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Monthly Archives: August 2014

Terry Broaders

Weekly Update August 26 2014

“Simplicity Is The Ultimate Sophistication” -Leonardo da Vinci

 

TSX Slips Amid Solid RBC Results

The Toronto stock market closed lower Friday as the financial sector failed to find lift from record earnings at Canada’s biggest bank. The S&P/TSX composite index dropped 20.54 points to 15,535. The RBC profit amounted to $1.64 per share, eight cents ahead of estimates. The other major Canadian banks report next week and “it’s set up for them pretty well to make some money,” said Gareth Watson, vice-president, investment management and research, Richardson GMP.  The Canadian dollar was unchanged at 91.37 cents US as the consumer price index declined 0.2 per cent month over month in July and retail sales for June jumped 1.1%. U.S. markets were mainly lower as U.S. Federal Reserve chairwoman Janet Yellen offered no signal that she’s altered her view that the economy still needs Fed support from interest rates that have been near zero since the financial crisis. The Dow Jones industrials fell 38.27 points to 17,001.22, while the Nasdaq gained 6.45 points to 4,538 and the S&P 500 index edged 3.97 points lower to 1,988.

 

RBC Says Rising Interest Rates Would Cool Housing Market

RBC Economics says higher interest rates will put a strain on the Canadian housing market in 2015 and “substantially” moderate prices increases. In its latest Canadian housing forecast, the bank says Canada’s current historically low interest rates are not “sustainable” and it forecasts longer-term interest rates will rise by the end of the year in anticipation of a return to tightening mode by the Bank of Canada in 2015. RBC says if current rates rise, it anticipates home resales to fall by 0.9% to 463,100 units next year following an increase of 2.1% to 467,200 units in 2014, while it sees home prices increasing just 1.1% in 2015, compared with a jump of 4.3% this year. RBC describes those developments as a cooling not a crash in the housing market, which is supported by a variety of other factors, including steady immigration rates and good employment outlook. The report said condo construction, particularly in the major cities, will be one of the main reasons the housing market will slow in 2015 as more units become available. It cautioned that although there will be slowdown in 2015, the big impact on the Canadian housing market will be likely not be seen until 2016 once higher interest rates are “normalized.”

Market Update as of August 22 2014

The TSX closed at 15536, up 232 points or 1.52% over the past week. YTD the TSX is up 14.05%.

The DOW closed at 17001, up 338 points or 2.03% over the past week. YTD the DOW is up 2.56%.

The S&P closed at 1988, up 33 points or 1.69% over the past week. YTD the S&P is up 7.58%.

The Nasdaq closed at 4539, up 74 points or 1.66% over the past week. YTD the Nasdaq is up 8.67%.

Gold closed at 1281, down -25.00 points or -1.91% over the past week. YTD gold is up 6.40%.

Oil closed at 93.57, down -3.45 points or -3.56% over the past week. YTD oil is down -5.11%.

The USD/CAD closed at 1.09456, up 0.0050 points or 0.46% over the past week. YTD the USD/CAD is up 2.95%.

 

Sources: Bloomberg; RBC; Investment Executive; advisor.ca

Terry Broaders

Weekly Update August 19 2014

 

We Had It All, Just Like Bogie and Bacall” -Bertie Higgins

TSX Ends Little Changed

North American markets came under pressure from a worsening in the Ukraine-Russia crisis. On Friday the S&P/TSX composite index climbed 13.06 points to 15,304.24. But the Dow Jones industrials closed down 50.67 points to 16,662.91, while the Nasdaq gained 11.93 points to 4,464.93 and the S&P 500 index slipped 0.12 of a point to 1,955.06. Markets backed off after NATO said that Russian military vehicles crossed into Ukraine during the night and the Ukrainian president said most of the force was quickly destroyed by his troops. Russia denied any incursion. The report persuaded traders to seek safety but the Canadian dollar was higher amid strong revised jobs data. The loonie rose 0.12 of a cent to 91.84 cents US as Statistics Canada said the economy added 42,000 positions last month. The agency said earlier this week that it had discovered an error in its jobs data originally released last Friday showing the economy had added a meagre 200 jobs.

