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

www.canaccord.com