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Monthly Archives: December 2015

Terry Broaders

Weekly Update December 21 2015

“We May Have All Come On Different Ships, But We’re In The Same Boat Now” -Martin Luther King

 

TSX Outperforms Friday Despite Oil Decline

Canada’s main stock market index managed to close higher Friday while most of the rest of the world’s markets reported losses. The narrow gains came despite further decline in oil prices and global economic concerns. Wall Street closed sharply lower with oil the dominant drag. Asian and European markets also closed with losses but many closed higher for the week following the Fed’s interest rate decision which removed one element of uncertainty. The S&P/TSX Composite Index closed up 14.37 or 0.11%. The metals and mining sector of the TSX rose 6.76%, while global gold climbed 3.10% and materials gained 2.81%. Meanwhile, energy stocks closed 1.93% higher. Meanwhile, the loonie rose 0.03 of a U.S. cent to 71.71 cents US, a day after slipping below 72 cents US for the first time since May 2004. In New York, the Dow Jones average of 30 stocks plummeted 367.29 points to 17,128.55, the broader S&P 500 index gave back 36.34 points to 2,005.55 and the Nasdaq fell 79.47 points to 4,923.08.

 

U.S. Citizens Who Owe U.S. Tax Could Lose Passports

US citizens living outside the United States will need to become more vigilant about filing US taxes and having a US Social Security number starting Jan. 1, 2016. The alternative will be to risk losing one’s passport under a new section of the Internal Revenue Code. After several failed attempts in the past few years to enact a similar law, Congress on Dec. 3, 2015, passed a highway funding bill that gives the IRS and State Department some significant new powers: under new IRC § 7345, the IRS gets the ability to share information on delinquent tax accounts with the State Department and the State Department gains the authority to deny or revoke the passports of US citizens who have over $50,000 in tax debt or no Social Security number associated with their passport.1 President Obama signed the bill into law on Dec. 4, 2015, and it takes effect Jan. 1, 2016.
Groups representing US citizens living outside the United States and the press have, appropriately, focused on the State Department’s new power to deny and revoke passports when a US citizen has an outstanding tax debt of more than $50,000. These commentators have astutely pointed out that both a lack of clarity on how the statute will be enforced and ambiguities in the term “seriously delinquent tax debt” may mean that many expatriate Americans and dual citizens will be caught unawares when the State Department revokes or refuses to renew a passport because of a tax debt.

 

Sources: Bloomberg; Investment Executive;  Conference Board of Canada; advisor.ca,

Terry Broaders

Weekly Update December 15 2015

“There Is No Chance The iphone Is Going To Get Significant Market Share” -Steve Balmer, 2007, Microsoft CEO

 

Pain on The Markets As Oil Falls Below U.S.$36

Another big drop in the price of oil sent North American equity markets into sharp retreat Friday in a sell-off that also took the commodity-sensitive Canadian dollar below 73 cents for the first time since mid-2004.In Toronto, the S&P/TSX composite index lost 1.7% of its value, closing down 226.64 points to settle at 12,789.95. The Canadian dollar, which has hit several new 11-year lows since it closed last week at 74.76 cents U.S., was down another 0.59 of a cent Friday at 72.77 cents U.S.
In New York, the Dow Jones average plunged 309.54 points to 17,265.21, while the broader S&P 500 fell 39.86 points to 2,012.37 and the Nasdaq shed 111.70 points to 4,933.47. Traders headed for exits as oil fell below US$36 a barrel in the wake of a report by the International Energy Agency that said the global oversupply of crude would continue until late next year. The January contract for benchmark U.S. crude oil was down $1.14 at US$35.62 a barrel.

 

Morneau Increases Minimum Down Payment For Homes Over $500K

Major changes to the minimum home down payment were announced Friday by Finance Minister Bill Morneau. The amount homebuyers must put forward as a down payment on houses over $500,000 will now be 10%. Homes under $500,000 will still only require 5% down payment.  This is a game changer especially in Vancouver and Toronto where a small condo often costs over $500,000. It’s a move designed to cool off the booming real estate market in some of Canada’s biggest cities.  The stiffer down payment requirement is one of three new measures targeting the stability of the housing market. The Finance Department has tightened mortgage rules on several occasions in recent years in an effort to weed out marginal buyers and excessive speculation in the housing market. One of the changes saw the federal government reduce the maximum amortization period for government-insured mortgages to 25 years from 30 years. The Bank of Canada has also expressed concerns that too many Canadians risk becoming over-extended, especially once interest rates begin to rise.   Note that the down payment is still 5% on the first $500k, even if the home cost is $700k.  For example if you buy a 700k home under the old rules, a 5% minimum down payment is $35k.  With the new rules it would be $25k (5%) on first 500k plus $20k (10%) on the next 200k = a 45k minimum down payment. So a buyer would need to come up with another $10k.  On a $999,999 home, the minimum goes from $50k to $75k; another $25k is required.

