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The Week of February 24th to March 2nd, 2014 “A Brief Look Back Into Tomorrow”

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The Week of February 24th to March 2nd, 2014 “A Brief Look Back Into Tomorrow”






The last trading week of the second month begins with investors of the U.S. markets wondering if there is one more push left to propel their market higher, while those on the Canadian side are hoping they might get a fourth consecutive weekly advance.




Monday, February 24th sees the board of directors of Augusta Resource Corp. (AZC-T) officially rejecting the unsolicited takeover offer from mining giant HudBay Minerals (HBM-T).




Netflix Inc. (NFLX-Q), who by some estimates ties up some 30% of internet usage at certain times if the day, announced a deal with Comcast Corp. (CMSA-Q) that will see the broadband provider release more space to the streaming video giant so that their subscribers will have a more enjoyable viewing experience.




Those hoping that the price of gold bullion will shortly sore to great new highs may want to note that the World Gold Council reported that overall gold demand fell by 15% in 2013 and that the gold market had a surplus of some 583-tonnes during the year.




Newalta Corp (NAL-T) shares’ rose by almost 7% to $18.50 when the industrial recycler reported better than expected 4th quarter financials.




Uranium stocks got a welcome lift on Tuesday, February 25th after the Government of Japan said it is once again looking to nuclear power production to help fulfil its energy needs, some 3-years after their disastrous tsunami and Fukushima nuclear plant meltdown.




The share price of Office Depot (ODP-N) fell by almost 9% when the retailer reported an unexpected 4th quarter loss and worse yet, gave guidance of declining sales going forward.




Conversely, Tesla Motors (TSLA-Q) shares’ roared up by almost 14% to US$248.00 when Morgan Stanley suggested that new breakthroughs in battery technology would help to propel the premier electric car company’s stock price to hit US$300-a-share. This was followed by the company saying it was scouting sights in several American states in which to set up a battery US$5-billion, 10-million square foot ‘Gigafactory’ to produce its own batteries, which in turn put a fire under the lithium stocks that trade the various exchanges.




Statistics Canada reaffirmed that life is good in Canada after releasing figures that show the median net worth of Canadian families rose by 44.5% from 2005 – 2012 to $243,000.




Tim Hortons (THI-T) Canada’s iconic coffee shop company announced they intend to open a

further 500 Canadian outlets over the next 5-years to fill in the gaps that their existing 3,588 Canadian outlets don’t quite reach.




Ballard Power Systems (BLD-T) shares’ rose by over 14% to a new 52-week high of $3.74 on Wednesday, February 26th when the long forgotten clean energy fuel cell manufacturer posted much stronger than expected 4th quarter financials.




First Solar (FSLR-Q) shares’ took a 9% hit to US$52.72 when the company failed t meet the streets expectations with its 4th quarter financials and worse yet, forecast further weak earnings going forward.




In a move meant to plan for the future, U.S. President Barack Obama announced he would be asking Congress for some US$300-billion to upgrade America’s aging roads and railways. (Come to think of it – Whatever happened to the Arnold Schwarzenegger/Gordon Campbell ‘Hydrogen Highway’ that the former Governor of California and Premier of British Columbia jointly announced so many years ago that would soon be running up and down the west coast of North America.)




Like a fighter that won’t stay down, Taseko Resources (TKO-T), whose share price was plummeted by over 5% to $2.25 on Thursday, February 27th when the Federal Environment Ministry turned down the company’s production application for a second time, vowed to press on with the application process until the Federal Government finally approved what would eventually become Canada’s and one of the world’s largest open pit copper mine.




All of the major Canadian banks reported their 1st quarter financials over the week and once again they didn’t disappoint as all reported a moderate increase in earnings and better yet, an increase in their annual dividends




The shareholders’ of Coastal Contacts (COA-T) were pleased t see their investment surge up by over 20% to $12.49 when the contact lens company agreed to a $430-million all-cash takeover bid from global ophthalmic company Essilor International.




