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The Week of February 22nd to February 28th, 2016 “A Brief Look Back Into Tomorrow”

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The Week of February 22nd to February 28th, 2016 “A Brief Look Back Into Tomorrow”






The new trading week began on Monday, February 22nd with investors overall encouraged by the previous week’s market gains and ‘gold bugs’ ecstatic that their prised yellow metal had finally reached a one-year high.




CAE Inc. (CAE-T) spread its wings a little further as the world’s largest flight simulator company announced a conditional agreement had been reached for the Canadian based company to acquire Lockheed Martin’s (LMT-N) commercial flight training unit.




Lumber Liquidators (LL-N) shares’ plunged by almost 20% to US$11.40 following a Centers for Disease Control and Prevention update that suggested that the incidences of cancer in people exposed to the retailers China made laminate flooring was 3-times greater than previously estimated.




And the share price of Valeant Pharmaceuticals (VRX-N)) fell by almost 11% to US$75.92 after the giant pharma company announced to a nervous market that it may have to reinstate previous year’s financials.




The British pound lost a lot of its luster as the silver backed currency fell by 2.1% to US$1.4107 after London Mayor Boris Johnson argued for Britain to leave the European Union in this June’s referendum.




Tuesday, February 23rd saw the share price of BHP Billiton (BHP-N) fall by almost 5% to US$24.09 after the giant Australian based miner join many of its counterparts by cutting its dividend by 75% as the company braces for – “A longer-than-expected commodities downturn.”




Conversely, Home Depot (HD-N) shareholders were greeted to the day with their home improvement company raising its quarterly dividend by 17% to US$0.69-a-share as well as announcing a US$5-billion share buyback plan.






And the shareholders’ of Newport Corp. (NEWP-Q) were pleased to see their investment soar up by over 51% to US$22.70 on word their company was being acquired by fellow electronics company MKS Instruments in an all-cash deal of some US$897-million.




Just to put China’s reliance on coal in some perspective, the Financial Post reports that coal makes up almost 70% of that country’s energy mix, and that close to 80% of its electricity is generated by coal-fired plants. But in an effort to clean up its air the eastern country intends to close some 4,900 (yes – 4,900) of its coal mines over the next 3-years.




Canadian marijuana stocks mostly traded loweron Wednesday, February 24th after a federal judge struck down the Marihuana Medical Purposes Regulation (MMRP) that restricted the rights of medical patients from growing their own medicine.




A couple of energy stocks finally got some respect on when Encana Inc. (ECA-T) and Chesapeake Energy (CHK-N) both surged higher by over 22% after announcing further cost cutting and debt reducing measures.




DineEquity Inc. (DIN-N) shares’ rose by almost 9% to US$93.92 after the company reported a 4th-quarter profit with the help of improved performance of its IHOP chain of restaurants.




Thursday, February 25th gave us a winner in the oil & gas space as the share price of Boulder Energy (BXO-T) soar up by almost 68% to $2.55 when the explorer agreed to be taken private by ARC Financial in an all-cash deal of some $268-million.




Making deliveries within 15-minutes paid off for Domino’s Pizza (DPZ-N) shareholders as they saw their investment rise by 13% to US$132.90 after the pizza giant reported better than expected 4th-quarter financials.




Conversely, Restoration Hardware (RH-N) shares’ plunged by almost 26% to US$38.49 after the retailers’ 4th-quarter financials failed to meet the streets’ expectations.




Friday, February 26th had Goldcorp Inc. (G-T) shares’ falling by over 13% to $18.73 after the miner joined a growing list of resource companies to take major write-downs and slash their dividend.




The World Nuclear Association reported that Japan had re-started its Takahama 4 nuclear power reactor – the fourth unit re-started of a total of 26 reactors that were taken offline following the Fukushima tsunami.




Weight Watchers (WTW-N) shares’ plunged by over 29% to US$11.01 after the company reported less than impressive 4th quarter financials.




During the week the TSX Venture Exchange reached a new 4-month closing high of 538 while the price of natural gas fell to a 17-year low of US$1.79/mmbtus.




Asanko Gold (AKG-T) at $2.95, Intl. Road Dynamics (IRD-T) at $1.51 Pollard Banknote and (PBL-T) at $8.95 set new TSX 52-week trading highs while Aralez Pharmaceuticals  (ARZ-T) at $7.17, Catalyst Paper (CYT-T) at $1.25 and O’Leary Canadian Diversified Fund (ODI.UN-T) at $8.81 all fell to new 52-week trading lows.




For the Week – The Dow Industrials rose by 1.51% to 16,640, while the S&P 500 Index improved by 1.56% to 1,948 and the NASDAQ Exchange gained 1.91% to 4,590. In Canada, the TSX Composite Index was off by 0.12% to 12,798 and the TSX Venture Exchange rose by 1.32% to 538.




With commodities, gold bullion dropped by 0.49% to US$1,225, with copper up by 1.92% to US$2.12, while crude oil gained 3.87% to US$32.98 and natural gas fell by 4.28% to US$1.79. Overall, the CRB Spot Commodity Index dropped by 0.52% to end the week at 383.




The Canadian dollar improved by 1.84% against its American cousin to finish the week at US$0.7399.




And the closely watched CBOE Volatility Index or VIX eased down by 0.82-point to end the week at a somewhat calmer level of 19.71.




And Finally – As this is the time of year that the wealth management industry focuses on retirement – it is if interest to note that a recent Ipsos survey found that most retirees are living comfortably on 62% of their working income or just over $2,600-a-month.

Posted February 29, 2016

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