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Rod Blake – the Week of January 28th to February 3rd

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Rod Blake – the Week of January 28th to February 3rd

 

 


“A Brief Look Back into Tomorrow”


The last trading week of January begins on Monday, January 28th, with investors wondering if the major North American markets had enough momentum left to run their string of consecutive weekly advances to five, with so far the New Year enjoying a perfect New Year starting record of four for four.

 

 

Uranium stocks get a bit of a lift on word that Japan’s new Prime Minister Shinzo Abe may once again begin directing his tsunami leery country back towards nuclear power.

 

 

Toyota Motors reports it has finally recovered from tsunami driven production cuts of 2011 to once again be the world’s largest producer of vehicles in 2012.

 

 

Investors continue to pay up for yield and safety as they drive the Bank of Nova Scotia ‘BNS-T’, CIBC ‘CM-T’ and Royal Bank of Canada ‘RY-T’ to new 52-week highs even after Moody’s Investment services downgrades five of Canada’s big six banks over consumer debt and high pricing concerns.

 

 

Agrium Inc. ‘AGU-T’ and Husky Energy Inc. ‘HSE-T’ reach new 52-week trading highs of $116.38 and $32.34 respectively, while precious metal stocks Allied Nevada Gold ‘ANV-T’ and Premier Gold Mines ‘PG-T’ drop to new respective 52-week lows of $23.05 and $3.50.

 

 

Tuesday, January 29th begins with some optimism on word that China will spend $113-billion on new train and railway infrastructure.

 

 

Investors continue to like to play with their trains as they trade Canada’s two national rail companies, Canadian National Railway ‘CNR-T’ and Canadian Pacific Railway ‘CP-T’ up to respective new 52-week trading highs of $96.28 and 118.57. Meanwhile the energy sector was under some pressure with Pengrowth Energy ‘PGF-T’ falling to a new 52-week trading low of $4.38.

 

 

Amazon.com ‘AMZN-Q’ has a rough day when the stock of the world’s largest online shop falls by 5.56% to US$260.35 on 4th quarter results that failed to meet the streets lofty expectations.

 

 

Trim Tabs Investment Research reports that investors have put a record $55.0-billion into equity mutual funds so far this January.

 

 

Which helps to move the Dow Jones Industrial Average up by another 72-points to a new 5-year high of 13,954 and the S&P 500 Index up by 8-points to a new 5-year high of 1,509.

 

 

Wednesday, January 30th, begins with the much anticipated launch or Research In Motion’s ‘RIM-T’ BlackBerry 10 smartphone, which doesn’t especially impress the market as the stock drops by nearly 12% to $13.86, despite also changing their name to ‘BlackBerry’ ‘BB-T’ ‘BBRY-Q’.

 

 

Under the heading of ‘Playing Hardball’ – Bloomberg reports that mineral developer Rio Tinto ‘RIO-T’ has warned it will halt construction of the giant Oyu Tolgoi copper project in Mongolia if the government their continues to insist on raising their stake in the project from its current 34% to a control position of 51%.

 

 

The Washington post reports that China’s use of coal grew by 9% in 2011 to 3.8-billion tonnes, and the Asian country alone is now using almost as much coal than the rest of the world combined.

 

 

Statistic Canada reports the average Canadian’s wage grew by 3.2% in the year to November 2011 to $911 per week.

 

 

Chesapeake Energy ‘CHK-N’ shareholders vote with their wallets as they drive the giant U.S. based natural gas company’s stock price up by some 6% to US$20.11 when company president, Aubrey McClendon, announces he…..is retiring.

 

 

We’re not to sure whether it’s due to their food or their association to the popular TV show ‘Dragons Den’ and star dragon Jim Treliving, but Boston Pizza Royalties ‘BPF.UN-T’ share price reaches another 52-week trading high of $19.97 a share.