 

Market Update as of December 11 2015

North America
The TSX closed at 12790, down -567 points or -4.24% over the past week. YTD the TSX is down -13.31%.
The DOW closed at 17265, down -583 points or -3.27% over the past week. YTD the DOW is down -3.19%.
The S&P closed at 2012, down -80 points or -3.82% over the past week. YTD the S&P is down -2.24%.
The Nasdaq closed at 4934, down -208 points or -4.05% over the past week. YTD the Nasdaq is up 4.38%.
Gold closed at 1076, down -10.00 points or -0.92% over the past week. YTD gold is down -8.19%.
Oil closed at 35.51, down -4.60 points or -11.47% over the past week. YTD oil is down -32.61%.
The USD/CAD closed at 1.37352, up 0.0367 points or 2.74% over the past week. YTD the USD/CAD is up 17.04%.

Europe/Asia
The MSCI World closed at 1664, down 14.00 Points or -0.86% over the past week.  YTD the MSCI World is down -2.68%.
The Euro Stoxx 50 closed at 3203, down 128.00 points or -3.83% over the past week.  YTD the Euro Stoxx 50 is up 1.80%.
The FTSE closed at 5953, down 285.00 points or -4.58% over the past week.  YTD the FTSE is down -9.34%.
The CAC closed at 4550, down 165.00 points or -3.50% over the past week.  YTD the CAC is up 6.48%.
The DAX closed at 10340, down 412.00 points or -3.83% over the past week.  YTD the DAX is up 5.45%.
The Nikkei closed at 19231, down 274.00 points or -1.40% over the past week.  YTD the Nikkei is up 10.20%.
The Shanghai closed at 3435, down 90.00 points or -2.56% over the past week.  YTD the Shanghai is up 6.18%.

 

Sources: Bloomberg; Investment Executive;  Conference Board of Canada; advisor.ca,

Terry Broaders

Weekly Update December 8 2015

“Guns and Bombs, Rockets and Warships Are All Symbols of Human Failure” – President Lyndon B. Johnson

 

TSX Index Lags N.Y. Markets as U.S. Jobs Data Impresses

North American stock markets finished the Friday session higher led by a gain of nearly 370 points on the Dow after another month of solid U.S. jobs growth. Toronto’s S&P/TSX composite index was up 34.10 points to 13,358.77, ending the week of trading at practically the same level it began. The Canadian dollar was down 0.21 of a cent at 74.76 cents U.S.
Wall Street posted even bigger gains during the session helped by November data, which showed a gain of 211,000 jobs in the United States, suggesting that an interest rate hike is in the cards from the Federal Reserve at its meeting later this month. The Dow Jones closed ahead up 369.96 points at 17,847.63 while the broader S&P 500 index advanced 42.07 points to 2,091.69 and the Nasdaq rose 104.74 points to 5,142.27. “I think the Fed wants to at least start the path towards normalizing rates, but the market is satisfied that it will be done in a very gradual fashion,” said Patrick Blais, managing director and senior portfolio manager at Manulife Asset Management. “We’re sitting in a golden scenario where the U.S. economy is strong but not too strong.”  Canada’s economy is facing a different scenario.  Statistics Canada’s latest monthly jobs survey found the economy shed 35,700 jobs in November, while the unemployment rate crept higher by one tenth of a percentage point to 7.1 per cent.

 

Consumer Confidence Moves Up in November

Consumer confidence in Canada improved in November boosted by the first increase in Alberta in six months and a big jump in Atlantic Canada. The Conference Board of Canada said November 3 its index of consumer confidence rose to 103.1, up from 95.3 in October. The jump was the biggest gain since March. The increase came as the index rose in Atlantic Canada, Quebec, Ontario, British Columbia, and Alberta. However, it slipped lower in Saskatchewan and Manitoba. Conference board senior economist Julie Ades noted there can be some volatility from month to month. “A lot of the recent weakness in consumer confidence is attributed to people’s perception of future job prospects in their community,” Ades said.  Alberta, which has been hit hard by the downturn in the price of oil, saw a five point increase to 50.5, however the index was still nearly 50 points below its average for 2014.
Atlantic Canada saw the index increase 25.2 points last month to 156.4 for November as the balance of opinion in the region improved on all four of the survey’s questions. The index is based on how respondents perceive their current finances, future finances, and future job prospects, and whether they think it is a good time to make a major purchase.  Overall, those questioned were more positive about their financial situation as 16.9% said they were better off now than six months ago rose, compared with 16.5% who responded that way in October.  The proportion of those who said they expect to be financially better off six months from now increased to 23.1% from 21.6%. Those who said they expect to be worse off slipped to 16.5% from 17.2%.  The survey was conducted between Nov. 2 and 12.

