December 5th, 2013 Business Update

A sell-off in Japan overnight as the Asian market caught up with the US.  China in contrast was off just 0.20%.

In Europe at midday markets are flat on no changes in from the ECB as Mario Draghi held his monthly press conference.  There has been some inflation pick-up and reduction in unemployment causing pause in any changes.

In the US the Initial Weekly Jobless Claims were released and declined 23000 from last week to 298000.  Also, Q3 GDP has been revised to 3.6% up from 2.8% and estimated at 3.1%.  Some solid economic numbers leading into the Non-Farm Payrolls tomorrow morning.  Markets are slightly higher.

Canadian futures are trading lower on bank earnings this morning.  Both RBC and CIBC beat on the bottom lines while TD missed.  Revenue was strong at all three however CIBC missed on the top line.  RBC announced that CEO Gord Nixon will be stepping down next fall, which is a little early for a bank CEO in Canada.  TD is splitting 2-1 and increased the dividend by a penny.  CIBC had some one time charges that caused weakness in the quarter.

Gold continues the downward trend off 23.00 to 1224, oil is up a nickel to 97.26 and the loonie is stronger this morning up 0.11 to 93.79.  US and Canadian 10 year bonds are trading a little lower this morning yielding 2.86% and 2.67% respectively.

Lastly, I have added another interesting piece from the Pimco Conference that I attended a couple of weeks ago.  The income story is an important one to most of my clients and most Canadians.  With low real interest rates and it would seem the rise in rates to come, one of the biggest dilemmas currently is how to invest in the asset class while preserving capital and generating a reasonable amount of income.  The article speaks of how Pimco sees the next year and what they do to try and provide a reasonable solution.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

www.glwm.ca

October 2nd, 2013 Business and Market Updates

Some decent upside in China overnight on the back of the US markets upside move yesterday.  Japan on the other hand fell about 2% due to the an increase in Sales Tax.

Mario Draghi speaking this morning is suggesting that the Euro recovery is continuing albeit at a slow pace.  He is confident the trend will continue and will do all he can to maintain or increase the current pace.  With all that said he left rates alone at 0.5% which caused some weakness in markets there.  The big index is down about a half a point.  Also, our Italian friends have done another about face today as the coalition members governing the country have now decided to continue on as they were.  On Monday if you recall, the coalition was dissolving which would have led to another election.  It would seem that the Italian people were not having any of that and the government listened.  Hmmmm, make you think of a certain government to the south of us that may take some notice of the peoples demands over their own posturing?

The US futures are off about a half a point on the ADP Employment numbers which came in at 166000 vs. 180000 estimated for September.  Also August was revised lower.  These numbers will play into the Non-Farm Payrolls for September which are scheduled to be released (maybe) Friday.  I say maybe as one of the government agencies that has been shut down is the Bureau of Statistics.  Hopefully the work had been completed before Monday.

Canada is following the US lead and trending down about a half a point.

Gold is up about 14.00 to 1300.00, oil is off 7 cents to 101.63 and the loonie is down 13 bps to 96.69.  Debt markets are rallying into the employment numbers with the US and Canadian 10 year bonds yielding 2.63% and 2.54% respectively.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

www.glwm.ca

 

 

July 4th, 2013 Business & Market Update

Markets in the US are closed today, however the world continues to function none the less.

Yesterday, the coup in Egypt did come to conclusion with the current leader being ousted by the military in what so far has been a relatively peaceful takeover.  We shall see as the days progress as to how the transition to the temporary government will be accepted.  An interim leader has been put into place and elections will be held in the months to come to replace the current leader.  As you are aware, oil has risen in the past week on the news and this morning has sold off slightly now that the coup has occurred.  This is a fluid situation and we will continue to monitor closely.

In Asia, the Bank of Japan President claimed some success for the central bank’s aggressive monetary stimulus, saying that the economy is on track to a steady recovery with signs inflation starting to return. Markets there were flat overnight.  China was up about 1%.

