The first full trading week of the New Year began with the American major markets coming off of a tremendous 2013 and trading near multi-year or record levels as they left the Toronto Stock Exchange well behind and feeling like an unnoticed wallflower, while the TSX Venture Exchange was still wondering what was the plate number of the bus that had just rolled over it.
In case you missed you missed the yearend totals, the Dow Jones Industrial Average (DJIA) finished 2013 with an exceptionable gain of 26.50%, only to be outdone by the S&P 500 Index with a yearly gain of 29.60% and the NASDAQ Exchange with a 2013 gain of 38.32%, and collectively giving the American major markets their best year since 1997.On the north side of the border, the resource rich TSX Composite Index (TSX) managed to end 2013 with a gain of 9.55% while the junior weighted TSX Venture Exchange (JVX) lost a very disappointing 23.67% on the year.
With commodities, gold bullion plunged by a 32-year record of 28.09% in 2013 and copper lost 6.85%. Petroleum products fared better as crude oil gained 7.46% and natural gas bested them all with a surprising yearly gain of 25.11%.
In currencies, the Canadian dollar or loonie lost 6.60% against its U.S. counterpart in 1023.
Some of the notable TSX winners and losers of 2013 were Bellatrix Exploration Ltd. (BXE-T) up 82.9%, Canadian Pacific Railway (CP-T) up 59.2%, Canfor Corp. (CFP-T) up 60.8%, Eldorado Gold Corp. (ELD-T) down 52.9%, Manulife Financial Corp. (MFC-T) up 55.1%, Sherritt International Corp. (S-T) down 35.7%, and Silver Wheaton Corp. (SLW-T) down 40.2%.
Auto sales were good in 2013, with DesRosiers Automotive Consultants reporting that Canadians shrugged off their record debt loads and took advantage of low interest rates to purchase a record 1.743-million vehicles last year, up some 4% over the total in 2012, while Americans bought a 6-year high 15.6-million vehicles during the year.
And with an interesting side note, The University of Michigan finds that the percentage of young Americans holding valid driver’s licences has dropped from over 87% in 1983 to under 70% today.
And not surprisingly, a yearend Harris/Decima poll found that once again, paying down debt was the average Canadian’s top priority going into 2014.
Kirkland Lake Gold (KGI-T) set the tone for the resource sector on Monday, January 6th, when the junior miner’s stock price dropped by some 13.67% to $0.41 on word the company was reviewing strategic alternatives (read sale of its assets) in order to enhance shareholder value.
Meanwhile, the ongoing Men’s Warehouse (MW-N) Jos. A, Bank (JOSB-Q) who’s taking over who’s haberdashery saga continued with Men’s taking the latest salvo by announcing a US$1.61-billion hostile takeover bid for its prime competitor.
As expected, the U.S. Senate confirmed Janet Yellan to replace retiring Ben Bernanke as the new head of the U.S. Federal Reserve (Fed).
Statistics Canada reported on Tuesday, January 8th that less than robust retail consumer spending helped the country’s trade deficit to rise to $940-million in November, the 23rd consecutive monthly trade deficit.
With Canadian security investors wondering how to position themselves for the year ahead, technical analysts David Tippin & Ron Meisels commented that – “Toronto is overbought, the financial stocks that led the breakout are looking tired, and a negative divergence in internal momentum has appeared with the Santa Clause rally……… The Bank and Energy stocks may wake up in April to make Toronto a late bull market leader.” (To see the full report send a request to ‘email@example.com’).
Goldcorp (G-T) finally gave the precious metals sector something to build upon late in the week when the giant gold producer reported better than expected third quarter production and expense figures and better still, announced a rising 2014 production guidance of some 3.0 – 3.15-million ounces of gold.
Activist investor George Armoyan shakes things up at Sherritt International (S-T) on Thursday, January 9th, when the holder of 5% of the nickel miner’s stock called for revamping of its board of directors.
The American and Canadian employment markets got a sudden taste of reality on Friday, January 10th when the U.S. Department of Labor reported that their economy only created a much less than expected 74,000 jobs in December, while Statistics Canada reported that our economy ended 2013 with an unexpected loss of 45,900 jobs. Somewhat surprisingly, unemployment in the U.S. dropped by 0.3% to 6.7% while the UI rate in Canada increased by 0.3% to 7.2%.
And U.S. President Barack Obama kicked any decision he might make on the controversial Keystone Pipeline down the road about as far as he could when he called for an all encompassing review and report on America’s energy needs that will not be due until…now wait for it….January, 2015.
Alliance Grain Traders (AGT-T) at 17.51, Manulife Financial (MFC-T) at $22.12 and Virginia Mines (VGO-T) at $12.49 all established new TSX 52-week trading highs during the week while Concordia Healthcare (CXR-T), Paramount Gold & Silver (PZG-T) at $0.87 and Veresen Inc. (VSN-T) at $14.61 all touching new 52-week trading lows.
For the Week – The TSX Composite Index gained 1.47% to a new 21/2-year high of 13,748, while the TSX Venture Exchange rose by 2,31% to 967. South of the border, the Dow Jones Industrials eased by 0.20% to 16,437, while the S&P 500 Index rose by 0.60% to 1,842 and the NASDAQ Exchange improved by 1.04% to 4,175.
Gold bullion gained 0.65% to US$1,246.80, while copper gained 1.52% to US$3.35. Crude oil lost 1.11% to US$92.92 while the record cold in the east helped natural gas to rise by 1.76% to US$4.05. Overall, the CRB Commodities Index eased by 0.56-points to end the week at 276.01.
The Canadian dollar continued to weaken against its American counterpart to lose another 2.47% and end the week at US$0.9171.
And Finally – As we leave 2013 behind, CNBC reported that the average American household exited the year with some US$300 in unused gift card balances and that the nation collectively has over US$41-billion of unused gift card credits going back to 2005.
(Now you can see why retailers love those gift cards. At worst they break even, and at best – 100% goes right to their bottom line.).
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