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Monthly Archives: November 2016

Terry Broaders

Weekly Update November 29 2016

“Between Two Evils I Always Pick The One I Never Tried Before” – Mae West

TSX Flat While U.S. Markets Continue Rally

The Toronto Stock Exchange’s main index gained a meagre fraction of a point Friday, while major U.S. indexes hit record highs. The S&P/TSX composite index gained 0.24 of a point to 15,075.44. In New York, indices continued their rally and recorded all-time highs on a shortened trading day, closing at 1 p.m. ET, the day after the American Thanksgiving. The Dow Jones industrial average gained 68.96 points to 19,152.14, the S&P 500 was up 8.63 points to 2,213.35, and the Nasdaq composite rose 18.24 points to 5,398.92.

In commodities, the January crude contract fell $1.90 to US$46.06 per barrel and the December gold contract shed $10.90 to US$1,178.40 an ounce. January natural gas rose 5.5 cents to US$3.20 per mmBTU and December copper contracts were up 6.1 cents at US$2.67 a pound.  The Canadian dollar was at 73.93 cents US, down 0.19 of a U.S. cent.

 

 

Many Canadians On Shaky Financial Ground

An emergency fund is meant to be there in times of need, but a new survey suggests nearly half of Canadian homeowners would be ill prepared for a personal financial dilemma such as job loss. The poll released by Manulife Bank finds that 24% of those surveyed don’t know how much is in their emergency fund, 14% have not put away any funds and 9% have access to $1,000 or less. The remainder of those surveyed have up to $10,000 saved, with the average amount being $5,000. Manulife says among those polled, homeowners had an average of $174,000 in mortgage debt, with an average of 28% of their net income going toward paying off their home each month.

About half or 46% of those polled say they would have difficulty making their monthly mortgage payments in less than six months if their household’s primary income earner lost his or her job. Sixteen per cent say they would have financial difficulty if interest rates cause their mortgage payments to increase. The poll by Environics Research was conducted online with 2,372 Canadian homeowners from June 28 and July 8 of this year. Survey participants were between the ages of 20 to 69 with household income of $50,000 or more.

 

Sources: Bloomberg; Investment Executive;  advisor.ca

Terry Broaders

Weekly Update November 22 2016

“All The War Propaganda, All The Screaming And Lies And Hatred Comes Invariably From People Who Are Not Fighting” -George Orwell

TSX Edges Higher While New York Stock Markets Fall

The Toronto Stock Exchange made a slight advance Friday, while New York stock markets shed some of their worth following a tumultuous period after the U.S. presidential election. A lot of the post-Trump impact has now been priced in markets. The markets are now trying to digest what the long-term impact will be and whether this is the beginning of a new major trend based on Trump’s proposed policies.  Stock markets made modest movements in either direction on Friday.  In Toronto, the S&P/TSX composite index gained 37.94 points at 14,864.03. Meanwhile south of the border, markets registered modest declines. The Dow Jones industrial average fell 35.89 points to 18,867.93, the Nasdaq composite slid 12.46 points to 5,321.51, and the broader S&P 500 shed 5.22 points at 2,181.90.
The price of oil made meagre gains. The December contract rose 27 cents to US$45.69 a barrel. The January contract for crude oil, which traded at a higher volume, gained 38 cents to US$46.36 per barrel.  The price of gold, on the other hand, has plummeted to its lowest level since mid-February. The December gold contract fell $8.20 to $1,208.70 per ounce. It last closed below that on Feb. 16 at US$1,208.20.  Rising bond yields and increased expectations that the U.S. Federal Reserve will raise rates, potentially at a faster pace than previously anticipated, is putting pressure on gold prices. On Thursday, Fed chairwoman Janet Yellen hinted at a December interest rate hike when the central bank meets for two days starting Dec. 13. The Canadian dollar fell 0.04 of a U.S. cent at 74.00 cents US.

