November 5th, 2013 Business & Market Update

Overnight in Asia, Chinese markets were stronger by about a third of a point on news out of the government that growth of 7.2% is required to provide strong employment over the next year.  Japan was also higher as bargain hunters stepped in after a few days of losses.

In Europe the forecasts are coming for 2014 and 2015 and as mentioned yesterday, the road is bumpy but it would seem the big economy is going in the right direction.  2013 will end slightly positive with GDP at about 0.4%.  The forecast for 2014 is 1.1% and 2015 1.7%.  Also, the UK Service Sector advanced at the fastest pace in more than 16 years.  None of this news however is what the markets were looking for as an interest rate cut and or more asset purchases by the ECB is what traders want.  To that end markets in the region are down about a point at midday.

US and Canadian futures are trading down about a quarter point this morning as many are still setting up for the onslaught of economic news coming toward the end of the week.

Gold is up slightly this morning to 1314, oil is off 0.29 to 94.33 and the loonie is down about a quarter cent to 95.68.  Bonds are off slightly with the US and Canadian 10 years’ yielding 2.62% and 2.50% respectively.

Mandate earnings out this morning are showing beats across the board with CVS Caremark, Brookfield Renewable Energy and TransCanada all coming in ahead of estimates.  All three securities are trending higher in the pre-market.

Lastly, a few other things that caught my eye this morning:

  • ·         Twitter has increased the price of the IPO to the mid $20’s from the mid teens.
  • ·         Blackberry settled in down about 17% yesterday and looks to open where it closed this morning as the deal makers are trying to spin the latest developments, I continue to suggest avoidance.
  • ·         EnCana, once the darling of the natural gas industry in Canada this morning came out with a big earnings miss and a re-structuring program that will see the company downsize by about 20%.  The company is also cutting its dividend by two thirds and spinning off Clearwater Minerals in an IPO.
Kenneth A. Dick, BA, CIM, CFP, FCSI

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

August 29th, 2013 Business and Market Update

A bit of a rally yesterday as many went bargain hunting as the day progressed.  Of course the threat of war in the middle east is hovering over markets and as we go into the long weekend caution will be the word for all.

In Asia overnight, markets rallied on the North American rise by about a point.  Euro markets are showing gains at midday of about a quarter point.

In North America, the US futures are pointing higher this morning by about a quarter point on higher Q2 GDP of 2.5% vs. 2.2% estimated.  Also the Weekly Jobless Claims came 6000 less than last week at 331000 which was also better than estimates of 339000.  With the housing rally in the US stalled, the GDP and employment numbers are promising.

Gold is off this morning by  7.00 to 1410, oil is lower by 0.50 to 109.56 on no new news out of the middle east, the loonie is lower by 18 bps to 95.15 and the 10 year yields are up in both Canada and the US to 2.67% and 2.82% respectively.

The last of the three big banks reported this morning and all beat estimates on earnings and matched revenue expectations.  Both TD and RBC increased dividends while CIBC will buy back up to 8 million shares over the coming year.  All suggested that margin compression will continue through the balance of fiscal 2013 and 2014 and there has been some slowdown mortgage applications in the last quarter.  The profit beat from all came from the wealth management divisions with an average increase of more than 15%.  Wholesale, retail and capital markets saw an average decrease of 10%.  In all, reasonable reports for the banking oligopoly.

Lastly, Verizon is making a bid for 45% of Vodaphone the big Euro cell company which will provide a solid position in that market.  It also suggests that Verizon may have shelved its Canadian plans for the time being, which in turn should help the Telco’s here in Canada.

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 29th, 2013 Business & Market Update

A very busy week this week as the earnings reports continue to come at a fast pace, the FOMC meets again Tuesday and Wed with a statement set for release on Wed afternoon and Friday we get the July Employment numbers our of the US.

Overnight in Asia, the Yen was once again stronger and more concern over a slowing Chinese economy caused Japan to drop 3.5% and China 1.75%.

Europe however is higher at midday as Italy has started to recover at a faster pace and should see positive GDP in fiscal 2014.  Markets are trading higher by about a third of a point.

US futures are down about a fifth of a point on no real news as markets wait for the Fed and the employment number later in the week.  Canadian futures are flat this morning.

Gold is trading higher on the weaker dollar this morning up 10.00 to 1337.00, oil is higher by 38 cents to 105.09 and the loonie is flat at 97.33.

On the earnings front, mandate companies, Arc Resources, Air Castle and Eastman Chemical are all announcing results after the market closes this evening.  I will provide the results in tomorrows blog.

A couple of big Canadian companies are in the news today.  The US President stated this weekend that the job creation numbers that have been estimated for the creation and servicing of the Keystone Pipeline project will be about a tenth of what was originally estimated.  Where he got the numbers from has not been divulged, however I am sure there will be much more on this in the days to come.  TransCanada for their part has suggested that a $7.6bn project that spans the continental US would create and sustain more than 20000 jobs which they feel is a conservative estimate.

Lastly, the Hudson’s Bay Company today announced a deal to buy Saks the big US high end retailer for about $2.6bn.  The deal, while accretive is an expensive one for HBC and the financing is being done in a number of different ways through private investment, debt and equity.  The company also announced it will be reducing its dividend by about half to help pay for the deal.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

Euro Zone GDP Falls, US Jobless Claims Down

On this day of love, it would seem that it is not being felt in the Euro zone as Q4 GDP fell 0.6%. That stat is causing the capital markets over there to sell off to the tune of approximately three quarters of a point.  Asia showed solid gains (other than China as it is still closed until Monday) of about three quarters of a point.

Moving to North America, there seems to be lots of love in the air, but not enough to turn futures north as they are down by about a quarter point this morning.  Bonds are rallying into the market slide by about the same amount.

The positive news in the US starts with the Weekly Jobless Claims which were well below estimates of 360000 at 341000 declining 27000 from last week.  We then head to the consolidation room where Warren Buffet and his new date, private equity firm 3G Capital, have put an offer on the table to take HJ Heinz private at $72.50 per share which represents a 23% bump over yesterdays close.  The deal valued at $28bn is the biggest ever in the food industry.  Warren sees money in Ketchup!!  The last kiss sees AMR (American Airlines) and US Air merging forming the largest airline on the planet.  The merger which will need regulatory approval and will take the synergies of both companies to provide a more efficient travel experience.

In earnings news, two mandate positions are reporting today.  RioCan beat estimates by a large amount and FFO (Funds From Operations) increased 16% to $116mn or $0.39 per share.  CI Investments will also be releasing earnings today but had not done so as of writing this morning.  Consensus estimates for the quarter are at $0.34 per share.

So today, with all the love in the air and the relatively positive news out there, we are in for a risk off day which would suggest a buying opportunity is on the horizon.

Courtesy of:

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