In Europe, Mario Draghi gave his monthly presser this morning and suggested again stimulus will not be reduced any time soon making sure not to make the same mistake that the Fed made a week or so ago.  He also mentioned that there is continued improvement in the Euro zone economies, however there is still considerable risk as to the duration of the recovery.  Markets in the region are on board with his comments this morning as
markets in the region are up 2.75%.

Mark Carney gave his first address to the UK parliament today as Governor of the Bank of England and maintained rates and asset purchases as is.  Notably his comments did seem to be more succinct and concise as was the case when he had the job here.

As I mentioned US markets are closed today, but electronic futures are still trading and up about 1%.  Tomorrow we get the June Non-Farm Payrolls in the US and the estimate is for around 170000 new jobs.

Canadian markets are set to open higher this  morning by about a half a point.

Gold is selling off this morning down a couple of bucks to 1248, oils is down 16 cents to 101.08 and the loonie is stronger by a quarter to 95.08

I will be on the road tomorrow and will be sending in my comments remotely to Paula to forward to all after the employment numbers are released.  I will be in contact throughout the day.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

www.glwm.ca

May 1st, 2013 Market Update

Good morning all and welcome to May.  Yes, tax season is finally over and summer is on the way.

Today many markets are closed for May Day celebrations, which in Europe have turned into May Day protests on austerity.

The China Purchasing Managers Index dropped from 50.9 in March to 50.6 in April which still indicates growth however at a slightly lesser pace.

Tomorrow, Mario Draghi will provide us with some insight into how the Euro zone is fairing and provide forecasts for the balance of the year.  It is widely rumoured that the ECB will reduce rates and or look to some other stimulative measures to help the Euro zone recover.

Today UK Factory Orders saw a nice rise in April to 49.8 vs. 48.6 in March which shows the economy is almost in the growth channel (greater than 50.0 is the benchmark) and this surprising upswing for the month has the UK markets rallying as the balance of the region is closed today.

In the US the ADP Private Payroll numbers for April were released this morning with the number coming at 119000 new jobs created vs. estimates of 150000.  The negative number has caused futures to sell off in the US from a slightly positive bias earlier this morning.  This number in most cases sets up the Monthly Non-Farm Payrolls which are due out on Friday morning with estimates of 145000.

Gold is off $7.00 this morning at 1465, oil is off more than a $1.50 at 91.95 and the Loonie is flat at 99.31.

Lastly this morning, we are now in the “Sell in May and go away” month however our quant analyst Martin Roberge would suggest that this may not be the case this year.  He states,

  • ·         The “Sell in May and Go Away” season has now arrived. But an important dilemma for investors this year is the historical script showing that S&P 500 returns above 10% through April usually hold until the end of the year.
  • ·         Thus, even though markets are likely to maintain their uptrend, volatility should increase from here; hence, the need for investors not to chase recent winners but look for laggards.  We decided to resist cutting our equity exposure because beneath the surface, stocks are pricing in recessionary conditions as suggested by the strong outperformance of defensive stocks this year and the much depressed valuation of resource stocks.
  • ·         We don’t want to sound complacent but as we see next, the investment climate and global economic backdrop are more constructive this year than they were at this time in 2011 and 2012. Moreover, should the ECB cut rates and deliver more, it will add to the probabilities of a second-half recovery, which should normally help cyclical stocks to get out of their funk.
  • ·         This is not spring 2011 and 2012. Key differences are: 1) monetary reflation has gone global and central banks have removed tail risks, 2) leading economic indicators (LEIs) are rising worldwide, 3) growth in Chinese exports and imports is recovering, and 4) the US/global trailing EPS-growth cycle has shifted from deceleration to reacceleration

Some positive but continuing cautious analysis which I am in agreement with.  We shall continue to be defensive and adhere to structural allocation models across all mandates going into the summer.

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

www.canaccord.com

 

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