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Monthly Archives: December 2011

Terry Broaders

Weekly Update December 16 2011

“If We Do Not Wrap Up a Little Love With Our Christmas Gift What Is The Use” -Bob Edwards

 

TSX – Strong Close To Down Week

Mining stocks helped push the Toronto stock market to a strong gain Friday as metal prices recovered from losses earlier in the week. But Research In Motion was a weight on the TSX as the BlackBerry maker’s shares tumbled $1.83 or 11.58% to $13.97 after it disappointed investors with much lower profits and an announced delay until late next year for delivery of its new generation of BlackBerrys to consumers.  RIM reported a third-quarter net profit of only US$256 million, compared with $911 million for the same period last year.  The S&P/TSX composite index gained 130.96 points to 11,635.38 while the TSX Venture Exchange gained 21.18 points to 1,426.11. The Canadian dollar lost 0.12 of a cent to 96.43 cents US and New York markets turned lower on concerns about worsening economic conditions in Europe.  The Dow Jones industrial index dipped 2.57 points to 11,866.24. The Nasdaq composite index gained 14.32 points to 2,555.33 and the S&P 500 index was ahead 3.9 points to 1,219.65.

Despite the positive showing Friday, it was another negative week for the TSX, which fell 399 points or 3.31% as worries about the European debt crisis vied for attention with improving economic reports. “The debate going on right now is Europe and the risks of the unknown with the banking crisis versus the economic data, especially out of the U.S. which has been better than expected,” said Mark Bayko, portfolio adviser, U.S. and International Equities, RBC Dominion Securities.  American markets had been higher in the morning against a backdrop of positive U.S. data, including a report Thursday showing the number of people applying for unemployment benefits dropped sharply last week to the fewest since May 2008. Traders had also been encouraged by two strong regional manufacturing reports.

The TSX closed at 11635, down 399 points or -3.32% over the past week. YTD the TSX is down -13.44%.

The DOW closed at 11816, down 318 points or -2.61% over the past week.YTD the DOW is up +2.49%.

The S&P closed at 1219, down 36 points or -2.86% over the past week.YTD the S&P is down -3.10%.

The Nasdaq closed at 2555, down 92 points or -3.48% over the past week.YTD the Nasdaq is down -3.69%.

Gold closed at 1597, down 148 points or -8.48% over the past week.YTD gold is up +12.39%.

Oil closed at 93.53, down -6.30 points or -6.3% over the past week.YTD oil is up +1.98%.

The CAD/USD closed at 0.9643, down 0.02 points or -2.03% over the past week.YTD the CAD/USD is down -3.79%.

 

Sources: Bloomberg, Investment Executive, Advisor Analysis

Terry Broaders

Weekly Update December 9 2011

“Will You Love Me In December As You Do In May” -James Walker

Markets Up As European Leaders Agree To New Treaty

The markets closed higher Friday as the European Union moved to establish a new treaty that aims to more closely integrate the finances of member countries.  The S&P/TSX composite index gained 82.95 points to 12,034.75 after most members of the European Union signed on to a deal to ensure there is no repeat of the current European debt crisis. Britain was the lone holdout, arguing the treaty wasn’t in its best interest.  The Canadian dollar reversed early weakness and rose 0.4 of a cent to 98.19 cents US.  U.S. markets surged as the Dow industrials gained 186.56 points to 12,184.26.  The new eurozone treaty calls for participating governments to have balanced budgets, which is calculated as a structural deficit no greater than 0.5% of gross domestic product and will require constitution amendments to include such a requirement. An unspecified “automatic correction mechanism” would punish countries which break the rules. In addition, countries that run deficits larger than 3% would face sanctions.

Analysts said while the treaty proposal didn’t meet everyone’s expectations, it certainly represented progress. “We have been far enough down this road to realize that one meeting isn’t going to solve everything,” said Colin Cieszynski, market analyst at CMC Markets Canada. “At least this time around, they seem to have gotten to the point where they have taken it fairly seriously, they have brought in real measures that have to be taken care of and it looks like they’re trying to accelerate the ratification process.” Meanwhile, many think that a solution to the debt crisis can only come if the European Central Bank takes a more active role, possibly by buying up more government debt in the markets. It currently buys bonds in the markets, but only reluctantly and in small quantities.

-The TSX closed at 12035, down 40 points or -0.33% over the past week. YTD the TSX is down -10.47%.

-The DOW closed at 12184, up 165 points or +1.37% over the past week. YTD the DOW is up 5.24%.

The S&P closed at 1255, up 11 points or +0.88% over the past week. YTD the S&P is down -0.16%.

-Gold closed at 1717, down 29.00 points or -1.66% over the past week. YTD gold is up 20.91%.

-Oil closed at 99.41, down 1.72 points or -1.70% over the past week. YTD oil is up 9.01%.

The CAD/USD closed at 0.982, up 0.001 points or +0.10% over the past week. YTD the CAD/USD is down -2.32%.

Souces: Bloomberg, Investment Executive

Anthony Sabti

Centrals Banks Come Together, RRSP Survey Results

North American markets had a strong week after an announcement that the Bank of Canada and other major central banks would provide added support to the global financial system. 

 
On Tuesday, Canada’s central bank, along with the Bank of England, the Bank of Japan, the European Central Bank, the U.S. Federal Reserve and the Swiss National Bank came together “to enhance their capacity to provide liquidity support to the global financial system.”

 
The central banks are making it cheaper for banks to get U.S. dollar liquidity when they need it, starting next Monday. They are also taking steps to ensure banks can get ready money in any currency if market conditions warrant.

 
The possibility that one or more European governments might default on debt has raised fears of a shock to the global financial system that would lead to severe losses for banks and a contraction in lending.

 
On Friday, Germany’s Angela Merkel stressed the need for great economic unity within the euro zone as leaders prepare to meet next week to discuss an agreement for greater fiscal co-operation.  At the same time, Italian and French government bond yields rose – underscoring that the solution to the debt crisis will need more than talk about the need for agreements.

 

RRSP Survey

An annual Investors Group survey found that just fewer than 6 million Canadians contributed to an RRSP in 2010, down 0.2% from 2009. 

Out of the total tax-base, 93% of filers were eligible to contribute in 2010, but only 26% did.  83% of those planning to make an RRSP contribution plan to contribute at least as much as they did last year
The good news is that total contributions rose by 2.6% to $33.9 billion. The bad news is that this total represented about 5.1% of the total room available, down from 5.4% used in 2009.
 

Looking at contributions by city, Calgary had the highest median contribution ($3,900), followed by Vancouver ($3,400) and Toronto ($3,380).  The lowest median contributions were made in St. Catharines-Niagara ($2,240) and Barrie, Ontario ($2,250).

 
Market Results (as of December 2, 2011)

 
-The TSX closed at 12075, up 613 points or 5.35% over the past week. YTD the TSX is down -10.18%.

 
-The DOW closed at 12019, up 787 points or 7.01% over the past week. YTD the DOW is up 3.81%.

 
The S&P closed at 1244, up 85 points or 7.33% over the past week. YTD the S&P is down -1.11%.

 
-Gold closed at 1746, up 60.00 points or 3.56% over the past week. YTD gold is up 22.87%.
 

-Oil closed at 101.13, up 4.36 points or 4.51% over the past week. YTD oil is up 10.27%.
 

-The CAD/USD closed at 0.981, up 0.0275 points or 2.88% over the past week. YTD the CAD/USD is down -2.15%.

 

Sources: The Globe & Mail, Advisor.Ca