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Terry Broaders

Weekly Update July 12 2016

“Well Done Is Better Than Well Said” – Benjamin Franklin

 

Markets Climb Friday Following Solid U.S. Jobs Figures

Canadian stocks climbed on Friday as a resurgence in U.S. job creation in June showed resilience in the economy of Canada’s largest trading partner, offsetting a decline in the domestic payroll.  The S&P/TSX Composite Index rose 0.89 per cent, or 125.38 points, to 14,259.84 in Toronto. The gains were broad and significant with five of the index’s 10 main sectors notching gains of more than 1 per cent as investors focused on the bumper number from the much larger economy of the United States.

Canada’s job market weakened in June, capping the worst quarter for payrolls in two years. Employment fell by about 700 in June, short of economists’ forecasts for a 5,000 gain, while the jobless rate unexpectedly dropped to 6.8 percent from 6.9 per cent as Canadians left the job market. By contrast, U.S. payrolls surged by 287,000 last month, topping the highest estimate in a Bloomberg survey and accelerating the most since October. The unemployment rate rose to 4.9 per cent as more people entered the workforce. The U.S. is Canada’s largest trading partner by a wide margin, accounting for more than $540-billion in trade last year, according to data compiled by Bloomberg.
U.S. stock markets responded positively to the news, with the Dow Jones industrial average climbing 250.86 points at 18,146.74, the broader S&P 500 composite index advancing 32.00 points to 2,129.90 and the Nasdaq composite gaining 79.95 points to 4,956.76.

 

Most Canadians Would Change Jobs For Better Retirement Benefits 

The latest ADP Canada Sentiment Survey found that retirement benefits like pensions and group registered retirement savings plans can play a big part in an employee’s decision to change jobs. According to the survey, 77% of Canadian workers would consider leaving their current jobs if, all other things being equal, another employer offered a retirement plan.   “These numbers are an indication that employers should pay close attention to what’s important to their employees, and to what is being offered by their competitors,” said Sooky Lee, division vice president and general manager of HR business process outsourcing at ADP Canada. “Most companies track salaries to make sure they are competitive, but many forget about other compensation factors, such as retirement programs.

The survey found that employees in British Columbia were most likely to consider leaving their job for better retirement benefits, with 88% saying they would consider making a change. Those in Quebec were least likely, with only 69% saying they’d consider leaving for better retirement plans. And while most (70%) employees of small companies (2-50 employees) said they’d consider changing jobs for better retirement plans, a far greater percentage of employees at midsize companies with 51-500 employees (86%) and large companies (74%) said they’d consider making a change.  And employers shouldn’t assume that younger employees won’t be as interested in retirement benefits. In fact, the study found no significant difference in interest between millennials and older employees.   “Workers in the 18-to-34 age group are just as interested as their older colleagues in having retirement support,” Lee said.

 

Weekly Market Wrap Up As of July 8 2016

North America
The TSX closed at 14260, up 195 points or 1.39% over the past week. YTD the TSX is up 9.79%.
The DOW closed at 18147, up 198 points or 1.10% over the past week. YTD the DOW is up 4.14%.
The S&P closed at 2130, up 27 points or 1.28% over the past week. YTD the S&P is up 4.21%.
The Nasdaq closed at 4957, up 94 points or 1.93% over the past week. YTD the Nasdaq is down -1.00%.
Gold closed at 1367, up 38.00 points or 0.96% over the past week. YTD gold is up 29.08%.
Oil closed at 45.16, down -3.66 points or -7.50% over the past week. YTD oil is up 21.89%.
The USD/CAD closed at 1.303979, up 0.0140 points or 1.08% over the past week. YTD the USD/CAD is down -5.76%.

Europe/Asia
The MSCI closed at 1644, down -15 points or -0.90% over the past week. YTD the MSCI is down -1.14%.
The Euro Stoxx 50 closed at 2838, down -45 points or -1.56% over the past week. YTD the Euro Stoxx 50 is down -13.16%.
The FTSE closed at 6591, up 13 points or 0.20% over the past week. YTD the FTSE is up 5.59%.
The CAC closed at 4191, down -83 points or -1.94% over the past week. YTD the CAC is down -9.62%.
DAX closed at 9630, down -146.00 points or -1.49% over the past week. YTD DAX is down -10.36%.
Nikkei closed at 15107, down -576.00 points or -3.67% over the past week. YTD Nikkei is down -20.63%.
The Shanghai closed at 2988, up 55.0000 points or 1.88% over the past week. YTD the Shanghai is down -15.57%.

