The new week began with the knowledge that the amazing string of consecutive weekly wins for the Dow Industrials and S&P 500 Index had finally come to an end, and left investors wondering if the American major markets had now begun their long anticipated correction or would they be able to shake off this as a minor setback and once again move higher. Meanwhile gold bullion continued to be a drag on the resource markets while extreme winter weather across much of North America bid natural gas higher.
The U.S. Treasury Department announced on Monday, December 9th that they had finally divested themselves of the last of the General Motors (GM-N) stock they had acquired during the financial meltdown of 2008. The Treasury took an estimated US$11-billion loss on its US$50-billion emergency loan to the troubled big three automaker, that the Center for Automotive Research (CAR Group) estimates ultimately saved some 2.63-million industry wide jobs and their taxable spinoffs.
AMR Corporation, the parent of American Airlines and US Airways Group (LCC-N) announce a completion of their merger to form American Airlines Group which will have some 6,700 flights a day to 330 destinations covering fifty countries, with an entity that CEO Doug Parker says – “Is taking the best of both US Airways and American Airlines to create a formidable competitor.”
Tim Hortons (THI -T), that iconic symbol of Canadian fast food has decided to improve the customer experience at their coffee & donut shops by….now wait for it…..putting the smell of fresh baked donuts being cooked back into the air of their shops. (Who knew…?).
Low metal prices continue to force miners to make tough decisions as was the case of Thompson Creek Metals Co. (TCM-T), which stated that low molybdenum prices may force the company to close its Endako and Thompson Creek molybdenum mines.
Statistics Canada reported that the country’s new housing starts eased by 5,926 units in November to an annualized192,235 starts.
Volkswagen announced that its iconic Micro-Bus, that is still being produced in one assembly plant in Sao Bernardo do Campo, Brazil, will cease production on December 31st because the vehicle no longer meets modern safety regulations.
Pacific Booker Minerals (BKM-V) proved that yes, you can fight city hall, or in this case the BC Provincial Government, as its stock price soared by some 67% to $7.00 on Tuesday, December 10th, on word that Justice Kenneth Affleck had ruled that the Provincial Government had no grounds to unilaterally turn down the company’s proposed mine development plan for its Morrison copper/gold project in northern British Columbia, without first letting the company present its application to the proper channels for an unbiased consideration. And bonus – they were also awarded costs.
Gabriel Resources (GBU-T) had yet another bad day as its stock price fell by over 17% to $0.95 when yet another level of the Romanian Government, in this case the lower house of parliament, failed to amend their general mining legislation that would have enabled the company to move ahead with its beleaguered gold project in that country.
Mary Barra showed she wore the pants of the automotive world as General Motors (GM-N) announced their current chief of global product development had been promoted to Chief Executive Officer (CEO) of the giant American automotive company, the first woman to hold such a prestigious position.
lululemon athletica (LULU-Q) Chairman Chip “Some women’s bodies just actually don’t work for wearing lululemon pants” Wilson announced he was stepping down from that prestigious position of the stylish yogawear company.
Figures from American home builder Toll Brothers (TOL-N) seemed to confirm the improved U.S. housing market as the company reported it had delivered 1,485 or 36% more units in the recent quarter over the same period just one year ago. Also of note, the average home they delivered cost US$703,000 this year as opposed to just US$582,000 last year.
With what is beginning to look like a trend, Kellogg Co. (K -N) followed the recent leads of Caterpillar Inc, (CAT-N), H.J. Heinz Co., and Smuckers in closing its Ontario production plant, leaving Canada’s largest province with a loss of some 33,000 factory jobs in the past 12-months alone.
Canada Post gave us some insight into their future on Wednesday, December 11th, when the country’s primary mover of mail said they would phase out individual home delivery of mail over the next five years in favour of community mail boxes, and it also gave us a dose of reality when the money losing crown corporation also said it would be raise the price of a single stamp by 36% next March to $0.85.
