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The Week of January 26th to February 1st, 2015 “A Brief Look Back Into Tomorrow”

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The Week of January 26th to February 1st, 2015 “A Brief Look Back Into Tomorrow”

 

 

 

 

 

The last trading week of the month begins with a tentative start on Monday, January 26th with investors trying to weigh the ramifications of the just completed national Greek election that saw the left leaning Syriza party with its leader Alexis Tsipras forming a government and declaring that the Eurozone’s imposed austerity program against the Mediterranean country would come under an early review.

 

 

 

This was followed closely by a report that credit rating firm Standard and Poor’s had dropped Russia’s sovereign debt credit rating by one notch to the junk bond level of double-B-minus with a negative outlook.

 

 

 

DR Horton (DHI-N) supplied some early optimism to the market after the premier American homebuilder said its new home sales rose by 29% in the first quarter to 7,973-units.

 

 

 

American telecommunications giant AT&T (T-N) announced its intended entry into the Mexican phone market with US$1.87-billion all-cash purchase of Nextel Mexico Wireless.

 

 

 

Metro Inc. (MRU-T) caught investors attention on Tuesday, January 27th when the Quebec/Ontario based grocer reported better than expected 1st quarter financials, increased its dividend by 16.7% and announced a 3-for-1 stock split all in the same day.

 

 

 

Yahoo! Inc. (YHOO-Q) also pleased its shareholders when the search engine company announced it would spin out its US$40-billion holding of China’s giant like company Alibaba Group Holdings (BABA-N) as a tax free distribution to existing YAHOO! shareholders.

 

 

 

Caterpillar Inc. (CAT-N) reflected the state of the resource industry when the world’s largest heavy equipment manufacturer reduced its sales outlook for the rest of the year.

 

 

 

The markets gave a respective sigh of relief on Wednesday, January 28th when the U.S. Federal Open Market Committee (FOMC) reported that the American economy was expanding in an acceptable manor and that its long range target of 2% inflation along with a federal funds rate  of 0.00% – 0.25% remained intact.

 

 

 

Apple Inc. (AAPL-Q) confirmed its status as the market’s heavyweight champion as its stock price rose by over 6% to US$115.86 when the tech giant reported 4th quarter sales rose by an amazing $17-billion to US$74.6-billion.

 

 

 

If low oil prices weren’t already putting enough pressure on the Canadian dollar, Statistics Canada helped to drive the Loonie down below US$0.80 with a revised reportthat the economy actually created 64,400 fewer or just 121,300 new jobs in 2014.

 

 

 

Cut backs in the oil & gas industries kept coming on Thursday, January 29th as Bellatrix Exploration (BXE-T), Chevron Corp, (CVX-N) and Royal Dutch Shell (RDS.A-N) were just two more of domestic and international petroleum companies to curtail spending in the face of falling crude oil and natural gas prices.

 

 

 

DataWind Inc. (DW-T) shares’ surged up by almost 23% to $2.32 on word it had secured a national wireless agreement with India that enables the company to bundle internet services with all of the tablets it sells in that large country.

 

 

 

On its continued race to the bottom, Denmark’s central bank cut its key lending rate for the third time in 10-days, this time by another 0.15% to…..now wait for it…..-0.50%.

 

 

 

Hot on the heels of Wednesday’s disappointing revised employment figures, Statistics Canada continued to put more downward pressure on the dollar on Friday, January 30th by announceing that the Canadian economy shrunk in November by an unexpected 0.2%.

 

 

 

Meanwhile, to the south, the U.S. Commerce Department reported the American economy finished 2014 with a slightly less than expected gross domestic product or GDP growth of 2.6%.

 

 

 

The first effects of last weekend’s Greek election are felt at home when the shares’ of Eldorado Gold Corp. (ELD-T) plunge by almost 15% to $5.99 when the new Greek energy minister announced his government is opposed to Eldorado’s planned gold mine in that Mediterranean country.

 

 

 

Amazon.com Inc. (AMZN-Q) shares’ surged up by over 14% to US$356.28 when the online shopping giant finally reported a better than expected 4th quarter profit of US$214-million.

 

 

 

And with confirmation that a good burger is still king, the share price of Shake Shack    (SHAQ-Q) rocketed up by over 118% to US$45.90 on American restaurant chain’s opening day of trading.

 

 

 

Crude oil prices suddenly surged up by over $3 late in the trading day on word from industry analyst Baker Hughes that the number of active U.S. oil rigs fell by 7% during the week.

 

 

 

Significant long term trends were continued during the week with copper dropping to a new 5½year low of US$2.46-a-pound, while natural gas set a new 2½ -year low of US$2.68 /mmbtu, with crude oil falling to a new  6-year low of US$44.30-a-barrel, helping the CRB Spot Commodities Index to fall to a new 4½-year low of 422, and the Canadian petro dollar outdoing them all by falling to a new 6-year low of US$0.7875.

 

 

 

CAE Industries (CAE-T) at $16.08, Molson Coors Canada (TPX.B-T) at $97.75 and Stella-Jones Inc. (SJ-T) at $27.20 all established new TSX 52-week trading highs while Alamos Gold (AGI-T) at $6.45, Copper Mountain Mining (CUM-T) at $0.97 and Ivanhoe Mines (IVN-T) at $0.67 all set new 52-week trading lows.

 

 

 

For the Week – The Dow Industrials lost 2.87% to 17,165, with the S&P 500 Index off by 2.78% to 1,995 and the NASDAQ Exchange down by 2.59% to 4,635. On the Canadian side, the TSX Composite Index fell by 0.72% to 14,673 while the TSX Venture Exchange eased by 0.15% to 677.

 

 

 

Gold bullion lost 0.62% to US$1,285, with copper was unchanged at US$2.50, while crude oil advanced by 4.78% to US$47.77 and natural gas fell by 9.46% to US$2.68. Overall the CRB Spot Commodities Index dropped another 0.47% to 422.

The Canadian dollar lost another 2.19% against the American super dollar to finish the week at US$0.7875.

 

 

 

And the closely watched CBOE Volatility Index of VIX rose by 4.31-points to cross above the physiologically significant level of 20 and end the week at a much more nervous level of 20.97.

 

 

 

And Finally – The Canadian exchange traded fund or ETF industry is taking a page from the expansion mutual fund industry in the 1980s in that the more seems to be the merrier, as according to Advisor.cathe number of ETFs has grown by 260 in the past 5-years to today’s 360 ETFs.

Posted February 2, 2015

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