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The Week of December 17th to December 23rd, 2018 “A Brief Look Back Into Tomorrow”

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The Week of December 17th to December 23rd, 2018 “A Brief Look Back Into Tomorrow”

 

 

 

 

 

The new North American trading week began on Monday, December 17th with investors wondering how was it that Scrooge was able to steal the anticipated Santa Clause year-end market rally. To which technical analysts David Tippin & Ron Meisels commented – “The bears are currently in the ascendency but, with the bull market deeply oversold and downside exhaustion growing, a turning point is near at hand”. (For a complete copy of this report lease contact rblake@cgf.com)

 

 

Petroleum stocks dropped in unison as the price of crude fell below US$50 on continued concerns of an oversupplied market.

 

 

Conversely – gold stocks rose as the price of the yellow metal once again rose up to US$1.250-an-ounce.

 

 

Equity markets traded defensively lower in anticipation of a U.S. Fed interest rate increase later in the week.

 

 

Boeing Co. ‘BA-N’ and Brazil’s Embraer announce a 80/20 joint venture to produce commercial aircraft going forward.

 

 

Tuesday, December 18th saw the price of Tilray Inc. ‘TLRY-Q’ stock surge up by 16% to US$76.50 after the Nanaimo, BC based marijuana grower announced a collaboration with Germany’s pharmaceutical giant Sandoz AG to market Tilray’s cannabis products internationally.

 

 

Boeing Co. ‘BA-N’ shares’ rise by almost 4% to US$328.06 after the world’s largest aeronautical company not only raised its quarterly dividend by 20% to $2.055/share, but also raised its share buyback program by $2-billion to US$20-billion.

 

 

Wednesday, December 19th had Statistics Canada report that – helped by a drop in petroleum prices – the country’s annual inflation rate fell by 0.7% in November ot just 1.7%.

 

 

The U.S. Federal Reserve (Fed) did as expected and raised its key federal funds rate by 0.25% to a range of 2.25% – 2.50%.

 

 

Labatt Breweries Canada announced it will invest up to $50-million in Nanaimo, BC based marijuana company Tilray Inc. ‘TLRY-Q’ to develop non-alcoholic cannabis-based beverages.

 

 

Home Capital ‘HCG-T’ shares’ fell by 15% to $14.00 on word that master investor Warren Buffet’s Berkshire Hathaway ‘BRK-N’ was exiting his position in the alternative mortgage company.

 

 

Facebook Inc. ‘FB-Q’ stock dropped by over 7% to US$133.24 on word that the District of Columbia was taking the social media to court for alleged personal security breaches.

 

 

First Quantum Minerals ‘FM-T’ warned on Thursday, December 20th it would lay off 2,500 Zambian workers if that African country’s government follows thru with recently announced tax and royalty increases.

 

 

Precious metal stocks rose in tandem as gold bullion rose by $12 to a new 6-month high of US$1,268-an-ounce.

 

 

Conversely – petroleum associated stocks weathered a wall of selling as crude oil dropped to a new 15-month low of US$46.19-a-barrel.

 

Friday, December 21st had Statistics Canada report that – led by manufacturing – the country’s gross domestic product (GDP) rose in October by a better than expected 0.3%.

 

 

Industry sources reported that Canada’s shipments of crude oil by rail rose by over 21% in October to a record 327,000-barrels-per-day.

 

 

Petroleum industry analyst Baker Hughes ‘BHGE-N’ reported that the number of active American drilling rigs rose by 9-rigs last week to 1,080 active drilling rigs. While up north – the number of Canadian active drilling rigs fell by 43-rigs to 131 active drilling rigs.

 

 

Nike Inc. ‘NIKI-N’ shares’ rose by over 7% to US$72.37 after the giant sportswear company handily beat analysts’ expectations with its 3rd-quarter report.

 

 

During the Weekgold bullion rose to a new 6-month high of US$1,264-an-ounce, as crude oil fell to a new 11/4-year low of US$45.40-per-barrel and the Canadian petro-dollar fell to a new 1½ -year low of US$0.7353. Meanwhile, the Dow Industrials and S&P 500 dropped to respective 1¼-year lows of 22,445 and 2,417 and the NASDAQ fell to a new 10-month low of 6,333. Up north – the TSX Composite fell to a new 1½-year low of 13,936 and the TSX Venture cratered to a new 2¾ -year low of 530. And the VIX climbed to a 10-month high of 28.38.

 

 

Holloway Lodging ‘HLC-T’ at $6.46, Kirkland Lake Gold ‘KL-T’ at $34.18 and Sportscene Group ‘SPS.A-T’ at $9.95 all rose to new TSX 52-week trading highs while Canadian Imperial Bank of Commerce ‘CM-T’ at $101,31, Encana Corp. ‘ECA-T’ at $7.53 and MCAN Mortgage ‘MKP-T’ at $12.91 all fell to new 52-week trading lows.

 

 

For the Week – the Dow Industrials lost 6.87% to 22,445, with the S&P 500 off by 7.04% to 2,417 and the NASDAQ down by 8.36% to 6,333. Meanwhile, further north, the TSX Composite dropped by 4.52% to 13,936 and the TSX Venture fell by 4.68% to 529.

 

 

With Commoditiesgold bullion rose by 1.37% to uS$1,258, while copper fell by 3.26% to US$2.67, as crude oil dropped by 11.79% to US$45.40 and natural gas sank by 4.16% to US$3.46. Overall, the CRB Spot Commodity Index fell by 0.96% to end the week at 412.

 

 

The Canadian dollar lost 1.57% against its southern counterpart to finish the week at US$0.7353.

 

 

And the closely watched CBOE Volatility Index or VIX surged up by 8.26-points to end the week at a much more nervous level of 29.89.

 

 

And Finally – For years now environmentalists have expounded how their agenda is gaining economic traction – the numbers would tend to say that there is much more talk than action – as a recent Statistics Canada report reveals that environmental and clean-technology industries accounted for just 3.1% of Canada’s GDP in 2017 – relatively unchanged from when data was first complied in 2007.

 

 

And Finally, Finally – The Week is taking the rest of the year off. If all goes according to plan this publication will re-appear on or about Monday, January 7th.

 

Posted December 22, 2018

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