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

October 31st 2013 Business & Market Updates

Yup its Halloween, which of course also means its month end and it looks like the pundits got both September and October wrong as markets world wide for the most part rallied.

Looking at the overnight numbers, Asia was off about a point following the close in the US yesterday.

Europe on the other hand is rallying up about half a point at midday as investors continue to look for value in the region.

US futures are off slightly this morning despite the fact the Initial Weekly Jobless Claims were virtually at estimates coming in at 340000 vs. 338000.  Also, as mentioned yesterday the FOMC did release the minutes of their two day meeting (attached) and stated that there would be no change to asset purchases or interest rates until both inflation and employment further improved.  The comments indicated that economic improvement is continuing but still at a sluggish pace.  Muddle through comes to mind again.  This is the new normal for the foreseeable future in my view.  As always, I have highlighted in RED the points in the release that I think were interesting.  Bottom line accommodative monetary policy continues.

I have also added the most recent view from Canaccord US Strategist, Tony Dwyer who is suggesting that while the markets are somewhat overbought with the run up in the last couple of months and a correction would not be a surprise, the trend continues to be higher and he continues to affirm his 1955 target on the S&P with a modest 15 multiple.  He is suggesting a modest 4 to 7% correction only and that those that are investors to stay where they are as the rally on the other side of the correction, if indeed it does occur, will be strong.

Canada released GDP numbers for August this morning beating estimates year over year at 2.0% vs. 1.7%.  Canadian futures are off about a half a point however on weak gold prices this morning.

Gold is down 23 bucks to 1325, oil is off 0.33 to 96.44 mostly on supply increases and the loonie has rebounded a third of a cent this morning to 95.77.  The bond market is flat with US and Canadian 10 year yields at 2.50% and 2.39% respectively.

Mandate earnings released after the close last night and this morning for the most part were meets or beats.  AltaGas beat on earnings and beat revenues by a large margin, American Railcar missed by a penny but also saw huge revenue increases, Visa met estimates with revenues were slightly below mostly due to declining demand by consumers in Q3, Williams beat by a large amount on both earnings and revenues and lastly, Valeant Pharma beat on both earnings and revenues.  In all a pretty solid group.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management



October 16th, 2013 Business & Market Update

The debate continues on in Washington as there are less than 15 hours remaining to get a budget and debt limit deal done.  Will it get done is the question and if it does what will it mean.  IF it doesn’t what are the ramifications.  It would seem that there are some in regard to this debate that do not care about the ramifications, which in my view is insanity.  However, my view does not count.  All we can hope for is cooler heads will prevail in the end.

Asia was mixed overnight as Japan was higher on a weaker yen and China sold off more than 1.8% on concerns with the US political fight.

Europe is lower by about a quarter point at midday once again on the US uncertainty.

In contrast, US futures are higher by about 0.75% on earnings news as both Bank of America and US Bank both beat estimates with good revenue numbers and decreases in loan losses.  As we go through the five year line on the 2008 decline, many of those bad mortgages are now off the books of many of the big US banks and balance sheets continue to strengthen.  Both stocks are mandate positions.

Gold is up 8 bucks to 1281, oil is lower by 0.13 to 101.07 and the loonie is stronger by 0.10 to 96.47.  Bond yields have been inching higher this week as the 10 year US and Canada bonds are yielding 2.74% and 2.66% respectively.

Bond rating service Fitch has put the US on credit watch with a negative bias, which was to be expected as the deadline on the debt ceiling continues to near.  I would expect Moody’s and S&P to do the same if no deal is reached today.

Lastly, the NYSE has scored a coup over Nasdaq by getting the listing for the new Twitter IPO due out later this year.  After the debacle at the Nasdaq last year when Facebook went public, the NYSE was the favored exchange going into the negotiations.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

July 12th, 2013 Business & Market Update

It would seem that the Chinese are starting to come to terms with the fact that growth at 8 to 10% a year is just not sustainable over time and a senior official in the finance department has suggested that 6 to 7% is more realistic for the balance of the fiscal year.  That comment caused the markets over there to fall by about a point and a half overnight.  Japan was relatively flat.

In Europe, we are seeing modest gains at midday with markets higher by about a quarter point.  Factory output in May fell for the first time in four months showing that the economy is still fragile in the region.  On the positive side, S&P has upgraded its outlook on Irelands credit rating suggesting the debt may fall faster than anticipated. While other countries in the union seem to be fighting continuously politically as to how to get things done, Ireland’s political parties have put the politics aside and got things done. Pretty rare in the world today but a great example to other countries in financial crisis.

The US markets are set to open slightly higher as JP Morgan and Wells Fargo both beat consensus estimates.  JP Morgan’s loan loss provisions were lower by 78% and both the top and bottom lines were stronger regardless of  higher mortgage interest rates for the quarter.

Markets have had a nice rebound this week based on the clarification by the FOMC on the tapering program in regard to asset purchases.  The gains have been across the board as cash and fixed income assets continue to flow into the capital markets.

In Canada we are going to see about a quarter point advance on the open following the US lead.

Commodities are mixed with gold off 7 to 1273, oil up 0.60 to 104.99 and the loonie down a fifth of a cent to 96.29.

Bond yields have retreated this week after the Fed minutes release with the ten year treasury yield falling back to 2.55% from 2.66% last week.  In Canada we got a similar move with 10 year GOC bonds yielding 2.42% down from 2.51% last week.

For now we seem to be in a holding pattern going deeper into earnings season which will tell the story in regard to continued recovery.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

May 8th, 2013 Market Update

Asia rallied overnight as the Dow and S&P continued the upward trend yesterday.  Japan continues to move higher due to the aggressive monetary policy to increase inflation.  Chinese exports increased dramatically in April which moved that market higher overnight also.  However there was some currency speculation which may have distorted the data somewhat.

In Europe, German March industrial output increased by 1.2% vs. estimates of a 0.1% decrease which has indices trading up about a quarter to a half a point.

In the US no economic news this morning and other than a few earnings reports the markets are relatively flat.  Futures are currently off slightly.

In Canada, mandate company Enbridge reported this morning and the pipeline company reported a 31 percent rise in first-quarter adjusted profit driven by higher volumes.  Earnings at $0.62 came in well ahead of consensus estimates at $0.51.

After trading down dramatically yesterday, Gold is moving higher this morning up 17.00 to 1466.  Oil is also higher by about 15 cents to 95.77 and the Loonie is flat at 99.55.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management