July 31st, 2013 Business and Market Update

This morning we are seeing mixed markets around the world as all are waiting for the US Fed to release the minutes of the meeting concluding today.  The “taper” word will be the key and of course any dates for the action, which I doubt we will get, will set the tone for the markets direction.

Asia and Europe are both quite mixed today also awaiting the Fed decision.  Asia was off about 1.5% overnight.  Europe was mixed with the UK higher and France and Germany lower.

Euro region unemployment dropped for the first time in 2 years however the rate is still at a record 12.1%.

North America is flat going into the Fed meeting, however there is additional economic news this morning.  US GDP for Q2 was released and came in well above estimates at 1.7% vs. 1.0% and just behind Q1 at 1.8%.  Q1 was revised down however to 1.1%.  Bottom line, this is a good number but far off the level the Fed is looking at for real growth in the economy.  We also had Canadian GDP which came in month over month at 0.2% vs. 0.3% and annualized (May) at 1.6% which matches estimates.  The ADP Private Payrolls was also released and beat estimates by 20000 coming in at 200000 vs. 180000.

Markets are slightly lower but seemingly directionless.

The key will be Friday’s Non-Farm Payrolls that will set the tone for the Fed to move.

The problem that we have currently is good news or bad news, the markets are interpreting it as one thing – extreme volatility.  We continue to try and mitigate that volatility as much as possible.

Gold is off 3.00 to 1320, oil is up 50 cents to 103.55, the loonie is down 0.09 to 96.94.  The US 30 year Treasury is off a point, on the positive economic news with the yield moving higher to 3.72%

In earnings news, which I might add has generally been good, but virtually ignored, mandate company Comcast beat on both the top and bottom lines.  Rio Can and First Capital Realty both beat FFO estimates and saw good revenue and cash flow growth in the first half of the year.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management


April 8th, 2013 Business Market Update

Today, we are seeing more upside in the Japanese markets as the asset buying program began in earnest.  The Nikkei Index rose another 2.8% overnight, bringing the upside move over the past 10 days to about 10%.  Of course the corresponding downside in the Yen at around 6% would suggest the race to the bottom (currency wise) is on.

Europe is trending higher on some positive German Industrial Output numbers for February and markets there are up about half a point at midday.

On a sad note, former British Prime Minister Margaret Thatcher has passed away at age 87 from a stroke.  The Russians dubbed her the Iron Lady because of her strong personality and relentless negotiating abilities.  She took the UK economy in the late 70’s which was on the verge of collapse and not only turned it around but changed in many ways how the country has been governed to date.  Her relationship with the US and the rest of Europe was strong and she will be remembered as one of the strongest PM’s in UK history.  RIP.

Moving to the North America, futures are higher by about a quarter point on the Asian and Euro news and the start of earnings season today.  Forecasts are for more surprises to the upside than down and for the top line to continue its decline.  If we do get some upside surprises to the top line we very could see the market continue to rally higher against the weaker economic number that were released last week.  Looking at the Employment numbers from Friday, there were a few things that stood out:

  • ·         The underemployment rate fell from 14.3% to 13.8%.  People are in jobs they want to be in.
  • ·         Self-Employed and small business saw increases which, in my view is very positive.
  • ·         The workforce continues to shrink and rightly so as the boomer demographic is retiring thus skewing the unemployment numbers.
  • ·         Last month was revised higher causing the raw number to be much better than announced.

In Canada the numbers were terrible vs. the estimates in raw form, but again the self-employed (small business) saw an increase in the month by 39000.

At the end of the day it is one month, and we shall see if the trend continues but for now we shall stay the course.

Gold is down a couple of bucks trading at 1573, oil is up more than half a point to 93.30 and the Loonie is flat at 98.25.

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

Portfolio Manager & Branch Manager


ECB May Cut Interest Rates, Jobs In Canada Down

This morning we will see lighter volume in North America as the entire Eastern seaboard is getting pummeled by this storm.  NYC is to get pounded and based on that many traders will stay home today.  The same will hold true for Toronto.

With that said, Europe is still operating and is up about a half a point at midday.  The region, after a couple of weeks of selling, rebounded today after the head of the ECB suggested that interest rate cuts are possible to continue to stimulate the economy.  Also, China continues to stabilize and grow which is positive for the world economies but the risk of inflation is apparent again as growth accelerates.  Also, EU leaders agreed yesterday that they will seek a more accommodative trade deal with the US and have drafted a joint statement that has been sent to the Whitehouse for discussion.

In North America, futures are just slightly higher this morning.  Canadian Employment numbers came out this morning and the news was not good.  In January, 22000 jobs were lost vs. estimates of an additional 5000.  Also, December’s big plus 40000 jobs was revised down to 31000.  The actual unemployment rate fell to 7.00% but due to people coming out of the workforce altogether not from job creation.  We also got January Housing Starts for January and once again we saw a fall off from the previous month to 160000 units.  That is down from 197000 in December and 201000 in November.  While the US is stabilizing and seeing growth in housing and employment, Canada is stalling with the housing market as the main driver in my opinion.

Commodities are mixed this morning with Gold off a couple of bucks and oil up about a quarter point.

Courtesy of:

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