The new trading week began on Monday, February 8th with just a hint of a change appearing in investment sentiment in the air as the major North American markets seemed to have broken down, but the Gold Bugs were shouting a collective ‘Yes!” as the yellow metal was suddenly trading at multi-month highs.
China, Russia and Kazakhstan all increased their holdings of gold bullion in 2015.
And to add to the gold fever, Tahoe Resources (THO-T), a Guatemalan silver producer, announced they were taking over Ontario based Lake Shore Gold (LSG-T) in a friendly all-cash deal of some $945-million.
After many months of lobbying, Suncor Energy (SU-T) announced they finally had enough votes (73%) to proceed with their takeover of coveted Canadian Oil Sands (COS-T).
Anheuser-Busch (BUD-N) got the equivalent of an unexpected US$3.2-million advertizing bonus following last Sunday’s Super Bowl game after winning quarterback Peyton Manning twice announced in post-game interviews that he was going to enjoy a Bud as soon as possible.
Chesapeake Energy (CHK-N) shares’ plunged by over 33% to US$2.05 on rumors the natural gas company was consulting with advisors and considering a restructuring plan.
Tuesday, February 9th saw Fortis Inc. (FTS-T) take a large portion of their petro-loonies across the line to acquire American mid-west electric transmission company Itc Holdings Corp. (ITC-N) in a cash & stock deal of some US$11.3-billion.
Cineplex Inc. (CGX-T), reported that last December’s release of Star Wars helped Canada’s largest movie theater chain to record far better than expected 4th-quaerter earnings.
Meanwhile, in a similar industry south of the border, Twenty-First Century Fox (FOXA-Q) became another of a growing list of American companies with foreign sales to state that a strong U.S. dollar was impacting their bottom line.
U.S. Federal Reserve Chair Janet Yellen released and spoke towards her semi-annual monetary policy report on Wednesday, February 10th.
Open Text (OTC-T) shares’ rose by almost 10% to $65.51 after Canada’s largest software company reported better than expected 2nd-quarter financials.
The share price of SolarCity (SCTY-Q) plunged by over 29.5% to US$18.55 on word their growth of new solar installations was expected to slow in the year ahead.
Technical analysts David Tippin & Ron Meisels have been observing the recent market action and on Wednesday, February 10th commented – “The rally off the January 20th low and the subsequent February 8th sell-off is probably just part of a larger corrective process that needs more time to complete. As long as the S&P 500 hold the 1,800-1,850 zone, which is has done 5-times including the recent action has the characteristics of a bull market correction.”
Thursday, February 11th began with Alberta based Cenovus Energy (CVE-T) joining a growing long line of oil & gas companies to cut their dividend – in this case by some 69%.
Gold stocks rallied following gold bullion’s very bullish $49.50 daily advance.
Avon Products (AVP-N) shares’ plunged by over 19% to US$2.63 after the cosmetic giant’s 4th-quarter financials failed to meet the street’s expectations.
The shares’ of Cisco Systems (CSCO-Q) rose by almost 10% to US$24.72 on word the communication equipment maker reported better than expected 4th-quarter financials.
Friday, February 12th started with Baker Hughes reporting that the number of active U.S. oil & gas drilling rigs fell by another 30 in the past week to bring the number of active rigs down to just 541 rigs – well down from the 1,358 active drilling rigs at this time just one year ago.
The markets were generally positive going into the Canadian Family Day and American Presidents’ Day long weekend.
During the week – gold bullion rose to a new 1-year closing high of US$1,244-an-ounce while crude oil dropped to a new 13-year low of US$27.28-a-barrel.
Agnico Eagle Mines (AEM-T) at $49.47, Barrick Gold (ABX-T) at $17.69 and McEwen Mining (MUX-T) at $2.28 all set new TSX 52-week trading highs while Eagle Energy Trust (EGL-T) at $0.40, Intact Financial (IFC-T) at $77.49 and Magna International (MG-T) at $42.09 all fell to new 52-week trading lows.
For the Week – The Dow Industrials fell by 1.43% to 15,974, with the S&P 500 Index down by 0.80% to 1,865 and the NASDAQ Exchange off by 0.57% to 4,338. In the frozen north, the TSX composite Index Dropped by 3.0% to 12,381 while the TSX Venture Exchange gained 0.59% to 511.
With commodities – Gold bullion advanced by 6.99% to US$1,239, with copper down by 3.33% to US$2.03, while crude oil gained 1.39% to US$31.32 and natural gas lost 4.37% to US$1.97. Overall the CRB Spot Commodity Index improved by 0.26% to finish the week at 387.
The Canadian dollar rose by 0.46% against its American counterpart to end the week at US$0.7218.
And the closely watched CBOE Volatility Index or VIX rose by 1.92-points to finish the week at a more nervous level of 25.30.
And Finally – It seems that today’s advanced automotive technology may finally have overcome drivers common sense or logic as the National Highways Safety Administration is concerned about the growing number of crashes caused by drivers in very quiet, push button start and motionless gear shifts exiting their vehicles with…..now wait for it……the engine still running with the vehicle in gear.
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