that as the company continues with its world wide sales initiatives, the margins for the products in the lesser developed world are lower and it would seem the trend is continuing.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

January 29th, 2013 Market Update

Today we are seeing some weakness in Europe and in the US futures markets primarily as due to profit taking.  Overnight in Asia however markets were higher primarily on news that the Indian government had cut the benchmark lending rate to 7.75% from 8.00%. Indices were higher by about a point across the board on further increased liquidity to the region.

Europe is off about a quarter point even with news that Italy’s borrowing costs have fallen to new three year lows at the latest auction yesterday.

In the US futures are down about a quarter point currently.

The Case Shiller Housing Index was released for November and once again year over year the index has advanced, this time by 5.52% vs. estimates of 5.55%.  While the number was slightly under estimates it virtually hit the mark and also rose for the 11th straight month.  The housing recovery in the US continues to plod along and provide positive confidence numbers.

Earnings on mandate positions were released this morning on CP, Pfizer and Metro.  CP came in adjusted at estimates or $1.28 per share.  The company exceeded revenue forecasts and the all important Operating Ration fell to 74.8 from 78.5 (lower is better in the rails).  The company also guided to a very strong second half of 2013 with record revenues and earnings.  Pfizer, came in at $0.47 per share vs. $0.44 estimated.  The company also beat on the top line.  They did however caution on the balance of 2013 with lower guidance.  Metro, the big Canadian food chain had not released earnings as of yet today but did increase its dividend this morning by 16%.  The estimates on earnings are at $1.15 per share.

Both gold and oil are higher this morning rebounding against the profit taking on the Euro and North American markets.

Moody’s yesterday downgraded all of the big Canadian banks except the Royal (which was downgraded in June) citing concerns in the housing sector and the increasing consumer debt load that Canadians continue to pile on.  Canadian consumer debt as a percentage of household income hit the record 165% level in Q3 of last year and while the Q4 numbers have not been released as of yet estimates would suggest it will still be hovering around levels that the US consumer was dealing with back in 2008 just prior to the crisis down there.  I continue to reiterate to all if you can reduce debt do it, regardless of how low interest rates are as they will not stay at these levels for ever.

In Canada, Consumer Confidence was up 5.1% in December which despite the debt concerns shows that Canadians, much like our friends to the south, are continuing to see positive economic signs.

Courtesy of:

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