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The Week of April 2nd to April 8th, 2018 “A Brief Look Back Into Tomorrow”

 

 

 

 

 

The new North American trading week began on Monday, April 2nd with investors wondering if the recent market ‘correction’ was actually turning into a market ‘bear’. To which technical analysts David Tippin & Ron Meisels commented – “We expect that the correction period will end in April. The final chapter may have some volatile episodes but an upside resolution should be anticipated”. (For a complete copy of this report please contact Rod.blake@canaccord.com.)

 

 

 

The markets opened sharply lower on word that China was imposing trade tariffs of up to 25% on 128 products the country imports from the United States.

 

 

 

The Institute of Supply Management reported that its U.S manufacturing index fell by       1.5-points in March from its 14-year high to 59.3. Still well above the growth level of 50.

 

 

 

Giant micro-chip manufacturer Intel Corp. ‘INTC-Q’ shares’ tumbled lower by over 5% to US$49.00 after giant technology company Apple Inc ‘AAPL-Q’ announced it will begin building its own chips for its electronic devices.

 

 

 

Transcontinental Inc. ‘TCL.A-T’ stock rose by almost 10% to $27.92 after the Montreal based printing company announced it was buying Chicago based packaging company Coveris Americas in an all-cash deal of some US$1.32-billion.

 

 

 

Tuesday, April 3rd saw the United States counter China’s tariffs announcement on Monday by issuing 25% tariffs on a further 1,300 more industrial, technology, transport and medical products.

 

 

 

Spotify Technology ‘SPOT-N’ shares’ began trading publicly and the Sweden based music streaming company did very well as its stock price rose by almost 13% during the day to S$149.01.

 

 

 

The price of Callidus Capital ‘CBL-T’ stock plunged by over 31% to $4.42 after the finance company reported a much larger than expected 4th-quarter loss.

 

 

 

PURE Multi-Family ‘RUF.U-T’ shares’ surged up by 17% to US$7.25 on word the REIT was being acquired by private equity firm Electra America in an all-cash deal of some $7.59-a-share.

 

 

 

The tariffs ball went back into China’s court on Wednesday, April 4th and the world’s 2nd largest economy took advantage and announced tariffs on some 106 more American goods including soybeans, whisky, beef, industrial chemicals and small aircraft.

 

 

 

Eldorado Gold ‘ELD-T’ finally got some good news as an arbitration panel in Greece ruled the gold miner had a valid technical plan to build metallurgical plants for its Skouries and Olympias gold mines in that Mediterranean country.

 

 

 

The price of Cloudera Inc. ‘CLDR-Q’ plunged by over 40% to US$13.29 after the cloud-software company lowered its sales guidance for the rest of the year.

 

 

 

Lennar Corporation’s ‘LEN-N’ stock gained 10% to US$62.82 after the American homebuilder reported it sold more homes at higher prices in the 1st-quareter.

 

 

 

Thursday, April 5th has Statistics Canada report that the country’s trade deficit rose by a much larger than expected 42% in February to a 14-year high of $2.7-billion.

 

 

 

Similarly – the U.S. Commerce Department reported their trade deficit rose by a further 1.6% in February to a 9-year high of US$57.6-billion.

 

 

 

Corus Entertainment ‘CJR.B-T’ shares’ surged up by 19% to $7.13 after the media company surprised the street with much better than expected 1st-quarter financials.

 

 

 

Friday, April 6th had the Trump administration continue to play tit-for-tat with their Chinese counterparts by imposing another US$100-billion of import tariffs on yet unnamed Chinese products.

 

 

 

The U.S Labor Department report their economy created a less than expected 103,000 new jobs in March leaving the country’s unemployment rate steady ay 4.1%.

 

 

 

Up north – Statistics Canada said this country created a better than expected 32,300 new jobs in March, leaving the unemployment rate unchanged at 5.8%.

 

 

 

Petroleum industry analyst Baker Hughes ‘BHGE-N’ reported the number on active American drilling rigs rose by 10-rigs last week to 1,003 active drilling rigs, while the number of active Canadian rigs fell by 23-rigs to 111 active drilling rigs.

 

 

 

Torex Gold ‘TXG-T’ shares’ soared up by 51% to $ 11.57 on word that the illegal blockades had ended at the company’s ELG Mine and Media Luna Projects in Mexico.

 

 

 

During the Week – the TSX Composite Index, S&P 500 Index, and NASDAQ Exchange fell to respective 2-month closing lows of 15,164, 2,582, and 6,870. Meanwhile the Dow Industrials fell to 4-month low of 23,644 and the TSX Venture Exchange dropped to a          9-month low of 764. All of which helped the VIX to rise to a 2-month closing high of 24.87.

 

 

 

For the WeekCAE Inc. ‘CAE-T’ at $24.68, Fennec Pharmaceuticals ‘FRX-T’ at $18.24 and Morneau Shepell ‘MSI-T’ at $25.99 all rose to new TSX 52-week trading highs while Corby Spirit & Wine ‘CSW.B-T’ at $18.50, KP Tissue ‘KPT-T’ at $10.96 and Paramount Resources ‘POU-T’ at $13.93 all fell to new 52-week trading lows.

 

 

 

For the Week – the Dow Industrials fell by 0.72% to 23,933, with the S&P 500 off by 1.42% to 2,604 and the NASDAQ down by 2.10% to 6,915. Up north – the TSX Composite Index fell by 1.04% to 15,207 and the TSX Venture Exchange dropped by 3.51% to 769.

 

 

 

With Commoditiesgold bullion was lower by 0.75% to US$1,337, while copper was up by 0.66% to US$3.04, as crude oil dropped by 4.54% to US$61.99 and natural gas fell by 1.10% to US$2.70. Overall – the CRB Spot Commodity Index eased down by 0.23% to end the week at 436.

 

 

 

The Canadian dollar rose by 1.01% against its American counterpart to finish the week at US$0.7832.

 

 

 

And the closely watched CBOE Volatility Index or VIX gained 1.41-points to end the week at a little more nervous level of 21.49.

 

 

 

And Finally – To give you an idea of the future size of the marijuana business – research firm Cowen & Co. estimates that the American legal cannabis sales will reach US$75-billion by the year 2030 – or about the same size of the current North American soft drink market.

Posted April 9, 2018

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