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

November 8th, 2013 Business & Market Update

In Asia overnight, markets were weaker by about a point on a higher Chinese trade surplus in October.

Europe is off about three quarters of a point on the credit downgrade by S&P on France.  The downgrade of one notch is attributable to the slower pace of recovery for the second largest economy in the region.

In the US, the Non-Farm Payrolls for October were released this morning and were well above estimates at 204000 vs. 120000.  A massive beat to say the least.  Also, September was revised up 15000 to 163000.  The unemployment rate increased slightly to 7.3% from 7.2% on an increase in rate of those no longer looking for work.  Of course this news was initially met with futures selling off (you know by now that good news is bad for the markets?) With futures trading down about a quarter point.  This number brings the tapering discussion back into play and thus the debt markets are falling like a stone this morning with the 10 year US bond yielding 2.73% up from 2.64% yesterday.  Oh how memories are short, keep in mind the debt ceiling and budget talks will be back on the front burner early in the new year which will likely take us for another ride on the big political coaster.  I continue to tweak all mandates to take into account the changes and the pace of change and as investors we are looking beyond the next report and continue to invest in positions that will provide preservation of capital with a strong income component and sustainable longer term growth.

Canadian employment was also released this morning and beat by a couple of thousand jobs to 13200 for October.  There were no revisions to September and the rate ticked up a notch to 7.0%.  TSX futures were lower by a quarter point however the Canadian 10 year bond yield was up about half of its US counterpart at 2.58%.

The good jobs news has the USD rallying and thus trashing gold as the metal is off 17.00 to 1291.  Oil is up on the news to 94.45 and the loonie is down about a third of a cent to 95.31.

In mandate earnings news this morning Telus beat on earnings and met revenues.  The company also increased the dividend by 12.5%.  Arc Resources met on both bottom and top line, as did CI Financial, Firm Capital and InterPipe.  Brookfield Asset Management beat across the board.

Lastly, Twitter increased on its first day of trading yesterday by 80% and the entire float on the issue turned over at least once!  Not bad considering most earnings estimates would not suggest the company will be profitable until 2015 at the earliest.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

November 7th, 2013 Business & Market Update

Asia sold off overnight by about three quarters of a point awaiting the economic news out of Europe and the US.

Europe at midday is rallying on the news that the ECB has cut its overnight rate in half to 0.25% to combat continued deflation in the region.  Markets are higher by 1.5%.  Draghi suggested that the economy is starting to show positive signs across the entire region and by supplying more liquidity that trend should continue into 2014.

In the US, Q3 GDP on a year over year basis came in at 2.8% vs. estimates at 2.0%.  This is a large beat and shows that economic recovery is continuing at a stronger pace than thought over the last quarter.  The previous month year over year was not revised confirming the stronger numbers.  Also, Initial Weekly Jobless Claims were released and came in at 336000 vs. 335000 estimated.  The decline from last week was 9000.  Last week was revised higher by 5000 so the net over the last two weeks is in the range that is acceptable and it would seem stable.  Futures are pointing higher by about a half a point in the US and about a quarter point in Canada on the back of the positive news.

Gold is selling off into the news down 15.00 to 1302, oil is off 0.32 to 94.48 and the loonie is weaker by 0.30 to 95.70.  USD strength today is moving the commodities markets lower.  Bond markets are stronger across the entire curve this morning with the ten year yields falling in both the US and Canada to 2.64% and 2.53% respectively.

In mandate earnings news this morning, BCE missed by 2 cents on the bottom line but reaffirmed guidance for the balance of the year and the accretive effect of the Astral merger on 2014.  Manulife beat on both the bottom and top lines, RioCan beat on the bottom line and on Funds From Operations (FFO) and Sun Life beat on both the bottom and top line.

Twitter comes to the market today with a final IPO price of $26.00 under the symbol TWTR.  It will be interesting to see how the stock trades out of the box as all will be comparing it to the Facebook debacle of two years ago.

Lastly, tomorrow the October Non-farm Payroll numbers will be released and will be somewhat skewed due to the US government shutdown, however they will provide some insight going into the holiday season.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management