April 24th, 2013 Business and Market Updates

This morning we are seeing some mixed markets with Asia up large overnight (2%) on the rally in Europe and the US.

Europe is higher at midday by about a half a point regardless of Germany’s continued slowing economy.  The players are convinced that the ECB will come to the table with more stimulus (interest rate drop) holding markets there higher by about three quarters of a point.

In the US Durable Goods for March were off 5.7% vs. estimates of 3.0% indicating that big ticket items were in decline for the month.  After a 4.3% increase in February the numbers do show the continued volatility in the sector.  US futures are trending higher this morning up slightly over yesterday’s close.

Apple released their earnings yesterday and beat the street estimates on both the top and bottom line.  However the guidance for the rest of the year was quite cautious.  The company did report a $50bn share buyback and a dividend increase of 15% bringing the yield at the current price to just over 3%.

In other earnings news, mandate companies Metro and CP Rail both released with Metro meeting expectations and CP beating on both the top and bottom line. CP’s operating ratio also improved from the last quarter which is a great measurement of whether managements plan is having success.

Gold is trading higher this morning up 20.00 to 1428.00, oil is higher up 28 cents to 89.46 and the Loonie is flat at 97.44.

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


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