Blog

Category Archives: The Markets

Terry Broaders

Weekly Update September 2 2014

“Remember That You Are Absolutely Unique, Just Like Everyone Else” -Margaret Mead

 

Mining Stocks Take TSX Higher

The Toronto stock market erased early losses to close higher Friday as investors bought into beaten-down mining stocks. The S&P/TSX composite index closed 67.56 points higher at 15,625.73. The Canadian dollar was down 0.22 of a cent at 91.97 cents US amid data that also showed stronger than expected Canadian economic growth. U.S. indexes were modestly higher while traders played it cautious going into the long Labour Day weekend amid fears of a wider Russian incursion into Ukraine and a big letdown in U.S. consumer spending data. The Dow Jones industrials climbed 18.88 points to 17,098.45 as other data showed consumer spending dropped 0.1% last month, against the gain of 0.3% that generally had been expected, with weakness most pronounced in the auto sector. The Nasdaq ran ahead 22.57 points to 4,580.27 and the S&P 500 index was up 6.63 points to 2,003.37. Toronto and New York markets both gained ground this past week. The Dow industrials posted a 97- points or 0.57% advance, while the TSX gained 90 points or 0.6%, led by consumer staples, industrials and telecoms. But the TSX was held back by the financial sector, down 1.15% this week despite a steady parade of earnings news from the big Canadian banks that largely beat expectations.

 

Canadian Economy Expands At Fastest Rate in Nearly 3 Years

Canadians sent the economy growing at an annual pace of 3.1% in the second quarter of this year. Statistics Canada says the sharp increase in the gross domestic product was the strongest growth rate in nearly three years and compared with a 4.2% rise in GDP south of the border. The jump came as the agency updated its result for the first quarter to an annual pace of 0.9% compared with an earlier reading of 1.2% in the first three months of the year. Economists had expected a growth rate in the second quarter of 2.7%. On a monthly basis, the Canadian economy grew in June by 0.3% compared with economist expectations for growth of 0.2%.  Statistics Canada said there was growth in every sector during the quarter, save for non-profit institutions serving households. Consumers led the increase, with household consumption up by 0.9% for the three month period ended June 30. Canadians spent 1.2% more on goods in the second quarter, and 0.7% more on services. Spending on housing showed a marked increase with investment in residential structures up 2.9% by quarter and home ownership transfer costs up by a full 9.0% after two previous quarters of decline.  Exports were also up by 4.2% in the second quarter — the strongest performance since the third quarter of 2011 — after declining by 0.2% in the first three months of the year.  Significant increases were seen in exports of vehicles, farm and fishing products, forestry products and packaging materials.  As well, business capital spending was up by 0.8% after two consecutive quarterly declines.

 

Market Update August 29 2014

The TSX closed at 15626, up 90 points or 0.58% over the past week. YTD the TSX is up 14.71%.

The DOW closed at 17099, up 98 points or 0.58% over the past week. YTD the DOW is up 3.15%.

The S&P closed at 2003, up 15 points or 0.75% over the past week. YTD the S&P is up 8.39%.

The Nasdaq closed at 4580, up 41 points or 0.90% over the past week. YTD the Nasdaq is up 9.65%.

Gold closed at 1288, up 7.00 points or 0.55% over the past week. YTD gold is up 6.98%.

Oil closed at 95.85, up 2.28 points or 2.44% over the past week. YTD oil is down -2.80%.

The USD/CAD closed at 1.087169, down -0.0074 points or -0.68% over the past week. YTD the USD/CAD is up 2.25%.

 

Sources: Bloomberg; Statistics Canada; advisor.ca; Investment Executive

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 June 17 2014

“Knives, Guns or Fisticuffs; Keep In Mind That I Am Good At All Of Them” – Lorne Campbell

 

TSX Higher On Price of Oil

The Toronto Stock Exchange rose Friday, pushed higher by burgeoning oil prices amid concerns that global supplies could be at risk if an advance by insurgents in Iraq continues. The S&P/TSX composite index added 91.98 points to 15,001.61–only a few points shy of its record close of 15,073 in June 2008, just before the Great Recession sent stocks plummeting. The Canadian dollar was down 0.01 of a cent to 92.11 cents US. In Iraq, Islamic militants vowed to march on Baghdad after pushing deep into parts of the country’s Sunni heartland northeast of the capital that had been previously controlled by U.S. forces, raising concerns over global oil supplies. The July crude contract advanced 38 cents to US$106.91 a barrel. Meanwhile, gold added 10 cents to US$1,274.10 an ounce, while July copper added a penny to US$3.03 a pound. On Wall Street, U.S. indexes rallied as the Dow Jones industrials rose 41.55 points to 16,775.74, the Nasdaq climbed 13.02 points to 4,310.65 and the S&P 500 saw an uptick of 6.05 points to 1,936.16.

