October 8th, 2013 Business and Market Update

Asia was higher overnight by about a half a point on no real news other than bargain hunters coming back into the market after a few days of selling.

Europe is off about a quarter point this morning on news of slower German exports in August.

In North America, the focus is still on the budget and debt ceiling impasse in the US Congress.  There was some movement yesterday suggested by the White House that there could be some short-term increase in the debt ceiling to avoid default.  At the same time some of the far right Reps are suggesting that an increase in the debt ceiling is not required as long as interest payments and other immediate costs are met.  Of course the downside would be all of the services that need funding and where they would rank as to priority.  The fact that there are more than 4 million transactions a day that are performed by the government trying to prioritize them would be virtually impossible.  Also, other nations and economic associations including the IMF have chimed in today suggesting a default on US debt would throw the world into deep recession.  At some point the kids in Washington will get it.

US futures are trading higher by a about a quarter point as markets continue to look at this fight as political only.

Canada is higher in the pre-market by about a quarter point on some positive housing start numbers for August.

Gold is off by 3.00 to 1322, oil is up three quarters of a point to 103.77 and the loonie is flat at 96.90.  The ten year bonds in both the US and Canada are relatively flat this morning at 2.64% and 2.58% respectively.

Lastly, the Canadian government determined that Manitoba Telecom cannot sell its interest in Allstream while in the same breath would allow foreign carriers into the country to compete.  Can you say confusion!  Also, US corporate raider Carl Icahn has disclosed that he has amassed a 6% ownership position in Talisman Energy which has the takeover rumors once again making headlines.  The company has been a lacklustre performer for the past several years but does have some prime energy interests in Canada and a market cap of more than $13bn.  We shall see where this goes.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management