 

3 Ways Trump’s Victory Could Affect Canada

A Donald Trump administration, combined with a Republican-controlled Senate and House of Representatives, could have reverberations that will be felt by the Canadian economy for years. Here’s a look at what Trump’s victory could mean for various sectors of our economy.
Impact on energy
Remember Keystone XL and the plans to build the 1,900-kilometre pipeline from Alberta to Nebraska?  Trump has said he would “absolutely approve it, 100%.”  Still, when considering Trump’s propensity for categorical statements, one should keep in mind the details. He has said he wants a greater cut of the profits, but hasn’t explained what that means. There’s also TransCanada’s outstanding request for US$15 billion in damages after Obama’s rejection.  Trump is also regarded as a friend of U.S. fossil fuels, on record as favouring oil and gas drilling on federal lands. That could stifle appetite for Canada’s oil and gas production.
What about trade?
Our largest trading partner will soon be led by someone who has committed to ripping up NAFTA if it isn’t renegotiated. Any country can withdraw from the free trade agreement with six months’ notice. And with Republican control of both the legislative and executive branches, Trump is better positioned than past presidents who’ve made similar threats.  But some say he could face resistance from legislators in states that have reaped the benefits of the deal.
Softwood lumber
One of the first trade irritants that could test U.S.-Canadian relations is softwood lumber. A 10-year-old agreement that removed U.S. duties on Canadian softwood lumber expired last month. That paved the way for the possibility of steep taxes, which could result in layoffs throughout Canada’s forestry sector. Trump can expect to face pressure from the U.S. lumber lobby to implement such duties. In an era of rising protectionism, he may be emboldened to oblige.

 

WEEKLY MARKET WRAP-UP

North America
The TSX closed at 14864, up 309 points or 2.12% over the past week. YTD the TSX is up 14.44%.
The DOW closed at 18868, up 20 points or 0.11% over the past week. YTD the DOW is up 8.28%.
The S&P closed at 2182, up 17 points or 0.79% over the past week. YTD the S&P is up 6.75%.
The Nasdaq closed at 5322, up 85 points or 1.62% over the past week. YTD the Nasdaq is up 6.29%.
Gold closed at 1209, down -81.00 points or -1.23% over the past week. YTD gold is up 14.16%.
Oil closed at 45.61, up 2.20 points or 5.07% over the past week.YTD oil is up 23.10%.
The USD/CAD closed at 1.350679, down -0.0035 points or -0.26% over the past week. YTD the USD/CAD is down -2.38%.

Europe/Asia
The MSCI closed at 1707, up 6 points or 0.35% over the past week. YTD the MSCI is up 2.65%.
The Euro Stoxx 50 closed at 3021, down -9 points or -0.30% over the past week. YTD the Euro Stoxx 50 is down -7.56%.
The FTSE closed at 6776, up 46 points or 0.68% over the past week. YTD the FTSE is up 8.55%.
The CAC closed at 4504, up 15 points or 0.33% over the past week. YTD the CAC is down -2.87%.
DAX closed at 10665, down -3.00 points or -0.03% over the past week. YTD DAX is down -0.73%.
Nikkei closed at 17967, up 592.00 points or 3.41% over the past week. YTD Nikkei is down -5.61%.
The Shanghai closed at 3193, down -3.0000 points or -0.09% over the past week. YTD the Shanghai is down -9.78%..

 

Sources: Bloomberg; Investment Executive;  advisor.ca

Odette Morin

What to expect with Trump as the new US President?

New York, NY USA - July 16, 2016: Donald Trump speaks during introduction Governor Mike Pence as running for vice president at Hilton hotel Midtown Manhattan

After a long and bitter campaign, the Donald Trump Republican party has firmly taken control of Capitol Hill, winning the Presidency, the Senate and the House of Representatives. While portfolio managers were positioned for a Hillary Clinton victory, the markets have been positive to a clear, uncontested election result and a pro-business president.

The market rally that followed the election, was almost as shocking as Trump’s win.  The Dow futures were 700points down as the Trump majority was forming up.  However, U.S. stocks rose sharply at market opening the next day on speculation that Donald Trump and a Republican-controlled Congress will pursue business-friendly policies.  The markets will be watching closely to see how Trump starts putting policy specifics to his broad plans.

President-elect Trump’s policies will be very different from President Obama’s. The primary beneficiaries of the Trump victory will be defence, infrastructure, engineering/construction and more domestically focussed companies. We also expect Trump’s victory to be slightly positive for oil prices.

The markets will be closely watching now for signs that Trump adopts a statesmanlike tone and selects a credible cabinet. . Remember that while Trump is president, he does not have a free reign.  He is constitutionally constrained by congress consisting of the senate and the house of representatives.

We expect higher volatility than normal as we go through the end of the year and into the first quarter. That’s where remaining disciplined with your asset allocation is really important.

Don’t hesitate to contact us should you want to discuss this event as it relates to your portfolio.  Either myself, Terry, Anthony or Frank will be happy to speak with you.

Below are the before and after November 8 election markets numbers.

