The first full trading week of July follows a positive first holiday shortened week that left most investors encouraged that the recent market correction was over and the gold bugs praying that their yellow metal had successfully tested a multi-month bottom.
Technical analysts David Tippin & Ron Meisels – “The recent lows provided a buying opportunity, especially in technically strong stocks that have been subjected to profit taking. But the markets are unlikely to rally to new bull market highs over the summer… The 2009-13bull market is still alive and technically well, and should track haltingly higher for most of the summer.”
The week also began with major protests in the streets of Cairo, Egypt and the future direction of government for that strategically placed country remained firmly in doubt. This in turn helps to push the price of West Texas crude oil well above the red flag price of US$100-a-barrel.
The transportation of crude oil and other dangerous goods also comes under greater scrutiny following the release of images of that horrific train wreck and massive explosion of oil cars in Lac-Megantic, Quebec.
Turquoise Hills Resources (TRQ-T) finally announces that its huge and controversial Oyu Tolgoi copper mine in Mongolia is finally shipping concentrates to China’s smelters.
The NASDAQ Exchange announces that electric car company Tesla Motors (TSLA-Q) will replace Oracle (ORCL-Q) on its NASDAQ 100 Index when the tech company moves over to the NYSE in the largest-ever U.S. market transfer on July 15th.
The Canada Mortgage and Housing Corp. reported that the country’s housing starts dipped slightly in June with 18,215 actual starts.
Meanwhile, work by market strategists Sanford C. Bernstein and Co. finds that more and more Canadians are highly indebted to their homes in that a record 13.5% of households had home debts of greater or equal to 250% of their gross income last year.
More uncertain economic news came out of China with the world’s second largest economy reporting that their export growth fell by another 0.7% in June, and bringing the country’s export growth down by 3.3% for the first half of 2013.
Emerging gold miner Alamos Gold (AGI-T) takes advantage of the down precious metals market by agreeing to take over Esperanza Resources Corp. (EPZ-V) in a $69.4-million cash& warrant deal that valued the share price of Esperanza at $0.85-a-share, a far cry from the $2.50 that Esperanza stock hit in 2010.
The equity markets that were generally negative suddenly turned positive last Wednesday, July 10th after U.S. Fed chairman Ben Bernanke stated that the Federal Reserve’s dual program of economic stimulus and low interest rates will probably not end next year as previously stated.
Also helping the markets was a report by the U.S. Treasury that the U.S. government had posted a very rare US$117-billion budget surplus in June.
Sirius XM Canada Radio Holdings (XSR-T) shares’ gained $0.25 to $7.95 last Thursday, July 11th when the Satellite radio provider raised its annual dividend by 27.3% to $0.42-a-share on a subscriber base that gained 10.4%in the past year to 1.664-milion subscribers.
Boeing (BA-N) shares’ were a drag on the Dow late Friday, July 12th when another fire on board one of their new 787 Dreamliner aircraft caused investors to dump their holdings in the world’s largest aircraft manufacturer and driving the stock down by 4.7% to US$101.87.
The insurers continued to be the market favourites on the TSX last week with Great- West Lifeco. (GWO-T) at $30.90, Manulife Financial (MFC-T) at $18.33 and Sun life Financial Inc. (SLF-T) at $33.48 touching new 52-week trading highs, while the golds were still out of favour for most of the week with Allied Nevada Gold (ANV-T) at $5.62, Claude Resources (CRJ-T) at $0.16, Coeur Mining Inc. (CDM-T) at $11.92 and Newmont Mining (NMC-T) at $28.12 all hitting new 52-week trading lows.
The U.S. markets definitely showed that they thought their correction was over as the Dow Jones Industrial Average rallied by 328-points to a new record high of 15,464, while the S&P 500 Index rose by 48-points to a new all-time high of 1,680 and the NASDAQ Exchange rallied by 121-points to a new13-year high of 3,600.
For the Week –
Despite the 30-point drag that Boeing placed on the Dow, the DJIA gained 2.16% on the week to 15,464, with the S&P 500 Index advancing by 2.95% to 1,680 and the NASDAQ Exchange up on the week by an impressive 3.48%. On the Canadian side, the TSX Composite Index was up on the week by 2.90% while the TSX Venture Exchange had a weekly gain of 1.60%.
Canaccord’s Debbie Lewis – “I’m right 98% of the time. The other 3% is when I have to solve math problems.”
And Finally – Hostess Brands LLC is bringing back Twinkies, the iconic food snack it acquired earlier this year out of bankruptcy, but this time they will be even better in that the yellow cake and whip cream filled item now has had its shelf life extended by nearly 3-weeks to….now wait for it….45-days.
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