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The Week of December 14th to December 20th, 2015 “A Brief Look Back Into Tomorrow”

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The Week of December 14th to December 20th, 2015 “A Brief Look Back Into Tomorrow”

 

 

 

 

 

The new trading week began on Monday, December 14th with the market fully aware that come mid-week the U.S. Fed would make their long awaited and perhaps long overdue announcement on American interest rates.

 

 

 

As we go headlong into the holiday spending season, Statistics Canada reported that the average Canadian’s household debt rose by another 1% in the 3rd-quarter to a record 163.7% of after-tax income.

 

 

 

Cost cutting in the oilpatch continued with Encana Inc. (ECA-T) announcing a 25% cut in their capital budget for 2016 to go along with a cut in their annual dividend from $0.28 to just $0.06-a-share.

 

 

 

North America’s largest 4-season mountain resort Whistler Blackcomb Holdings (WB-T) beat the street with its 4th quarter and year-end financials.

 

 

 

GoPro Inc. (GPRO-Q) shares’ fell by almost 10% to US$17.25 after a number of Wall Street firms downgraded the personal video company.

 

 

 

Tuesday, December 15th saw the price of Valeant Pharmaceuticals (VRX-N) stock surge up by almost 16.5% to US$109.59 on word the beleaguered company had struck a 20-year deal to market some of its medicines through the Walgreen (WBA-N) drugstore chain.

 

 

 

Lumber Liquidators (LL-N) also had a good day as its share price soared up by over 24.6% to US$17.58 on word that an aggressive hedge fund was covering the short position it held against the highly scrutinized flooring retailer.

 

 

 

Conversely, the price of 3M Company (MMM-N) shares’ fell by over 6% to US$148.09 after the giant consumer and industrial products company cut its sales and earnings forecasts for the year ahead.

 

 

 

And then on Wednesday, December 16th the long wait was over as for the first time since the Great Recession (6-years), the Federal Open Market Committee (FOMC) finally raised the U.S. federal funds interest rate by 0.25% to a target range of 0.25 – 0.50% sighting improvement in the labor market and that inflation will rise to its 2% objective.

 

 

 

Shaw Communications (SJR.B-T) announced they had reached a agreement to buy cell phone operator Wind Mobile Corp. in an all cash deal of some $1.6-billion.

 

 

 

Statistics Canada reported that Canadian overnight cross-border travel had fallen by 9% in the first 9-months of the year over the same time period one year earlier.

 

 

 

Thursday, December 17th had technical analysts David Tippin & Ron Meisels comment – “The last phase of a bull market is normally a rough and tumble affair as the reward/risk ratio narrows. December 2015 is living up to this reputation.” (For a complete copy of this report please contact ‘rod.blake@canaccord.com’.)

 

 

 

Deutsche Bank AG – “Oil now trades below the average marginal cost of production in Canada.

 

 

 

The U.S. Department of Commerce reports that the Chinese have overtaken Canadians as the largest buyers of American real Estate.

 

 

 

Bombardier Inc. (BBD.B-T) shareholders finally had a good day on Friday, December 18th as their investment soared up by over 16% to $1.36 after the beleaguered company announced that their long in the tooth C-Series jet airliner had received certification from Transport Canada.

 

 

 

Similarly, the price of BlackBerry Inc. (BB-T) shares’ rose by almost 10.5% to $12.03 after the original smartphone company beat analysts’ expectations with its 3rd-quarter financials.

 

 

 

DHX Media (DHX.B-T) shares’ rose by over 6% to $8.50 on word the company had signed a new long-term partnership with Mattel (MAT-N) for the development, production and distribution of several of Mattel’s products.

 

 

 

RioCan Real Estate Investment Trust (REI.UN-T) took advantage of the extreme US/CAD dollar exchange and sold its entire portfolio of 40-retail properties to Blackstone Real Estate Partners VIII for a reported US$1.9-billion or CAD$2.7-billion.

 

 

 

Standard & Poor’s cites the dramatic drop in oil prices as it cuts Alberta’s debt rating from triple-A to double-A-plus.

 

 

 

And contrary to the drop in energy prices, Statistics Canada reported that the nation’s inflation rate rose by 0.4% in November to an annualized 1.4%.

 

 

 

During the week the price of natural gas fell to a new 13-year low of US$1.94/mmbtus which helped to drag the CRB Spot Commodity Index down to a new 6-year low of 372, which helped to drop the resource weighted Canadian dollar down to a new 13-year low of US$0.7169. The resource heavy TSX Composite Exchange closed at a new 2-year low of 12,695 and the TSX Venture Exchange sank to a new record low of 496.

 

 

 

Horizons US Dollar Currency ETF (DLR-T) at $13.71, NovaGold Resources (NG-T) at $6.34 and Whistler Blackcomb Holdings (WB-T) at $24.18 all established new TSX 52-week closing highs while Bonavista Energy (BNP-T) at $1.63, Canadian Pacific Railway (CP-T) at $168.12 and TransAlta Corp. (TA-T) at $4.10 all fell to new 52-week trading lows.

 

 

 

For the WeekThe Dow Industrials fell by 0.81% to 17,126, with the S&P 500 Index down by 0.35% to 2,005 and the NASDAQ Exchange was off by 0.20% to 4,923. In the country geographically closer to Santa the TSX Composite Index was up by 1.83% to 13,024 while the TSX Venture Exchange was off by 0.20% to 501.

 

 

 

With commodities – Gold bullion lost 1.02% to US$1,065, with copper off by 0.47% to US$2.11, while crude oil dropped by 3.62% to US$35.90 and natural gas fell by 1.01% to US$1.97. Overall, the CRB Spot Commodity Index eased by 0.79% to finish the week at 380.

 

 

 

The Canadian petrodollar fell by 1.38% against its American cousin to end the week at US$0.7169.

 

 

 

And the closely watched CBOE Volatility Index or VIX fell by 3.89-points to finish the week at a much calmer level of 20.50.

 

 

 

And Finally – As 2015 winds down and the holidays approach Farzaneh and I would like to thank you for your ongoing support and wish you a very Merry Christmas and a Happy New Year!

 

 

 

And Finally Finally – The Week is taking the rest of the year off to wind down, recharge and spend some quality holiday time with family and friends. Should all go as planned this publication will once again appear on or about Monday, January 11th, 2016.

Posted December 21, 2015

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