The lazy weeks of summer continue with most investors failing to notice the topping patterns of the major American markets, or the first signs of a recovery bull market of the junior resource markets after all, one off week after eight to the good fails a bear market to make, or in the case of resources, one good weekly return does not make for the return of the long lost bull market. Time will tell, but so far it’s just a bit too soon for most to call.
Monday, August 19th turns out to be another cautious day in the markets, with most areas of the North America markets down in anticipation of the U.S Fed’s release of their previous month’s minutes. And the U.S markets have a lot to lose as Bloomberg reported that almost US$95-billion had been invested into American exchange traded funds or ETFs so far this year.
The Edwards Group (EVAC-Q) goes against the grain by gaining over 18% to US$10.00 on word of a friendly all-cash takeover proposal from Atlas Copco.
Best Buy (BBY-N) got the market’s attention on Tuesday, August 20th, when the giant electronics retailer’s stock price jumped up by almost 12% to a new 52-week trading high of US$34.40 on much better than expected 2nd quarter earnings.
Impressive as the stock price of Tesla Motors (TSLA-Q) has been, it got even more impressive last week when the U.S. National Highway Traffic Safety Administration (NHTSA) gave the electric car manufacturer a record high 5.4-star rating for its Model S coup sedan.
With what may be reflecting the country’s recent drop in employment, Statistics Canada reported that wholesale trade fell by a surprising 2.8% in June to $48.8-million. (Remember that wholesale trade reflects in retail trade at sometime down the road as businesses stock up or reduce their needs).
Canadians still like to go to the sun as Statistics Canada reported that trips to the United States rose by another 2.6% in June to a seasonally adjusted 4.8-million visits.
The markets were nervous on Wednesday, August 21st ahead of the release of the official minutes of the U.S Federal Reserve’s July meeting, (and perhaps some clarity into the Fed’s plan to tighten quantitative easing), causing the closely watched CBOT Volatility Index to jump up by another 0.56-points to cross above 15 to a little more jittery level of 15.47.
Lowe’s (LOW-N) shares.’ gained 4.29% to US$45.97 when the home improvement retailer impressed the street with its 2nd quarter financials. Conversely, the shares’ of Staples (SPLS-Q) and Target (TGT-N) fell by 14.96% and 3.16% respectively when these retailers 2nd quarter earnings fell short of analysts’ expectations.
The American housing market continues to show improvement as the National Association of Realtors reported that their existing home sales rose in July by a better than expected 6.5% to a seasonally adjusted 5.39-million units.
The markets got a boost of confidence on Thursday, August 22nd, when China’s HSBC Flash Purchasing Managers Index or PMI for rose in August by a better than expected 2.5-points to rise above the important level of 50 to a modestly expansionary 50.1.
While on a similar note Chinese officials reported that copper imports rose in June by 12.6% over the same month one year ago to 272,390 tonnes.
The sudden rise in mortgage rates may have given home buyers second thoughts as the U.S. Commerce Department reported that new home sales suddenly dropped by 13.4% in July by to just 394,000 units.
As per Tuesday’s foretelling above, Statistics Canada further reports that the country’s retail sales fell by 0.6% in June to $40.1-billion.
Barrick Gold (ABX-T) makes good on some of its cost cutting measures when the world’s largest gold producer announced they had sold three of their Australian gold mines to South Africa’s Gold Fields (GFI-N) in an all-cash deal worth some US$300-million
Back to school had better be good for Abercrombie &Fitch (ABF-N) after the teen’s clothier’s shares’ fell by over 17% to US$38.70 on poorer than expected 2nd quarter financials.
Google (GOOG-Q) management might want to look over their shoulders after ComScore reported that Yahoo! (YHOO-Q) had surpassed the giant search engine in website users for the first time since May, 2011.
NASDAQ officials were at a loss for an explanation as to why the world’s largest fully electronic securities trading platform was suddenly shut down for 3-hours. (Or perhaps it was relatives of the same rodents that ate through wires and shut down the exchange in both 1987 and 1994).
Under the heading of ‘Anyone But Me – Suddenly optimistic shareholders of Microsoft (MSFT-Q) sent the giant software company’s shares up by $2.80 to US$35.20 on Friday, August 23rd, when current CEO Steve Ballmer announced he would resign in the next 12-months once a new successor had been found.
Meanwhile, investors finally show Facebook (FB-Q) some ‘like’ when they push the social media company’s shares up by $2.00 to close at a new post IPO high of US$ 40.55.
With summer crops looking good for most of North America, the investors pushed Alliance Grain Traders (AGT-T) up to a new TSX 52-week trading high of $17.31, along with Canada’s most popular retailer Canadian Tire Corp. (CTC.A-T) that touched a new 52-week high of $91.46, while the interest sensitive real estate REITS continued to take the brunt of the markets selling with Artis REIT (AX.UN-T) at $13.60, CAP REIT (CAR.UN-T) at $20.11 and Crombie REIT (CRR.UN-T) at $12.48 all sinking to new 52-week trading lows.
For the Week – The DJIA eased by another 0.48% to 15,010, while the S&P 500 Index improved by 0.46%to 1,663 and the NASDAQ Exchange was up by 1.53% to 3,658. On the Canadian side, the TSX Composite Index was ahead on the week by a slim 0.20% to 12,762 and the TSX Venture Exchange managed a gain of 0.67% to end the week at 947.
Gold bullion rose by 1.81% to a 2-month high of $1,397.60-an-ounce, while crude oil was off by 0.67% to $106.43-a-barrel and the CRB Commodities Index rose by 2.45-points to 290.79.
Canadian cross border shoppers must be disappointed to see that the Canadian dollar lost 1.56% to its American counterpart to end the week at U.S$0.9521.
And Finally – As the lazy days of summer move slowly on, it was of interest to see that according to Expedia, up 40% of Canadians feel their average of 17- vacation days a year are not enough, especially when compared the their European cousins who get an average of 25-30 vacation days a year.
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