 

Sources: Bloomberg; Investment Executive;  CIBC; advisor.ca,

Odette Morin

Get ready for the Brexit Boogeyman

Brexit Direction Sign

Start building your courage, we are in for a ride ahead of the June 23rd referendum date in the United Kingdom, when British citizens will vote on whether or not to remain part of the European Union. You can expect the markets to move downward a few percentage points leading to the vote, with polls indicating that the race is tight, and a deeper dip if the British vote in favour of leaving the EU.

Should you be spooked by the Brexit Boogeyman? Should we be taking some actions now to mitigate this risk?

The June 23rd referendum clearly represents uncertainty for markets, businesses and the central bank. Independent economists say a vote to leave the EU could cause a drop in the pound of as much as 20% and push the economy back into recession.

Manulife Asset Management’s Chief Economist, Megan Greene believes that the UK’s best and most likely path forward is to remain in the EU. “By doing so, it can try to reform the EU from within”. She explains why the alternatives to EU membership would all leave the UK less well-off and how a Brexit could potentially lead to a weaker pound sterling as well as looser monetary policies from the Bank of England. Interestingly, Ms Greene also notes that “…while Brexit may not be in the UK’s best interest, it might not be the unmitigated disaster that some fear”.

If Brexit occurs, the UK will negotiate some agreement that is mutually beneficial for the UK and the EU.  An agreement will be eventually reached, potentially, similar to the successful agreements with Sweden and Norway.

For investments however, the best buying opportunities come from trading against an emotional crowd. “This may be a buyable dip for those who have the courage to be greedy when others are fearful.  A week of two after the Brexit vote, the unknowns will have been ironed out and we will move forward with a plan.” Says Jani Ziedins from Cracked Market.

Capital Economics has been commissioned by Woodford Investment Management to examine the United Kingdom’s relationship with Europe and the impact of ‘Brexit’ on the British economy.

The in-depth analysis concluded that “although the impact of Brexit on the British economy is uncertain, we doubt that Britain’s long-term economic outlook hinges on it.”

Here is the full 47 pages report which covers the economic impacts of the most important elements of the Brexit debate.

Don’t let this uncertainty rattle your long-term focus.  Remain rational and avoid making risky bets.  Staying the course with your current long-term quality investments – within a balanced portfolio  – is always the safest course of action.

If you are in your saving years and have funds to invest, this dip may prove to be a great opportunity to enhance your returns.

 

Terry Broaders

Weekly Update May 24 2016

“The Important Thing Is Not What They Think Of Me, But What I Think Of Them” -Queen Victoria

 

TSX Up More Than 100 Points On Friday

North American stock markets rebounded strongly to close the trading week, with the Toronto stock market posting a triple-digit gain in advance of the Victoria Day holiday weekend. The Toronto Stock Exchange’s S&P/TSX composite index soared 102.26 points to close at 13,919.58. The index is on track to rise 1.3% for the week, while it has rebounded more than 20% from an almost three-and-a-half-year low in January.
In New York, markets turned higher after big drops Thursday. The Dow Jones industrial average was up 65.54 points at 17,500.94, the broader S&P 500 composite index advanced 12.28 points to 2,052.32 and the Nasdaq composite rose 57.03 points to 4,769.56. The Canadian dollar posted its fourth consecutive loss, however, down 0.11 of a U.S. cent at 76.20 cents US. The July crude contract lost 26 cents to US$48.41 a barrel. Elsewhere in commodities, June natural gas was up 2.3 cents at US$2.06 per mmBtu, the June gold contract fell $1.90 to US$1,252.90 a troy ounce and July copper was little changed at US$2.06 pound.

 

Canadians Living Longer StatsCan Finds 

Canadians’ life expectancy continues to rise, according to the latest data from Statistics Canada
StatsCan reports that, during the 2010-12 period, life expectancy at birth rose by 0.3 years for males to 79.4 years and by 0.2 years for females, to 83.6 years, compared with the 2009-11 period.
The gap between the life expectancy at birth for males and females is down to its lowest level since the end of the 1970s, StatsCan also notes. Back then, the gender gap was 7.5 years. For the 2010-12 period, it was down to 4.2 years.  The smaller gap “was partly due to a decrease in mortality rates linked to diseases that more frequently affected males in the past,” StatsCan reports. “In addition, women’s adoption of behaviour similar to those of men, such as in the labour market, also contributed to the narrowing of the gap over the previous three decades.”
Life expectancy also continues to rise among those aged 65 in 2010-12. For males that hit age 65 during this period, they could expect to live another 18.7 years, up by 0.1 years from 2009-11; and females could expect to live another 21.7 years, up by 0.2 years compared with the prior period.
By region, life expectancy at birth remains highest in British Columbia, at 80.2 years for males and 84.2 years for females. Conversely, it’s lowest for babies born in Nunavut, where it was just 69.3 years for males and 74.7 years for females.