 

Seniors Say They Know It All When it Comes to Finance

Canadian seniors are more likely than other age groups to give themselves a high mark for overall financial knowledge, shows BMO Financial Group’s third annual financial literacy report. The study showed that 55% of seniors give themselves an “A” or “B” when evaluating their overall knowledge of key financial products, programs and terms. This is 10% higher than the Canadian average. But a recent report issued by the BMO Wealth Institute, Mind Your Taxes in Retirement, shows a significant number of baby boomers (those aged 45+) lack knowledge of key personal finance topics that can impact their income during retirement. The report noted that only a small percentage of boomers know how best to maximize their tax savings, leaving them vulnerable to having benefits and credits such as Old Age Security (OAS) and the Age Amount tax credit clawed back.

For example: 79% either answered incorrectly or did not know how dividend income and capital gains are treated from a tax perspective; 34% either answered incorrectly or did not know how interest income is treated from a tax perspective and 41% did not understand the tax implications of making a RRIF withdrawal.

 

Market Update as of June 13 2014

The TSX closed at 15002, up 163 points or 1.10% over the past week. YTD the TSX is up 10.13%.

The DOW closed at 16776, down -148 points or -0.87% over the past week. YTD the DOW is up 1.20%.

The S&P closed at 1936, down -13 points or -0.67% over the past week. YTD the S&P is up 4.76%.

The Nasdaq closed at 4311, down -10 points or -0.23% over the past week. YTD the Nasdaq is up 3.21%.

Gold closed at 1277, up 23.00 points or 1.83% over the past week. YTD gold is up 6.06%.

Oil closed at 106.81, up 3.98 points or 3.87% over the past week. YTD oil is up 8.32%.

The USD/CAD closed at 1.085502, down -0.0073 points or -0.67% over the past week. YTD the USD/CAD is up 2.10%.

 

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

 

Odette Morin

The ABC of tracking of your Investment Gains & Losses

There was a great article today in the Globe & Mail about tacking your Adjusted Cost Base.  This is essentially needed when you dispose of equity investments in a non-registered account.  Gains and Losses must be reported.  You do not get a Tslip for that investment income.  You only pay tax on 50% of the gain you make.  This article explains it very well.  Of course if you are our client, we will do this for you!!

Odette Morin

2014 Q1 Market Commentary

Equity markets around the world posted mixed results in the first quarter of 2014. Despite some volatility early in the period, the global economy’s moderate growth, low interest rates and controlled inflation gradually supported investor confidence and resulted in increases for many markets by quarter-end. Fixed-income securities were also higher for the quarter, with prices for 10-year government bonds in Canada and the U.S. rising slightly, pushing yields down, while demand for corporate bonds remained strong.

The crisis in Ukraine, instability in emerging markets and slower growth in China created headwinds for global equity markets in the first two months of the year. By the end of the quarter, however, the S&P/TSX Composite Index in Canada had benefited from higher prices for commodities to gain 6.1%, including dividends. The index was broadly positive, with the strongest results coming from the energy and materials sectors, while industrials and financials had smaller increases.

Performance among foreign markets was more muted, but Canadian investors in global securities benefited as the Canadian dollar weakened against several major currencies, including the U.S. dollar and the euro. After posting stellar results in 2013, for example, the S&P 500 Index added a modest 1.8%, which translated to nearly 6% in Canadian dollar terms. Early declines for the U.S. market were ultimately reversed by improving economic data and the market’s increasing comfort with the new Chair of the U.S. Federal Reserve, Janet Yellen, and its resolve to “taper” its economic stimulus. Stronger business conditions and greater stability in Europe, meanwhile, led to results that were mixed in local currency terms, but positive when converted to Canadian dollars. Investor anxiety about the effect of tapering on emerging markets and China’s cooling economy led to negative results for China’s Shanghai Index and the MSCI Emerging Markets Index, and after making strong gains in 2013, Japan’s Nikkei Index declined 9.0%, or 3.3% in Canadian dollar terms.