Nov 8             Nov 10        Percentage Change
TSX             14,656            14,744            +0.60%
Dow Jones  18,332             18,807            +2.59%
S&P 500       2139                2167             +1.31%
Gold            $1247               1258             -1.26%
CDN$          $0.7516USD    $74.22USD     -1.25%

 

 

 

 

Terry Broaders

Weekly Update November 8 2016

“Intimidation, Harassment and Violence Have No Place In a Democracy” -Mo Ibrahim

North American Markets Lower Ahead of Election

Uncertainty around the U.S. election continued to weigh on stock markets, pushing the S&P 500 to its ninth consecutive decline.
In Toronto, the S&P/TSX composite index gave back 74.17 points to close at 14,509.25. South of the border, the Dow Jones industrial average lost 42.39 points to 17,888.28, while the S&P 500 declined 3.48 points to 2,085.18. The Nasdaq composite was off 12.04 points at 5,046.37. The loonie was at 74.61 cents US, down 0.11 of a U.S. cent from Thursday’s close. The December crude contract fell 59 cents to US$44.07 per barrel and December natural gas was essentially flat at US$2.77 per mmBTU. December gold rose $1.20 to US$1,304.50 an ounce and December copper contracts were up two cents to US$2.27 a pound.

 

Canadian Economy Surprisingly Adds 44,000 Jobs

The economy gained 44,000 net new jobs in October but the gains were entirely in part-time employment, Statistics Canada said Friday. The overall increase was driven by 67,000 additional part-time jobs for the month, while the number of full-time jobs fell by 23,000. The unemployment rate held steady at 7% as more people entered the labour market. Economists had expected a loss of 10,000 jobs overall and the unemployment rate to remain unchanged, according to Thomson Reuters.  The increase in October follows a gain of some 67,000 jobs in September that saw gains in both part-time and full-time work. Compared with a year ago, there were 140,000 more jobs in October including a gain of nearly 16,000 full-time jobs and 124,000 part-time positions. For October, the goods-producing sector gained nearly 21,000 jobs, boosted by a gain of 24,000 in the construction industry. The natural resources sector also gained 10,000 jobs, its first notable increase since March 2015.

The services-producing sector added more than 23,000 jobs as wholesale and retail trade jobs climbed 19,000 and the “other services category” increased by 18,000. The educational services group climbed by 16,000. Ontario gained 25,000 jobs in October, while British Columbia increased 15,000. The number of jobs in Newfoundland and Labrador fell by 5,600.

 

WEEKLY MARKET WRAP-UP

North America
The TSX closed at 14509, down -274 points or -1.85% over the past week. YTD the TSX is up 11.71%.
The DOW closed at 17888, down -273 points or -1.50% over the past week. YTD the DOW is up 2.66%.
The S&P closed at 2085, down -41 points or -1.93% over the past week. YTD the S&P is up 2.01%.
The Nasdaq closed at 5046, down -144 points or -2.77% over the past week. YTD the Nasdaq is up 0.78%.
Gold closed at 1305, up 8.00 points or 2.27% over the past week. YTD gold is up 23.23%.
Oil closed at 44.12, down -6.19 points or -12.30% over the past week. YTD oil is up 19.08%.
The USD/CAD closed at 1.340381, up 0.0020 points or 0.15% over the past week. YTD the USD/CAD is down -3.13%.

Europe/Asia
The MSCI closed at 1667, down -28 points or -1.65% over the past week. YTD the MSCI is up 0.24%.
The Euro Stoxx 50 closed at 2955, down -124 points or -4.03% over the past week. YTD the Euro Stoxx 50 is down -9.58%.
The FTSE closed at 6693, down -303 points or -4.33% over the past week. YTD the FTSE is up 7.23%.
The CAC closed at 4378, down -171 points or -3.76% over the past week. YTD the CAC is down -5.59%.
DAX closed at 10259, down -437.00 points or -4.09% over the past week. YTD DAX is down -4.51%.
Nikkei closed at 16905, down -541.00 points or -3.10% over the past week. YTD Nikkei is down -11.19%.
The Shanghai closed at 3125, up 21.0000 points or 0.68% over the past week. YTD the Shanghai is down -11.70%.

