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

www.glwm.ca

December 2nd, 2013 Business & Market Update

Some good news out of China overnight as November Manufacturing outpaced estimates, however markets there were off about a half a point.  Japan was flat.

In Europe, at midday markets are mixed with the EuroStoxx Index down about a fifth of a point contrary to positive news out of the UK as manufacturing there was also stronger for November.

US markets are back at full speed today after the extended long weekend and it would seem that while the shopping spree down there was strong sales numbers were lower due to deeper discounts.  Futures however are marginally stronger this morning.  Canada is following suit up slightly over Fridays close.

Gold is off 14.00 to 1237 on the continual strengthening of the US Dollar, oil is up 0.38 to 93.10 and the loonie continues to fall off about 0.14 cents to 94.08 the lowest level in two years.  Bonds are trading lower this morning with the US and Canadian 10 year notes yielding 2.77% and 2.58% respectively.

Tomorrow marks the start of the big Canadian banking oligopoly announcing earnings as BMO is first to report.  National will report Wednesday, CIBC, RBC and TD on Thursday and BNS on Friday.  Generally estimates are suggesting slight beats across the board with the possibility of dividend increases from TD and RBC.

I have added some further insight from the Pimco Due Diligence Conference that I attended recently in regard to the US Housing market which Pimco has done exhaustive research on in regard to their investment in non-agency mortgage backed securities.  While there has been a solid recovery, there is a great deal of room left in many regions of the country for continued growth.  A key takeaway was the fact the residential real estate is a market of houses not a housing market.  The difference is the fact that not all markets are the same (Manhattan vs. south Florida as an example).  A national number indicating housing starts, pricing and permits does not provide a realistic picture regionally of where value lies.  Not surprisingly, when asked about the Canadian market, for the most part the response was that it is overvalued.  Of course the same analysis applies in regard to regions.  I am sure you will find it very interesting.

Lastly, while on the road Thursday and Friday last week I was unpleasantly surprised at the traffic in the town of Peterborough, ON (population 135,000) due to the Canadian version of Black Friday.  I had meetings most of the day in town and it was like driving around in downtown Toronto.  I saw accidents on the road and in parking lots, line-ups at banks, gas stations and malls that were insane.  All to get a deal on something that is probably not needed at the end of the day.  While I understand it is good for the economy that the consumer is out there spending, I wonder at what cost from a debt perspective?  This is one US tradition that I would be happy to export back to them!!

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

www.glwm.ca

November 19th, 2013 Business & Market Update

A sloppy overnight and morning session in both Asia and Europe with markets in both regions off.  Asia is down about a quarter point on profit taking after a couple of strong days and Europe is off on weak earnings reports.  The OECD suggested that the ECB increase the pace of asset purchases to avoid a Japanese style deflationary economy going forward.

The US and Canadian futures are virtually flat this morning with a slight bias to the downside.

Gold is flat this morning at 1272, oil is off a quarter to 93.43 and the loonie is down slightly to 95.85.  Bond markets are a little soft this morning with yields in the US and Canada at 2.69% and 2.54% respectively.

Mandate company Home Depot released earnings this morning and beat on both earnings and revenues and provided stronger guidance going into the next year.

Lastly, I will be away tomorrow through Friday at the Pimco Due Diligence conference out west.  Pimco is the biggest fixed income money manager on the planet handling more than $2trillion.  Most of my mandates hold the Monthly Income Fund and I am looking for more ideas going into the New Year.  The conference will be highlighting fixed income themes going forward into the rising interest rate environment that may be coming in the next year and how to capitalize on it.  As you are all aware we have had a positive 30 year run in the bond markets and based on the size of the asset class and the weight in most allocation models the impending rise in rates will cause capital erosion and poor returns if simple buy and hold strategies are maintained.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

www.glwm.ca

November 15th, 2013 Business & Market Update

A solid overnight session in Asia as markets there reacted to the Yellen comments, the reforms in China that will promote internal growth and the Yen falling bolstering the Japanese market.  China was up about 1.5% and Japan was stronger by almost 2%.