 

Market Update as of December 4 2015

North America
The TSX closed at 13357, down -11 points or -0.08% over the past week. YTD the TSX is down -9.47%.
The DOW closed at 17848, up 34 points or 0.19% over the past week. YTD the DOW is up 0.08%.
The S&P closed at 2092, up 2 points or 0.10% over the past week. YTD the S&P is up 1.65%.
The Nasdaq closed at 5142, up 14 points or 0.27% over the past week. YTD the Nasdaq is up 8.78%.
Gold closed at 1086, up 13.00 points or 1.21% over the past week. YTD gold is down -7.34%.
Oil closed at 40.11, down -1.60 points or -3.84% over the past week. YTD oil is down -23.88%.
The USD/CAD closed at 1.336859, up 0.0006 points or 0.05% over the past week. YTD the USD/CAD is up 13.92%.

Europe/Asia
The MSCI World closed at 1678, down 22.00 Points or -1.50% over the past week.  YTD the MSCI World is down -1.84%.
The Euro Stoxx 50 closed at 3331, down 158.00 points or -4.54% over the past week.  YTD the Euro Stoxx 50 is up 5.86%.
The FTSE closed at 6238, down 137.00 points or -2.15% over the past week.  YTD the FTSE is down -4.99%.
The CAC closed at 4715, down 215.00 points or -4.37% over the past week.  YTD the CAC is up 10.35%.
The DAX closed at 10752, down 542.00 points or -4.80% over the past week.  YTD the DAX is up 9.65%.
The Nikkei closed at 19505, down 379.00 points or -1.91% over the past week.  YTD the Nikkei is up 11.77%.
The Shanghai closed at 3525, up 89.00 points or 2.58% over the past week.  YTD the Shanghai is up 8.98%.

 

 

Sources: Bloomberg; Investment Executive;  Conference Board of Canada; advisor.ca,

Odette Morin

2016 TFSA limit reduced to $5500

 

It’s official. Finance Minister Bill Morneau announced yesterday that for 2016, the TFSA limit will be brought back to $5500. The 2015 limit will remain at $10,000.

If you have already signed a form to process your contributions in January, we will adjust the contribution amount to $5500 to ensure that you stay within the limit.

If you have not made your 2015 TFSA contribution, $10,000 will be added to your TFSA carry forward amount. You can maximize that limit or past years, anytime in the future.

Please remember that you can invest your TFSA as a long-term investment or save it for the short-term depending on your needs and personal situation.

Please contact us if you have any questions regarding your TFSA contributions and personalized planning.

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Terry Broaders

Weekly Update December 1 2015

“My IQ is One of the Highest and You All Know It.” -Donald Trump

 

TSX Slips Friday after Oil, Gold Slump

Canada’s main stock index fell on Friday, led by weakness in gold stocks after gold fell to the lowest in five years, while energy shares fell after fresh concern about China helped drive crude oil prices lower. However, the Canadian equity market, one of the worst-performing in the world this year amid a slump in commodities prices, is poised to beat its U.S. peers for the first time since 2010 next year as investors have gotten overly pessimistic, according to BMO Capital Markets Chief Investment Strategist Brian Belski.  “Canada is down, but not out,” Mr. Belski said in a 2016 market outlook report to clients Nov. 25. “The recovery we expected in the fourth quarter has only been delayed and is one of the main reasons we believe Canada will be a surprise outperformer in 2016. Any positive news stemming from emerging markets, Europe and commodity prices will likely be a strong positive tailwind for Canadian stocks.” The Standard & Poor’s/TSX Composite Index fell 56.95 points, or 0.42 per cent, to 13,368.24 at in Toronto. It has dropped 8.6 per cent this year, trailed only by Singapore and Greece among developed markets.
U.S. stock markets closed three hours earlier following the Thanksgiving holiday on Thursday, with many traders taking the day off. The Dow Jones industrial average fell 14.9 points, or 0.08 per cent, to 17,798.49, the S&P 500 gained 1.24 points, or 0.06 per cent, to 2,090.11 and the Nasdaq Composite added 11.38 points, or 0.22 per cent, to 5,127.53.

 

Most Canadians Don’t Have A Budget

Many Canadians can improve their financial well-being simply by following a budget, says a report by the Financial Consumer Agency of Canada. Though 93% of people who have a budget stick to it most of the time, only 46% of people have a budget. Older Canadians, aged 60 years or older, are the most likely (95% or more) to say they always or usually adhere to their budget.  Completing post-secondary education goes hand-in-hand with better financial management and well-being.  The study also reports that, while two-thirds of working people are preparing financially for retirement, almost the same proportion say they don’t know how much they should save.  On the bright side, many Canadians are keeping up with bills and payments and saving for their children’s education. Two-thirds of Canadians check their account balances daily or weekly. The most common debts people hold are mortgages, credit cards and lines of credit.

 

Black Friday Wisdom from the Money Queen

“No Deal is better than a Bad Deal”. Do your homework before buying especially online from the States. With the rise of the US dollar, buying from the US is hardly worth it anymore. Americans are actually coming to Canada to get the bargains. And never forget: It does not matter if it is 75% off, if you don’t need it, you shouldn’t buy it. Happy wise shopping!

LINK

Money Queen Wisdom

 

Sources: Bloomberg; Investment Executive;  advisor.ca,