The new trading week began on Monday, August 22nd during the dog days of summer and with the major North American markets trading on very light volume and seemingly uninterested at this time in trying to push above the recent multi-year and record highs they so recently achieved.
Canada’s largest convenience store operator Alimentation Couch Tard (ATD’B) announced that they were taking over Texas based convenience store chain CST Brands (CST-N) in a cash & debt deal of some US$4.4-billion. Then as part of the deal, they sold CST’s Canadian gasoline outlets to independent gas bar operator Parkland Fuel (PKI-T).
Similarly, Loblaw Cos. (L-T) expanded their presence in the pharmaceutical space by announcing they were acquiring electronic medical records company QHR Corp. (QHR-V) in an all-cash deal of some $170-million.
The first major casualty of the recent bull market in resource stocks came via the share price of Orezone Gold (ORE-V) that plunged by over 39% to $0.74 after the mineral explorer disappointed investors with the latest resource update from its Bomboré gold project in Burkina Faso.
Tuesday, August 23rd saw another international decision go against Venezuela and the price of Rusoro Mining (RML-V) shares’ rocketed up by over 122.5% to $0.35 as the World Bank awarded the junior miner a US$1.2-billion in damages after ruling that the South American country had unlawfully expropriated the company’s gold mine in that country.
Best Buy (BBY-N) shares’ rose by over 19.5% to US$39.23 after America’s largest electronics retailer handily beat the streets’ consensus with its 2nd-quarter financials.
Housing is an important economic indicator and Toll Bros. (TOL-N), America’s largest luxury home builder reported better than expected 2nd-quarter sales, prices and an 18.2% increase in new orders for homes going forward.
Similarly, the U.S. Commerce Department reported that new home sales grew by 12.4% in July to an annualized 9-year high of 654,000 units.
Gold stocks tumbled on Wednesday, August 24th as the price of the yellow metal fell by $18.50 to just US$1,327.50 ahead of U.S Fed Chair Janet Yellen’s state of the American economy speech on Friday.
Going the opposite way was the price of the six big Canadian banks as they all reported earnings during week that met or beat the streets’ expectations.
Express Inc. (EXPR-Q) shares’ plunged by over 25.5% to US$11.94 after the clothing retailer combined a less than stellar 2nd-quarter financial report with dramatically lowering its sales and profit guidance for the year ahead.
Similarly, the price of La-Z-Boy (LZB-N) fell by over 12.5% to US$27.25 when the relining chair manufacturer issued a 1st-quarter report that included lower wholesale demand and a decrease in retail foot traffic.
Thursday, August 25th saw the price of CHC Student Housing (CHC-V) soar up by 94% to $4.85 on word the company was combining with Dundee Aquisition (DAQ.A-T) in a $420-million deal to take a greater interest student housing projects.
Wesdome Gold Mines (WDO-T) also had a good day as its price surged up by over 49% to $2.24 after the miner reported encouraging drill hole gold assays below the old workings of its past producing Kiena mine in Quebec.
And the price of Guess? Inc. (GES-N) shares’ rose by 22% to US$18.20 when the casual retailer offered an optimistic view of the year ahead.
Friday, August 26th brought little surprise from the U.S. Federal Reserve as chair Janet Yellen reiterated – “I believe the case for an increase in the federal funds rate has strengthened in recent months.”
Meanwhile, while recently elected Canadian Prime Minister Justin Trudeau may get high marks for selfies, his fiscal prowess may be lacking as the Finance Department reported the federal government ran a $1-billion deficit for its fiscal 1st-quarter as opposed to the $5-billion surplus the previous government booked for the same quarter just one year ago.
Canadian drilling rigs are getting to the field again as Baker Hughes reported that the number of active Canadian petroleum drilling rigs increased by 26 last week to 146-active rigs.
Performance Sports Group (PSG-T0 shares’ rebounded up by almost 40% to $3.28 after the maker of Bauer Hockey and Easton sports gear indicated it had been given some extra time from creditors to comply with its loan covenants.
High Liner Foods (HLF-T) at $24.95, Royal Bank of Canada (RY-T) at $83.00 and Student Transportation (STB-T) at $7.25 all achieved new TSX 52-week trading highs while CI Financial (CIX-T) at $24.79, McCoy Global (MCB-T) at $1.51 and The Second Cup (SCU-T) at $2.21 all set new 52-week trading lows.
For the Week – The Dow Industrials fell by 0.85% to 18,395, with the S&P 500 Index down by 0.69% to 2,169 and the NASDAQ Exchange lower by 0.36% to 5,219. In the land of the twilight sun, the TSX Composite Index lost 0.32% to 14,640 and the TSX Venture Exchange dropped by 3.24% to 806.
With commodities – gold bullion fell by 1.63% to US$1,324, with copper down by 4.59% to US$2.08, and crude oil dropping by 3.64% to US$47.32 while natural gas increased by 10.31% to US$2.89. Overall, the CRB Spot Commodity Index fell by 1.21% to finish the week at 407.
The Canadian dollar fell by 1.00% against its southern counterpart to end the week at US$0.7690.
And the closely watched CBOE Volatility Index or VIX rose by 2.47-points to finish the week at a little more nervous level of 13.81.
And Finally – The 26% increase in the price of gold bullion this year has sent people rummaging thru their jewellery boxes as the World Gold Council reported that gold recycling is up by about 10% in the first half of 2016 over the same period one year ago.
And Finally, Finally – The Week is taking some much needed time away to travel to Canada’s prairies and visit with family, friends and clients along the way. If all goes as planned this publication will reappear on or about Monday, September 19th.
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