We approach the mid-month of January with the major North American markets looking somewhat choppy and failing so far to make a decisive move to the upside, thus leaving investors to nervously wonder how the January Effect will weigh on this year’s trading. To refresh, the January Effect states that 80% of the time, the overall market will follow January’s direction for the rest of the year.
Technical analysts Dave Harder & Ron Meisels – “Since 1980, years ending in four have been the transition years where emergency stimulation for the economy was reduced or withdrawn after a crisis situation”. Editor’s Note: Years ending in five have the best track record. (To see the full report send a request to ‘firstname.lastname@example.org’).
Ford Motor Co. (F-N) put the automotive world on notice Monday, January 13th, when the company announced they will soon be building the body of North America’s number one selling F150 pick-up truck out of alloyed aluminum, which will boost fuel millage by taking 318-kilograms or 700-pounds of weight off each unit, thereby allowing for a smaller 2.7-litre engine to get the job done.
Goldcorp Inc. (G-T), perhaps sensing that the bottom of the gold market has been seen, makes an unsolicited $2.6-billion cash & share takeover bid for start-up gold producer Osisko Mining (OSK-T) and its flagship Malartic gold mine in Quebec.
Meanwhile, lululemon athletica (LULU-Q) share’s fell by almost 17% to US$49.63 when the world’s leader yoga-wear company warned that it will soon post its first year-over-year sales drop since 2009.
The Government of Indonesia announced on Tuesday, January 14th that it was curtailing any exports of unrefined nickel in an effort to encourage secondary refining of that all important stainless steel metal in that country. (And how will this affect the price of nickel?)
Pinecrest Energy (PRY-T) shares’ plunged by nearly 40% to $0.22 when the company’s 2013 petroleum production figures fell well short of the street’s expectations.
The share price of Tesla Motors (TSLA-Q) improved by some 15% when the fully electric car company reported that it beat its 4th quarter sales forecast by 20% and delivered 6,900 of its Model S electric sedans.
And while still with autos, General Motors Co. (GM-N) announced a $0.30 quarterly shareholder dividend as it reinstated its dividend policy for the first time since the U.S. economic collapse almost destroyed the company in May, 2008, almost 5-years ago.
Meanwhile, TELUS (T-T) CEO Darren Entwistle confirmed that he was one with his shareholders as he announced that he would take his 2014 salary in TELUS shares for a fifth consecutive year.
Alamos Gold (AGI-T) shares’ fell by almost 18% on Thursday, January 16th when the mid-tier Mexican gold miner reported substantially lower 3rd quarter mine production.
Similarly, the price of Bombardier Inc. (BBD.B-T) stock came under pressure when the world’s third largest commercial aircraft manufacturer announce further in-service delays of up to 18-months for its much anticipated 100-plus seat C-series passenger jetliner.
And not to be outdone, the strength of the past Christmas shopping season was reflected in the price of Best Buy (BBY-N) shares’ that plunged by over 28% to US$26.77 when the giant American retailer reported a 0.9% drop in holiday sales.
Alliance Grain Traders (AGT-T) at $18.17 and Manulife Financial (MFC-T) at $22.13 and Westshore Terminals Investment (WTE-T) at $36.48 all established new TSX 52-week trading highs, while new 52-week trading lows were set by Bengal Energy (BNG-T) at $0.45, Meadow Bay Gold (MAY-T) at $0.13 and Nevada Copper (NCU-T) at $1.23.
The markets were relatively quiet on Friday, January 17th as readers flattened positions going into the U.S. Dr. Martin Luther King long weekend, although resource issues, led by a firming gold bullion, traded higher on the Canadian exchanges
There were new index closing highs established during the week with the TSX Composite Index touching a new 2½-year trading high of 13,888, while the NASDAQ Exchange reached a new 14-year high of 4,219 and the S%P 500 Index duplicated its all-time high of 1,848 .
For the Week – The Dow Industrials gained 0.11% to 16,459, with the S&P 500 Index up by 0.20% to 1,839 and the NASDAQ Exchange ahead on the week by 0.55% to 4,198. On the frozen pond side of the border, the TSX Composite Index improved by 1.02% to 13,888 and the TSX Venture Exchange rose by 1.01% to 976.
Gold bullion gained 0.42% to US$1,252, while copper added 0.61% to US$3.31. Crude oil improved by 1.57% to US$94.38 and natural gas increased by 5.22% to US$4.23. Overall, the CRB Commodities Index gained 1.09% to end the week at 279.01.
The Canadian dollar continued its slide against its American counterpart to lose another 0.64% on the week to close out the week at a 4-year low of US$0.9112.
And Finally – As we approach the Canadian Registered Retirement Savings Plan (RRSP) season, it is of interest to note that according to Advisor.ca, the percentage of Canadians intending to contribute to their plans has fallen by 8% in the past 3-years to just 31%, as 74% of workers say they just can’t afford to contribute any funds to their RRSP accounts. (Part of this reasoning may also be that Canadians are finding that the newer Tax Free Savings Accounts or TFSAs are more flexible and suited to their modern lifestyles.)
And Finally, Finally – The Week is taking a week off as we are taking in the annual Cambridge House Resource Investment Conference here in Vancouver and then travelling to Las Vegas to take in…now wait for it….a legal marijuana conference. The Resource Conference is the largest of its kind other than the giant PDAC in Toronto and is well worth attending. And we know this may sound bizarre, but as reported by mainstream media, the world of legalized medical and commercial marijuana is changing very quickly in both Canada and the United States. We hope conferences like this will give us some much needed insight into this emerging and exciting industry. If all goes well The Week will once again come to your inbox on Monday, March 3rd.
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