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

www.glwm.ca

October 15th, 2013 Business and Market Update

Looks like there has been some movement over the weekend in Washington as hints of a deal are starting to emerge on the news wires this morning.  No details just yet but flat US futures are suggesting that something is brewing.  Stay tuned.

In Asia overnight, markets were higher by about a quarter point following the US rise on Friday and Monday and reacting to the positive news out of Germany on investor sentiment rising yet again.  Euro stocks are up about a half a point on the news.

Earnings season gets under way in earnest today as Coke and JNJ beat on both bottom and top line numbers.  Citigroup however missed estimates by a couple of cents with the hit coming from charges and fixed income trading.  That news caused the futures to pull back from higher levels earlier.

With a deal somewhat imminent in Washington, Gold has pulled back again this morning down more that 16.00 to 1260.  Oil is trading down a buck to 101.46 and the loonie is off 20bps to 96.46.  The US and Canadian 10 year bonds are mixed this morning with yields coming in at 2.71% and 2.62% respectively.

Lastly, Blackberry has put ads in papers worldwide to try and explain the current situation that they are in and how they are going to move forward.  To me it seems to be a desperate attempt to hold onto what they have.  We shall see how effective the ads turn out to be.

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

Branch Manager & Portfolio Manager | Independent Wealth Management

Canaccord Genuity Wealth Management

www.glwm.ca