 

Sources: Bloomberg; Investment Executive;  advisor.ca

Terry Broaders

Weekly Update November 1 2016

“One Can Find So Many Pains When The Rain Is Falling ” -John Steinbeck

TSX Little Changed As Miners Gain, Banks and Energy Slip

Canada’s main stock index fell on Friday, with a drop in oil prices weighing on energy stocks and heavyweight financial names also slipping. The index shed 1% on the week, after closing last week at a 16-month high. The Toronto Stock Exchange’s S&P/TSX composite index settled down 48.46 points, or 0.33%, at 14,785.29. Seven of the index’s 10 main groups ended in positive territory, although decliners outnumbered gainers by 1.35-to-1.  Oil prices settled below $50 and marked their biggest weekly loss in six weeks on concerns OPEC will not fully carry out a planned output cut, even as data showed U.S. oil drillers removed rigs from production for the first time since June.
U.S. stocks declined in a volatile session on Friday but were able to partially recover from a sharp drop spurred by news the FBI will review more emails related to Democratic presidential candidate Hillary Clinton’s private email use. Each of the three major indexes on Wall Street fell to session lows, with the S&P 500 dropping 1 percent in an hour, after FBI Director James Comey said in a letter to several congressional Republicans the agency had learned of the existence of emails that appeared to be pertinent to its investigation. The U.S. election is scheduled to take place in 11 days, on Nov. 8. The Dow Jones industrial average fell 8.29 points, or 0.05 percent, to 18,161.39, the S&P 500 lost 6.6 points, or 0.31 percent, to 2,126.44 and the Nasdaq Composite dropped 25.87 points, or 0.5 percent, to 5,190.10. For the week, the S&P 500 dipped 0.7 percent and the Nasdaq lost 1.3 percent, while the Dow managed a 0.1 percent gain.

 

Social Insurance Numbers – Interesting Facts

The SIN was created in 1964 as a client account number to help government administer the Canada Pension Plan and other employment insurance programs. In 1967, Revenue Canada (now Canada Revenue Agency) began using it for tax purposes.  As of March 31, 2014, Service Canada has stopped issuing the plastic SIN cards, to help protect people against identity theft. People now receive a paper Confirmation of SIN letter in the mail.
The card is used as a person’s identifier for work and investments, for paying taxes, contributing to a pension plan and to access government services. You need a SIN to work in Canada. An employer cannot pay you if you do not have a SIN.

The first digit of the SIN identifies the province where it was registered. 1 covers Atlantic Canada (Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland and Labrador), and overseas residents. 2-3 is used in Quebec. 4-5 is used in Ontario, excluding northwestern Ontario. 6 is for prairie provinces (Manitoba, Saskatchewan and Alberta), Northwest Territories, Nunavut and northwestern Ontario. 7 is used in the Pacific region (British Columbia and Yukon). 8 and 0 are not used.  SINs that begin with the number 9 are issued to temporary residents who are neither Canadian citizens nor permanent residents, such as foreign students or individuals on work visas. These SINs have an expiry date.

 

WEEKLY MARKET WRAP-UP

North America

The TSX closed at 14783, down -156 points or -1.04% over the past week. YTD the TSX is up 13.82%.
The DOW closed at 18161, up 15 points or 0.08% over the past week. YTD the DOW is up 4.22%.
The S&P closed at 2126, down -15 points or -0.70% over the past week. YTD the S&P is up 4.01%.
The Nasdaq closed at 5190, down -67 points or -1.27% over the past week. YTD the Nasdaq is up 3.65%.
Gold closed at 1276, up 16.00 points or 0.63% over the past week. YTD gold is up 20.49%.
Oil closed at 50.31, changed 0.00 points or 0.00% over the past week. YTD oil is up 35.79%.
The USD/CAD closed at 1.338352, up 0.0047 points or 0.36% over the past week. YTD the USD/CAD is down -3.27%.

Europe/Asia
The MSCI closed at 1695, down -9 points or -0.53% over the past week. YTD the MSCI is up 1.92%.
The Euro Stoxx 50 closed at 3079, up 1 points or 0.03% over the past week. YTD the Euro Stoxx 50 is down -5.78%.
The FTSE closed at 6996, down -25 points or -0.36% over the past week. YTD the FTSE is up 12.08%.
The CAC closed at 4549, up 13 points or 0.29% over the past week. YTD the CAC is down -1.90%.
DAX closed at 10696, down -15.00 points or -0.14% over the past week. YTD DAX is down -0.44%.
Nikkei closed at 17446, up 261.00 points or 1.52% over the past week. YTD Nikkei is down -8.34%.
The Shanghai closed at 3104, up 13.0000 points or 0.42% over the past week. YTD the Shanghai is down -12.29%.

Sources: Bloomberg; Investment Executive;  advisor.ca