We marked the fifth anniversary of the current bull market during the first quarter of this year. It has been gratifying to see how well both the global economy and stock markets have recovered in this time – the S&P 500 Index in the U.S. has gained more than 180% and the MSCI World Index is up 140% from their lows of March 2009 to the end of March 2014. Nevertheless, the volatility experienced in the most recent quarter is a reminder that capital market investments typically do not take a path uniformly upward, often experiencing declines or “corrections” before moving forward again. For that reason, I believe it is important to take a longer-term approach, and to invest in a portfolio that is well diversified among asset classes, geographies and sectors, depending on your individual investment objectives.

In closing, I would like to thank you for your continued trust and business. If you have any questions or concerns about your account, please do not hesitate to contact me, Terry or Anthony.

Source of information: Investments, Signature Global Asset Management, Cambridge Global Asset Management, Globe and Mail, National Post, Bank of Montreal Economics, and Trading Economics. Index information was provided by TD Newcrest and PC Bond.

Terry Broaders

Weekly Update February 4 2014

“The Rich Never Have To Seek Out Their Relatives” -Proverb

 

TSX Finishes In The Red

The Toronto stock market finished in the red on the final day of January trading as worries about European deflation and emerging markets persuaded investors to step back after a big runup. The S&P/TSX composite index dropped 40 points to 13,694. The Canadian dollar advanced 0.31 of a cent to 89.92 cents US as November gross domestic product rose 0.2%, in line with forecasts. New York’s Dow industrials dropped 149 points to 15,698, the Nasdaq fell 19 points to 4,103 and the S&P 500 index lost 11 points to 1,782.  Data showed that inflation in the eurozone fell to 0.7% in the year to January from 0.8% the previous month. The data raised worries that the region could slip into a situation where prices are actually falling. Such deflation can hurt an economy as consumers delay purchases and businesses postpone investment.

The TSX is up 0.53% for the month and the Dow industrials are down 5.3%. But analysts suggested that a reason for the decline is that investors simply wanted to cash in on a huge rally last year that left the Dow up well over 20%. “This is more like taking profits,” said Sid Mokhtari, a technical analyst at CIBC World Markets, noting that the U.S. market has only fallen 4% this month peak to trough. “Internals of the market are still OK, we don’t see too many damaged profiles to the market internals, which is generally a good sign.”

 

Canadian Economy Grows For Fifth Straight Month

The economy grew by 0.2% in November compared with October, boosted by the resource sector, marking the fifth straight monthly increase. The increase matched the expectations of economists and was just below the 0.3% gain in October. “While looking somewhat deep into the rear-view mirror, the decent month continues to point to a sturdy end to 2013 for the Canadian economy,” BMO chief economist Doug Porter wrote in a note. “The three-month trend in growth is now running at a nifty 3.8% annualized clip, and output is up 2.6% from a year ago.” Statistics Canada said the output of goods-producing industries rose by 0.4% in November, led by an increase in oil and gas extraction which rose 2.6%. Mining and quarrying was up 1.3%, while utilities gained 2.1% as cold weather boosted demand for electricity and natural gas. Manufacturing was down 0.5%. The output of service industries rose 0.2% as retail trade gained 0.8%. Wholesale trade lost 0.6%. TD Bank economist Leslie Preston said with two out of three months now in hand for the fourth quarter, the economy looks to have built on the momentum of the third quarter.   Last week, the Bank of Canada said in its monetary policy report that economic growth in the second half of 2013 was better than expected and should pick up from an estimated 1.8% in 2013 to 2.5% both this year and next. The central bank expects global growth—led by stronger momentum in the U.S.—to rise from 2.9% in 2013, to 3.4% and 3.7% in the following years.

 

Blog Links

Get Paid To Work !

RRSP Checklist For 2014

Retirement Saving – New Top Priority

 

Sources: Bloomberg; advisor.ca; Investment Executive; Statistics Canada; BMO; TD