October 2nd, 2013 Business and Market Updates

Some decent upside in China overnight on the back of the US markets upside move yesterday.  Japan on the other hand fell about 2% due to the an increase in Sales Tax.

Mario Draghi speaking this morning is suggesting that the Euro recovery is continuing albeit at a slow pace.  He is confident the trend will continue and will do all he can to maintain or increase the current pace.  With all that said he left rates alone at 0.5% which caused some weakness in markets there.  The big index is down about a half a point.  Also, our Italian friends have done another about face today as the coalition members governing the country have now decided to continue on as they were.  On Monday if you recall, the coalition was dissolving which would have led to another election.  It would seem that the Italian people were not having any of that and the government listened.  Hmmmm, make you think of a certain government to the south of us that may take some notice of the peoples demands over their own posturing?

The US futures are off about a half a point on the ADP Employment numbers which came in at 166000 vs. 180000 estimated for September.  Also August was revised lower.  These numbers will play into the Non-Farm Payrolls for September which are scheduled to be released (maybe) Friday.  I say maybe as one of the government agencies that has been shut down is the Bureau of Statistics.  Hopefully the work had been completed before Monday.

Canada is following the US lead and trending down about a half a point.

Gold is up about 14.00 to 1300.00, oil is off 7 cents to 101.63 and the loonie is down 13 bps to 96.69.  Debt markets are rallying into the employment numbers with the US and Canadian 10 year bonds yielding 2.63% and 2.54% respectively.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management




Europe Moving In The Right Direction

Today we are seeing some solid upside out of Europe, despite the possibility the UK may slip back into recession for the third time.  Mario Draghi, the ECB head, reiterated again at the World Economic Forum in Davos that he sees the Euro recovery to improve into the second half of the year.  Also driving Euro markets is the positive news out of Germany indicating business morale continues to rise.  Euro markets at midday are up about three quarters of a point.

Moving across the pond, US futures are stronger on the news out of Europe and continued positive earnings results as P&G, Honeywell, Kimberly Clark and Haliburton all beat estimates.  Futures are currently higher by about a quarter point.

Gold is off more the $10.00 this morning while oil continues to decouple and is up again today by about a half a point.

In Canada, a survey of analysts is suggesting the inflation target should get back into the 2% area in December but just which is the level the BOC would like it at.  Also, based on the fact the BOC in its statement earlier in the week suggested that it would not be moving to increase interest rates earlier than previously indicated caused a big slide in the Loonie yesterday which has brought our currency back to par with the USD.

Lastly, yesterday we had the tale of two companies yesterday.  Apple plummeted more than 10% on a revenue miss (earnings beat estimates) and dragged the entire sector down with it including RIM until news came out of China that hardware maker Lenovo suggested there would be some solid M&A opportunities concerning the stock.  The news caused the stock which did fall earlier in the day to finish higher.  With that said, it would seem the likelihood of a Chinese company buying the “Canadian Crown Jewel”,  to quote Steven Harper would be highly unlikely.  Also, I might suggest that the US government would have something to say as they still use the BB and national security could be compromised.  The saga continues…………..

Courtesy of:

Kenneth A. Dick, BA, CIM, CFP