The shareholders of Southern Pacific Resources (STP-T) took one to the jaw on as they watched their investment tumble by over 54% to $0.11 when the mid tier petroleum producer’s production report for November was well below the market’s expectations.
The share price of Cangene Corp. (CNJ-T) surged up by 0ver 26% to $3.41 on Thursday, December 12th, when the Canadian biopharmaceutical company agreed to a $236-million all-cash takeover by Emergent BioSolutions (EBS-N).
Terange Gold (TGZ-T) also had a good day as its share price rose by almost 30% to $0.57 on word the junior gold producer had entered into a streaming agreement with Franco Nevada (FNV-T) that will see the junior producer receive US$135-million now from Franco against delivery of a discounted portion of its future gold production.
Under the heading of ‘The Russians are Coming! The Russians are Coming!‘ – Russia’s Intergeo MMC Ltd. takes advantage of a distressed mineral market by injecting US$100-million into and taking control of financially stressed junior copper miner Mercator Minerals Ltd.(ML-T) and its Mineral Park copper mine in Arizona.
Statistics Canada gave us a little good news and not-so-good news on Friday, December 13th. The good news was that was that the Canadian net worth rose by another 2.2% in the 3rd quarter to $162-billion or $212,700 per person. The not-so-good news was that our average net debt-to-income ratio rose by another 0.6% in the same time period to 163.7%.
(So let’s do all we can to keep those real estate prices rising…).
In spite of an overall loss for the week, the markets were once again able to attain new multi-year or record highs early on with the NASDAQ Exchange closing at a new 13-year high of 4,068 and the S&P 500 Index closing at a new all-time high of 1,808.
Housing related and consumer stocks continued their advance over the week with Canfor Corp. (CFP-T) at $24.84, Domtar Corp. (UFS-T) at $96.91, RONA Inc. (RON-T) at $13.54, and Molson Coors Canada (TPX.B-T) at $58.66, all hitting new 52-week TSX trading highs, while the resource side continued to be a drag with Ivanhoe Energy (IE-T) at $0.38, Premier Gold Mines (PG-T) at $1.33 and Trican Well Service (TCW-T) at $11.97, along with Canadian smartphone maker BlackBerry Ltd. (BB-T) at $5.79, all hitting new 52-week lows.
For the Week – The Dow Jones Industrials lost another 1.65% to 15,755, with the S&P 500 Index off by 1.54% to 1,775 and the NASDAQ Exchange down on the week by 1.53% to 4,001. In the home of Santa Clause, the TSX Composite Index fell by 1.17% to 13,126 and the TSX Venture Exchange lost 2.41% to 894.
Gold bullion gained 0.73% to US$1,237.30-an-ounce, while copper rose by 1.85% to US$3.31-a-pound, crude oil lost 0.88% to US$96.76-a-barrel and natural gas gained 5.11% to US$4.32/mmbtu. The CRB Commodities Index gained 1.01-points to end the week at 279.66.
The Canadian dollar improved by 0.54% against its American counterpart to end the week at US$0.9435.
The closely watched CBOE Volatility Index (VIX-N) rose by 1.97-points to cross above 15 and end the week at a slightly more nervous level of 15.76.
And Finally – As we quickly close in on the end of 2013, it is of interest that a recent Manulife Bank survey found that 57% of the surveyed group felt disappointed in the way they had handled their personal debt in the past year, and that being debt free was still their ultimate goal. (Now if anyone ever needed an idea for a New Year’s resolution, this just might be it.).
And Finally, Finally – As the economic news flow will be coming to an abrupt halt over the holiday season, so too The Week will take a few weeks off to reflect on the past year, enjoy the company of friends and family, and recharge for what most assuredly be a very interesting year to come. From us to you, have a very merry and safe Christmas and Holiday Season. If all goes well The Week will once again be in your inbox on Monday, January 13, 2014. Thank you for your interest and support.
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