 

 

Thursday, January 31st, begins with reports that Sears Canada ‘SCC-T’ will be reducing its workforce by some 700 people and Best Buy Canada will be immediately closing fifteen of its big-box outlets and laying off 900 workers.

 

 

Statistics Canada reports the economy grew in November by a better than expected 0.3%

 

 

Augusta Resource ‘AZC-T’ share’s rise by 9.88% to $2.67 on word the mineral developer had received the important Air Quality Permit for its Rosemont copper project in Arizona.

 

 

The value of beer sales s brought to a head when the shares’ of Constellation Brands ‘STZ-N’ plunge by17.39% to US$32.36 when the U.S. Justice Department files a lawsuit that effectively stops the company of becoming the sole American distributor of Mexico’s priced Corona beer.

 

 

Consumer products were the flavour of the day on the TSX as Cott Corp.

 

 

‘BCB-T’, Danier Leather ‘DL-T’ and Sun-Rype Products ‘SRF-T’ all rose to new 52-week trading highs, while precious metal stocks were still out of favour, led by giant Newmont Mining ‘NMC-T’ that fell to a new 52-week low of $43.42.

 

 

For those who believe in the January effect that how goes January usually goes the rest of the year, the DJIA ended the month with an impressive gain of 5.78% , with the S&P 500 Index up in January by 5.05% and the NASDAQ Exchange higher by 4.04%. North of the border, the resource weighted TSX Composite Index managed a gain in January of 2.02% while the long suffering TSX Venture Exchange finished the month of January at the same level as it started.

 

 

The markets begin Friday, February 1st, on an upbeat note on word from the U.S. Labor department that not only had their economy had created 157,000 new jobs in January, but better still, the jobs growth for last November and December was revised significantly upwards by about 50,000 new workers a month as well.

 

 

30-second U.S. TV commercial spots for this weekend Super Bowl game in New Orleans are reported to be approaching a record US$4-million a spot.

 

 

Real estate continues to attract investors attention with Allied Property REIT ‘AP.UN-T’ reaching a new 51-week trading high of $35.34, along with Boardwalk REIT ‘BEI.UN-T’ at $66.80 and Brookfield Residential Properties ‘BRP-YT’ at $21.26. Meanwhile, Sears Canada’s ‘SCC-T’ recent announcement of employee layoffs didn’t help that issue as it fell to a new 52-week trading low of $9.42.

 

 

The Dow Industrials gain 149-points to once again cross above 14,000 to close at a new 5½-year high of 14,010, while the S&P 500 Index rose by 15-points to also close a new 5½-year high of 1,513.

 

 

Canaccord’s Debbie Lewis – “I’m not always right, but when I am, it’s usually all of the time.”

 

 

For the Week – The U.S. major markets pushed their string of 2013 weekly gains to a perfect 5-weeks, with the DJIA gaining another 0.82%, while the S&P 500 Index improved by 0.77% and the NASDAQ Exchange returned 0.92%. On the Canadian side, the continued bear market in precious metals helped to pull the TSX Composite Index down by 0.37% on the week, while the thinly traded TSX Venture Exchange managed a marginal weekly gain of 0.11%.

 

 

And Finally – As we in North America grumble about our transit authorities’ inabilities to improve or even maintain adequate service levels, it was of great interest to note the Italian city of Naples recently had to ground its 300 transit buses because….they ran out of money to pay for their much needed fuel.

 

 

Interesting times………………………………………….and thanks

 

 

 

 

 

 

Rod Blake, AScT
Investment Advisor
rod.blake@canaccord.com
T: 604.643.7567

 

Evan Davies
Investment Advisor Assistant
evan.davies@canaccord.com
T: 604.643.7065

 

 

 

 

Looking for investment or trading ideas? Give us a call, we can help. Toll free 1-800-663-1899.

To view previous editions of “The Week”, “Articles of Interest” or to learn more visit my website at www.rodneyblake.com

 

Posted February 5, 2013

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