Europe is essentially flat on a broad basis as markets there continue to battle the slow pace of recovery.

US and Canadian markets after a strong rally into the close on Yellen’s comments are looking to open higher this morning by about a quarter point.  Mrs. Yellen the heir apparent to replace Ben Bernanke, effectively held the dovish line yesterday indicating that there was no reason to move on tapering just yet.  This quote tells the story, “It’s important not to remove support, especially when the recovery is fragile and tools available to monetary policy, should the economy falter, are limited given that short-term interest rates are at zero”.

Gold is flat this morning at 1286, oil is higher again today after a rally yesterday up 0.27 to 94.69 and the loonie is flat at 95.55.  US and Canadian 10 year bonds after a rally into the news yesterday are flat this morning yielding 2.70% and 2.57% respectively.

Lastly, the Oracle of Omaha, Warren Buffett has made a big move indicating that he has taken a big position in Exxon and sold a good portion of his stake in Conoco Oil.  On the negative side however, with the purchase of Heinz earlier this year, the company has decided to close the Leamington, ON plant which will cost the small town some 700 jobs.  For as good as consolidation is, the down side is some do suffer in the process.  Hopefully they can all find alternative employment.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

www.glwm.ca

October 25th 2013 Market Update

Asian markets tumbled about 2.5% overnight on the potential for the PBOC to tighten credit and the strength of the Yen against the USD.

In Europe, markets are off slightly at midday as the Asian news and business morale in Germany declining in September.  The loss is about a fifth of a point as the UK economy increased at the fastest pace since 2010 in the last quarter.

US futures are flat this morning regardless of the fact Durable goods (ex transports) for Sept were lower than expected.  Canadian futures are also pointing to a relatively flat opening.

Gold is off this morning about 9.00 to 1340, oil is rebounding up half a point to 97.55 and the loonie is off another 0.25 cents to 95.73.  The US and Canadian 10 year bonds are flat this morning yielding 2.51% and 2.42% respectively.

In mandate earnings news, Eastman Chemical and Microsoft both beat on the top and bottom lines.  In the case of Microsoft it was also announced that the current CEO will be stepping down next year.  Consumer products companies Sherwin Williams and P&G both missed estimates slightly but met or beat on revenues.

Lastly this morning, Twitter announced the terms of the coming IPO and have lowballed both pricing and size.  Lessons learned from the Facebook debacle a couple of years ago.  This deal will be highly subscribed regardless of the fact the company has not been profitable since it began.  We shall watch with some interest but will not be participating in the deal.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

www.glwm.ca

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

www.glwm.ca

October 22nd, 2013 Business / Market Update

Overnight in Asia, markets were fairly quiet, despite a big increase last month in Chinese home prices.  The biggest in three years which has some wondering how inflationary this may be and will the PBOC respond.

In Europe, markets are higher by about a half of a point on the jobs news out of the US.  The monthly Non-Farm Payrolls for September were finally released this morning and the number was far below estimates coming in at 148000 vs. 180000 estimated.  The unemployment rate fell to 7.2% from 7.3% on the participation rate falling.  However, the news was not all bad as August was revised higher by 24000 to 193000.  Bottom line growth is occurring however until Washington gets its act together many companies will not actively hire.  Some form of tax reform must take place to assure companies that hiring and expending capital into bricks and mortar will be rewarded down the road.    US futures are higher by a quarter point this morning on the news.

Gold is up 14.00 to 1328 on a weaker US dollar, oil is off another 0.27 to 98.95 and the loonie is flat at 97.04.  The US and Canadian 10 year bonds continue to strengthen this morning as yields are 2.54% and 2.50% respectively.

In mandate earnings news, Lockheed-Martin beat on both earnings and revenues and indicated higher guidance for the balance of the fiscal year.  Whirlpool also beat on both earnings and revenues but cautioned on the balance of the year.  Both stocks are set to open higher this morning.  After the market close CN Rail will report,  I will provide the details tomorrow.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

www.glwm.ca