Canada has one of the highest life expectancies in the world, StatsCan notes. Only Iceland, Israel, Switzerland and Australia have higher life expectancies for males, at 81 years each. For females, Japan (87 years), Spain (86 years), Australia, France, Italy, South Korea and Switzerland (85 years each) have a higher life expectancy..

 

Weekly Market Wrap Up as of May 20 2016

North America
The TSX closed at 13920, up 171 points or 1.24% over the past week. YTD the TSX is up 7.18%.
The DOW closed at 17501, down -34 points or -0.19% over the past week. YTD the DOW is up 0.44%.
The S&P closed at 2052, up 5 points or 0.24% over the past week. YTD the S&P is up 0.39%.
The Nasdaq closed at 4770, up 52 points or 1.10% over the past week. YTD the Nasdaq is down -4.73%.
Gold closed at 1253, down -14.00 points or -1.73% over the past week. YTD gold is up 18.32%.
Oil closed at 48.46, up 2.27 points or 4.91% over the past week. YTD oil is up 30.80%.
The USD/CAD closed at 1.312101, up 0.0179 points or 1.38% over the past week. YTD the USD/CAD is down -5.17%.

 

Europe/Asia
The MSCI closed at 1628, down -22 points or -1.33% over the past week. YTD the MSCI is down -2.10%.
The Euro Stoxx 50 closed at 2962, up 5 points or 0.17% over the past week. YTD the Euro Stoxx 50 is down -9.36%.
The FTSE closed at 6156, up 17 points or 0.28% over the past week. YTD the FTSE is down -1.38%.
The CAC closed at 4354, up 34 points or 0.79% over the past week. YTD the CAC is down -6.10%.
DAX closed at 9916, down -37.00 points or -0.37% over the past week. YTD DAX is down -7.70%.
Nikkei closed at 16736, up 324.00 points or 1.97% over the past week. YTD Nikkei is down -12.07%.
The Shanghai closed at 2826, down -1.0000 points or -0.04% over the past week. YTD the Shanghai is down -20.15%.

 

Sources: Bloomberg; Investment Executive;  advisor.ca,

Odette Morin

How did the latest “Sell everything” strategy work out?

In my 28 year career in the investment industry, I had to reassure clients time and time again. Investors get really concerned when they hear Doom & Gloom predictions from well meaning friends or the media.
Time and time again I have to remind them to disregard market fluctuations. Good quality investments in a well balanced portfolio always recover. It is safer to stay the course.
Here is a fantastic article about would have happened if you would have followed the latest sell everything strategy that did its rounds earlier this year.
Terry Broaders

Weekly Update April 25 2016

“Compassion is an action word with no boundaries.” – Prince

 

We are busy doing your taxes.  Our weekly commentary will come back to you on May 6, 2016.  Here are this week’s market numbers.

Weekly Market Wrap Up as of April 22, 2016

North America
The TSX closed at 13874, up 237 points or 1.74% over the past week. YTD the TSX is up 6.82%.
The DOW closed at 18004, up 106 points or 0.59% over the past week. YTD the DOW is up 3.32%.
The S&P closed at 2092, up 11 points or 0.53% over the past week. YTD the S&P is up 2.35%.
The Nasdaq closed at 4906, down -32 points or -0.65% over the past week. YTD the Nasdaq is down -2.02%.
Gold closed at 1234, down -6.00 points or -0.16% over the past week. YTD gold is up 16.53%.
Oil closed at 43.75, up 3.35 points or 8.29% over the past week. YTD oil is up 18.08%.
The USD/CAD closed at 1.26705, down -0.0152 points or -1.19% over the past week. YTD the USD/CAD is down -8.43%.

Europe/Asia
The MSCI closed at 1691, up 19 points or 1.14% over the past week. YTD the MSCI is up 1.68%.
The Euro Stoxx 50 closed at 3141, up 87 points or 2.85% over the past week. YTD the Euro Stoxx 50 is down -3.89%.
The FTSE closed at 6310, down -34 points or -0.54% over the past week. YTD the FTSE is up 1.09%.
The CAC closed at 4570, up 75 points or 1.67% over the past week. YTD the CAC is down -1.44%.
DAX closed at 10374, up 322.00 points or 3.20% over the past week. YTD DAX is down -3.43%.
Nikkei closed at 17573, up 725.00 points or 4.30% over the past week. YTD Nikkei is down -7.68%.
The Shanghai closed at 2959, down -119.0000 points or -3.87% over the past week. YTD the Shanghai is down -16.39%.

 

Odette Morin