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The Week of December 8th to December 14th, 2014 “A Brief Look Back Into Tomorrow”

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The Week of December 8th to December 14th, 2014 “A Brief Look Back Into Tomorrow”

 

 

 

 

 

The new week begins on Monday, December 8th with the American Dow Industrials and S&P 500 Indexes ridding a six week winning streak that took them to record highs, while the Canadian markets are left looking in from the cold and wondering why they weren’t invited to come and play as well.

 

 

 

Norbord Inc. (NBM-T) and Ainsworth Lumber Co. (ANS-T) announce that the former will acquire the later in a $763-million all stock deal that will create the North America’s largest supplier of oriented strand board (OSB).

 

 

 

When Morgan Stanley speaks the market listens – Especially when it comes to crude oil and petroleum companies as the price of crude oil suddenly dropped another $2,81 to US$63.03, followed by large drops in the price of oil stocks such as Baytex Energy (BTE-T), ConocoPhillips (COP-N), Precision Drilling (PD-T), Trilogy Energy (TET-T) and Vermilllion Energy (VET -T) to name but a few of the companies that announced capital spending cutbacks  or dividend cuts after the American corporate banker projected the price of crude would to fall to US$43-a-barrel over the next year.

 

 

 

All of which pulled the petroleum rich TSX down at one point by 490-points before finally closing down some 329-points or 2.28% to 14,144.

 

 

 

This all but nullified the impact of the Canada Mortgage and Housing Corp. report that the country’s housing starts rose by almost 12,000 last month to a seasonally adjusted 195,620 units.

                                

 

 

BlackBerry Ltd. (BB-T) announced they had teamed up with American healthcare technology company NantHealth LLC to launch a platform that will allow medical professionals to access cancer patient data and make treatment decisions from their Passport smartphone.

 

 

 

Tuesday, December 9th saw the markets stabilize on along with the price of crude oil. (At least for one day…).

 

 

 

 

Some oil stocks actually rallied as did Talisman Energy (TLM-T) shares’ by almost 12% to $4.81 when the petroleum company confirmed it was in discussions with many entities including Spain’s state oil company Repsol on ways to enhance Talisman’s shareholder value.

 

 

 

Conversely, the shares’ of AGF Management (AGF.B-T) fell by over 16.6% to $8.28 when the company slashed its quarterly dividend by 70% to just $0.08-a-share.

 

 

 

And the price of Conn’s Inc. (CONN-Q) shares plunged by over 40.6% to US$20.83 when the discount retailer reported an unexpected 3rd quarter loss.

 

 

 

Already shaken Canadian investors were shaken again on Wednesday, December 10th when Bank of Canada Governor Stephen Poloz informed the nation that their biggest piggy bank, their homes, were overpriced by as much as 30%.

 

 

 

OPEC did their best to keep the price of crude oil depressed when the consortium lowered the demand forecast for its crude by 300,000 barrels/day to a 12-year low of 28.9-million barrels-a-day.

 

 

 

Those two statements was all it took to drag the TSX Composite Index down by another  343-points to close at 13,853.

 

 

 

Costco Wholesale (COST-Q) reported their 3rd quarter profit rose by almost 17% to   US$1.09-a-share.

 

 

 

The markets rose on Thursday, December 11th as better than expected U.S. retail sales and unemployment figures too investors’ attention away from the pummelling price of crude oil.

 

 

 

lululemon athletica (LULU-Q) shares’ rose by over 9% to US$50.96 after the somewhat criticised yogawear retailer beat the street with its 3rd quarter financials.

 

 

 

Conversely, the share price of Wet Seal (WTSL-Q) plunged by over 70% to just US$0.08 when the young women’s retailer reported it may be forced to apply for Chapter 11 bankruptcy protection due to immediate liquidity shortfalls.

 

 

 

The reality of fighting inflation due to falling crude oil prices and a depressed currency bites the Russian economy once again as their central bank raised its key interest rate by another one percent to 10.5%, a full 2.5% higher than it was just 6-weeks ago.

 

 

 

Ivanhoe Energy (IE-T) saw its share priceplunge by over 40.5% to $0.60 on Friday, December 12th when the company announce it does not expect to make a $2.2-million interest payment due at the end of December.

 

 

 

Talisman Energy (TLM-T) shares’ surged up by over 18% to $5.04 on word that executives of Spain’s state owned petroleum company Repsol S.A. were in Calgary in an effort to hammer out a deal to acquire the long suffering African petroleum company.

 

 

 

The week gave us more extended lows with natural gas falling to a new 1-year low of US$3.60/mmbtus, while crude oil plunged to a new 5½ -year low of US$57.84/barrel, the Canadian loonie reached a new 5½ -year low of US$0.86.39. The TSX fell to a 1-month low of 13,732 and the TSX Venture Exchange dropped to a new all-time closing low of 654.

 

 

 

Consumer related stocks continued to be the flavour of the week as Cargojet Inc. (CJT-T) at $26.65, Dollarama Inc. (DOL-T) at $57.90, Whistler Blackcomb Holdings (WB-T) at $20.69 all setting new TSX 52-week closing highs while petroleum stocks continued their drag with Cenovus Energy (CVE-T) at 20.06, Suncor Energy (SU-T) at $32.29 and Trican Well Service (TCW-T) at $5.30 all hit new 52-week closing lows.

 

 

 

For the WeekThe Dow Industrials fell by 3.78% to 17,281, with the S&P 500 Index down on the week by 3.52% to 2,002 and the NASDAQ Exchange off by 2.66% to 4,654. Across the border the TSX Composite Index dropped by 5.13% to 13,732 and the lowly TSX Venture Exchange dropped by 6.84% to 654.

 

 

 

Gold bullion gained another 2.69% to US$1,222, with copper up by another 1.03% to US$2.93, while crude oil plunged by 12.15% to US$57.84 and natural gas lost 0.79% to US$3.77. Overall, the CRB Spot Commodities Index eased by another 0.66% to 449.

 

 

 

The Canadian dollar lost 1.18% to its U.S. counterpart to end the week at US$0.8639.

 

 

 

And the closely watched CBOE Volatility Index or VIX surged upwards by 9.95-points to finish the week at a very much more nervous level of 21.77.

 

 

 

And Finally – As you round out your holiday purchases this year it may be of interest that th good people of PNC Wealth Management have calculated that led by a 71% surge in the price of geese-a-laying, the price of the items for the Twelve Gifts of Christmas increased by 1.4% in the past year to US$116,273.06.

 

 

 

And Finally, FinallyThe Week is taking the rest of the year off to fully enjoy the Holiday Season and take a break from what has been a year of extremes in the markets. We wish you and yours a very Merry Christmas and a Happy New year, and if all goes well this publication will be back in your inbox sometime around Monday, January 12, 2015 to shadow what we’re sure will be a another very interesting year.

Posted December 15, 2014

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