The first week of trading for December begins with the knowledge that the U.S. Dow Industrials and S&P 500 Index are riding a string of seven consecutive weekly gains while the precious metal markets are coming off their second worst month years. (The only one being worst was just in June of this year). The question facing investors now, can they run their consecutive string to the almost unheard of number eight.
Technical analysts David Tippin & Ron Meisels commented on this very topic on Monday, December 2nd in that – “This wise old bull is once again offering a lesson in how an overbought bull market can remain overbought for a surprisingly lengthy period. But the cyclical, technical and sentiment picture suggests that we could see some weakness in December. An early winter chill in advance of a Santa Clause rally would actually be healthy, before going into what we anticipate will be a critical year of reckoning in 2014.”
Adding some more confidence the market was the latest Chinese Purchasing Manufacturers’ Index (PMI) that held steady at the expansionary 51.4 level that it had established just one month earlier.
Also encouraging was a ShopperTrak research summary that showed that retail sales of the American Thanksgiving and Black Friday shopping extravaganza increased by an as expected 2.8% this year to US$12.3-billion.
Talisman Energy (TLM-) learned that when money talks – you listen, as the Canadian petroleum company agrees with billionaire investor Carl Icahn that he should appoint two managing directors to the firm.
Still with oil, Canacol Energy (CNE-T) shares’ moved higher when the Colombian explorer reported that its Leono-1 well had hit a 133-foot net pay zone with four reservoirs.
Hilton Worldwide Inc., the giant hotelier that only just took itself private in 2007, announced it was going public once again with a US$32.5-billion offering made from about 11.5% of its share capital.
Out of the clear blue north, the long suffering shareholders’ of Peregrine Diamonds (PGD-T) got a very nice Christmas surprise as the price of their investment surged up by 50% on Tuesday, December 3rd, when the northern Canadian diamond explorer reported that a kimberlite bulk sample from the CH-6 pipe of their Chidiak Diamond Project in Nunavut returned an amazing assay of 2.70 carats per tonne.
Under our continuing heading of ‘Sell on News’ – The Canadian bank stocks that have been leading the TSX higher for some time now , suffer their first downturn in weeks as they report their 3rd quarter financials, even though for the most part, they handily beat analysts’ expectations.
Don’t look now, but according to the Society for Worldwide Interbank Telecommunication (Swift), the Chinese yuan with an 8.66% market share, has surpassed the euro with a 6.64% market share, as the second most used global currency.
Vehicle sales remained a major driver of the economy as most North American automobile manufacturers reported November sales that beat the street’s expectations.
Barrick Gold Corp. (ABX-T) gave the market a glimpse of its future on Wednesday, December 4th, when the world’s largest gold miner announces that founder and current Co-Chairman Peter Munk will be resigning at their annual meeting next year to be replaces by current Co-chairman John Thornton.
Bombardier Inc. (BBD.B-T) continues to make inroads into the midsize commercial jet market when the world’s number three aircraft manufacturer announces that Iraqi Airlines had ordered five of their CSeries 135-160 seat passenger jets, giving them a total of 419 firm orders for the new quieter and more fuel efficient jetliners.
And this just in – Twenty First Century Fox (FOXA) announced they had already sold out all of the commercial spots for February’s Super Bowl game, with an average 5% increase over last year to the tune of………now wait for it…….US$4-million for a 30-second spot.
Conn’s Inc. (CONN-Q) shares’ rose by over 20% on Thursday, December 5th, when the American retailer reported a solid 3rd quarter.
The economic numbers continued to improve with Statistics Canada reporting that the value of the country’s building permits rose by a much better than expected 7.4% in September to $7.2-billion.
China put a touch of sanity on the Bitcoin craze by banning commercial exchanges of the virtual currency in that – “Bitcoins are not a currency in the real sense of the word, but rather a virtual commodity that does not share the same legal status of a currency. Nor can, or should, it be circulated or used in the marketplace as a currency.”
All eyes were on the labour front Friday, December 6th, as Statistics Canada reported the economy created a better than expected 21,600 new jobs in November which kept the country’s unemployment rate steady at 6.9%. Down south, the U.S. Labor Department reported their economy created a much better than expected 203,000 new jobs last month which helped to lower their unemployment rate by another 0.2% to 7.0%. (Can anyone dare to say – “Watch out for U.S. Fed tapering.”).
Adding to the optimism was the latest University of Michigan’s closely watched Confidence Index that rose by 4-points in November to a 5-month high of 82.5.
Gold stocks just can’t seem to get a break these days, as was the case with Colossus Minerals (CSI-T) that saw its share price plunge by 38% to just $0.16 when the junior miner said that in order to reduce costs it had to stop production at its Serra Pelada gold mine in Brazil.
Improving world economics helped drive forestry stocks higher with Canfor Corp. (CFP-T) at $24.43, Domtar Corp. (UFS-T) at $95.86, Int’l. Forest Products (IFP.A-T) at $12.65 and Western Forest Products (WEP-T) at $1.77 all establishing new TSX 52-week trading highs while, like a truck stuck in the mud, gold stocks once again sunk lower with Goldcorp Inc. (G-T) at $22.14, New Gold (NGD-T) at $4.99, Newmont Mining (NMC-T) at $24.50 and Yamana Gold Inc. (YRI-T) at $8.86 all setting new 52-week trading lows.
For the Week – That string of weekly wins for the DJIA and S&P 500 markets finally came to an end at eight, as the Dow Industrials lost 0.41% to 16,022, with the S&P 500 Index easing by 0.15% to 1,803, while the NASDAQ Exchange managed a further marginal gain of 0.07% to 4,063. To the frigid north, the TSX Composite Index lost 0.86% to 13,281 and the TSX Venture Exchange dropped by 1.96% to 917.
Gold bullion lost 1.77% to US$1,228.30-an-ounce, while copper gained 1.25% to US$3.25-a-pound, crude oil gained 5.77% to US$97.62-a-barrel and natural gas advanced by 4.05% to US$4.11/1mbtu. The CRB Commodities Index followed natural gas prices higher to gain another 1.04-point to end the week at 278.66.
The Canadian dollar eased by a further 0.44% over the week against the U.S. buck to US$9384.
And Finally – With the Christmas shopping season now fully upon us, you may find it of interest that according to the PNC Wealth Management’s Christmas Price Index; the cost of buying the set of gifts from the 12 Days of Christmas has risen by 7.7% in the past year to $27,393.
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