Pilot Gold Inc. (PLG-T) and Nevada Sunrise Gold (NEV-V) shares’ also surged up almost 20% and 107% respectively, when the joint venture partners reported encouraging drill hole gold assays from their Kinsley Mountain Western Flank target in Elko County, Nevada.




And J.C. Penny (JCP-N) shares’ rose by over 25% to US$7.47 when the beleaguered American retailer reported it made a profit over the Christmas season and better yet, forecast a small improvement in sales going forward.




Under the heading of – ‘What Goes Around Comes Around’ – McDonald’s Corp. (MCD-N) the original no substitutions fast food restaurant announced it was going to test allowing customers to input requests to build their own hamburgers.




The last trading day of the week begins with the shocking or not-so-shocking news that Bitcoin’s largest trading exchange, Mt. Gox in Tokyo, had applied for bankruptcy protection after confirming that about 850,000 or US$25-million of the unregulated electronic exchange’s coins had gone……now wait for it……missing.




With The Lego Movie having current box office success, it comes as an interesting coincidence that the world’s largest toy maker Mattel Inc. (MAT-N) made a friendly US$460-million takeover bid for Montreal’s  MEGA Brands Inc. (MB-T), the world’s second largest retailer behind giant Lego AS of children’s US$4-billion construction block toy business. MEGA Brands shares’ surged up by over 35.5% to $17.72 on news of the takeover.




The North American markets ended the week on a mixed note after Statistics Canada reported the economy grew in the 4th quarter at a better than expected annualized 2.9%, while the U.S. Commerce Department revised their 4th quarter growth down by 0.2% to an annualized 3.0%. And overseas, Russian troops were reported to have taken up strategic positions in the politically unstable Ukraine.




And new intermediate and long term highs were established over the week with the TSX Venture Exchange trading up to a new 10-month high of 1,025, with the TSX Composite Index rising to a new 3-year high of 14,227, the NASDAQ Exchange establishing a new       14-year closing high of 4,319 and the S&P 500 Index reaching a record closing high of 1,859.




Individually, Cameco Corp. (CCO-T) at $27.19, EnCana Corp. (ECA-T) at $21.75 and Newalta Corp.  (NAL-T) at $19.25 all established new 52-week TSX closing highs, while Argent Energy Trust (AET.UN-T) at $5.70, NovaCoppper Inc. (NCQ-T) at $1.37 and TransAlta Corp. (TA-T) at $12.43 all found new 52-week trading lows.




For the WeekThe Dow Industrials rose by 1.37% to 16,323, with the S&P 500 Index up by 1.26% to 1,859 and the NASDAQ Exchange ahead on the week by 1.06% to 4,308. To the blame winter on us north, the TSX Composite Index managed a marginal weekly gain of 0.03% to 14,210 while the TSX Venture Exchange ended the week with a gain of 0.44% to 1,025.




Gold bullion advanced by another 0.20% to US$1,327, while copper dropped by 2.45% to US$3.19. Meanwhile Crude oil rose by 0.33% to US$102.52 and natural gas fell by 7.78% to US$4.62. Overall, the CRB Commodities Index advanced by another 1.85-points to end the week at a new 11-month high of 303.10.




With currencies, the Canadian dollar improved by 0.57% to end the week at US$0.9032.


And the closely watched CBOE Volatility Index (VIX) eased by 0.68-points to end the week at a little calmer level of 14.00.




For the Month of February – The TSX gained 3.76%, the TSX Venture rose by 7.78%, the DJIA rose by 3.97%, the S&P 500 improved by 4.26% and the NASDAQ gained 4.97%.




Gold bullion gained 6.94% in February, copper lost 0.31%, crude oil rose by 5.18% and natural gas fell on the month by 6.88%.




And Finally – This is just a friendly reminder that it is up to the owner of a government issued bond to keep track of their maturity as both the Canadian and United States governments have confirmed that they are holding $420-million and US$16-billion respectively of mature bonds that are no longer paying any interest and have yet to be redeemed by their bondholders.



Posted March 3, 2014

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