 

CRA Cracks Down On Biz Owners “Zapping” Sales Records

The consequences are about to get pricey for businesses using technology to avoid paying all of their taxes. After an eight-month awareness campaign about electronic suppression of sales software, new monetary penalties and criminal offences under the Excise Tax will come into effect in September. Revenue Minister Kerry-Lynne Findlay said that small and medium-sized businesses are the economic drivers of Canada. She says the underground economy does give an unfair advantage to those who show a lack of respect for Canada’s tax laws. ESS software or “zapper” software selectively deletes or changes sales transactions in point-of sale-systems like cash registers and business accounting systems. That means there is no record of the original transaction and the business is able to under-report their revenue and avoid paying the full share of their GST, HST and income taxes.

 

Market Update as of August 15 2014

The TSX closed at 15304, up 108 points or 0.71% over the past week. YTD the TSX is up 12.35%.

The DOW closed at 16663, up 109 points or 0.66% over the past week. YTD the DOW is up 0.52%.

The S&P closed at 1955, up 23 points or 1.19% over the past week. YTD the S&P is up 5.79%.

The Nasdaq closed at 4465, up 94 points or 2.15% over the past week. YTD the Nasdaq is up 6.89%.

Gold closed at 1306, down -6.00 points or -0.46% over the past week. YTD gold is up 8.47%.

Oil closed at 97.02, down -0.57 points or -0.58% over the past week. YTD oil is down -1.61%.

The USD/CAD closed at 1.089552, down -0.0078 points or -0.71% over the past week. YTD the USD/CAD is up 2.48%.

 

Sources: Bloomberg; Investment Executive; advisor.ca

Terry Broaders

Weekly Update August 12 2014

“Those Who Fight Corruption Should Be Clean Themselves” -Vladimir Putin

 

Markets Higher On Easing Ukraine Tension

The Toronto stock market closed higher Friday as traders hoped for an easing of tensions between Russia and Ukraine. The S&P/TSX composite index was up 77.88 points to 15,196.31, after Russia’s Interfax reported that Russia had ended military exercises near the Ukraine border. The Canadian dollar dropped 0.42 of a cent to 91.15 cents US as Statistics Canada reported that the economy created a paltry 200 jobs during July. Economists had generally expected that 20,000 jobs would be created.  U.S. indexes surged on the report with the Dow industrials ahead 185.66 points to 16,553.93, the Nasdaq gained 35.93 points to 4,370.90 and the S&P 500 index edged up 22.02 points to 1,931.59.  The Russia/Ukraine standoff is the primary focus for investor worry as traders considered the odds of Russia invading its neighbor in order to prop up Ukrainian rebels. There is also concern about how sanctions and countersanctions could derail a still-fragile economic recovery in Europe. The Toronto market ended the week more or less flat, with a 19 point loss which still left the TSX up 11.56 per cent year to date. The Dow industrials ended the week with a gain of 60.56 points or 0.37 per cent.

 

Russia Bans Western Food Imports For a Year

Russia will ban fruit, vegetables, meat, fish, milk and dairy imports from the U. S., the European Union, Australia, Canada and Norway, Prime Minister Dmitry Medvedev told a government meeting on Thursday. The decision follows a decree signed by President Vladimir Putin ordering the government to ban or limit food imports from countries that imposed sanctions on Moscow for its support of rebels in eastern Ukraine and the annexation of Crimea.  “There is nothing good in sanctions and it wasn’t an easy decision to take, but we had to do it,” Medvedev said.  The ban is valid from Aug. 7 and will last for one year, he said. Canada’s agricultural exports to Russia totalled $428 million in 2013 according to Statistics Canada. Canadian pork producers make up most of that at exports of $260 million. Canada’s worldwide pork exports total $3.2 billion.

 

Sources: Bloomberg; Investment Executive; advisor.ca