The last trading week before the official start of summer begins on Monday, June 15th with investors acutely aware of the sideways congestion pattern that the major North American markets seemed to be on.
Technical analyst Dave Harder commented – “Increased uncertainty is a positive development! This has reduced optimism (bullishness) and increased pessimism (bearishness) to the point that there are now only 31% more bulls than bears compared to a high of 43.5% on April 28th. This decline to the lowest spread since October 22nd, 2014 is positive.”
For the first time ever, Saudi Arabia opens its US$585-billion Tadawul Saudi Stock Exchange up to direct foreign investment.
The famous Paris Air Show began with Bombardier Inc. announcing they had presold their desired allotment of 300 firm orders for C-Series jetliner that is due to fly in early 2016.
While staying with the eurozone, Hudson’s Bay (HBC-T) announced they had reached an agreement to acquire Germany’s top department store chain Kaufhof in an all-cash deal worth some $3.36-billion.
Gold mining giant Goldcorp Inc. (G-T) announced it would collect almost $1-billion by selling its 25.6% interest in silver miner Tahoe Resources (THO-T).
Tuesday, June 16th saw the share price of Coty Inc. (COTY-Q) surge up by almost 19.5% to US$31.11 on rumour that the personal grooming company was taking over three of Proctor & Gamble’s (PG-N) hair-care, fragrant and cosmetic businesses.
Colt Defence LLC, announced that a lack of retail sales and government orders helped the 179-year-old company that produced the gun that ‘Won the West’ to apply for Chapter 11 bankruptcy protection.
Statistics Canada reported that foreigners bought a record $12.94-billion of Canadian securities (bonds, money market paper & stocks) in the month of April.
The market was once again on ‘Fed watch’ on Wednesday, June 17th and once again it proved to be uneventful as the U.S. Federal Open Market Committee repeated its intention to keep its federal reserve funds rate between 0.00% & 0.25% while keeping the view that rates will go up as economic conditions permit.
Calfrac Well Services (CFW-T) succumbed to the realities of the current petroleum markets when the well service company cut its quarterly dividend in half to $0.0625-a-share.
Many investors who bought DavidsTEA Inc. (DTEA-Q) after its recent IPO were disappointed to watch their investment plunge by over 24% to US$21.95 when the tea retailer failed to meet the street’s expectations with its 1st-quarter financials.
The World Gold Council reported that while overall gold demand remained stable in the 1st-quarter at about 1,079 tonnes, net inflows into gold backed exchange traded funds (ETFs) turned positive for the first time since the 4th -quarter of 1012.
Meanwhile, the World Nuclear Association reported that China has 26-operating reactors, with another 24 under construction and that the Asian power plans to increase its nuclear capacity in the next 5-years by 41-giawatts to 58-gigawatts.
The American markets reacted positively on Thursday, April 18th to the Fed’s comments with the innovative oriented NASDAQ Exchange trading up to a new record closing high of 5,133.
Fitbit Inc. (FIT-N), a maker of personal fitness tracking devices, went public at US$20 and quickly rose by almost 49% to close its first day of trading at US$29.76.
Airboss of America (BOS-T) shares’ rose by 10% to $20.10 on word the company was purchasing Immediate Response Technologies, a supplier of personal protection and safety products in an all-cash deal of some US$37-million.
Friday, June 19th saw Statistics Canada report the country’s consumer prices rose by 0.9% in May over the same month one year earlier, while the core inflation rate eased by 0.1% to an annualized 2.2%.
Meanwhile, Statistics Canada also reported that the country’s retail sales for April dropped by an unexpected 0.1%.
Energy Fuels (EFR-T) shares’ rose by over 10% to $5.67 after the U.S. Nuclear Regulatory Commission (NRC) endorsed the uranium company’s takeover of Uranerz Energy (URZ-T).
Resource oriented markets suffered during the week with the TSX Composite
Index and TSX Venture Exchange dropping to new 3-month respective closing lows of 14,653 and 679.
Cott Corporation (BCB-T) at $13.00, Hardwoods Distribution (HWD-T) at $16.32 and Ten Peaks Coffee Co. (TPK-T) at $9.44 all established new TSX 52-week trading highs while Bonterra Energy (BNE-T) at $31.06, Great Panther Silver (GPR-T) at $0.52 and WesternOne Inc. (WEQ-T) at $0.77 all fell to new 52-week trading lows.
For the Week – the Dow Industrials rose by 0.64% to 18,014, with the S&P 500 Index up by 0.76% to 2,110 and the NASDAQ Exchange higher by 1.31% to 5,117. In Canada, the TSX Composite Index lost 0.6% to 14,653 while the TSX Venture Exchange rose by 0.29% to 684.
With commodities, gold bullion gained 1.87% to US$1,201 while copper dropped by 3.73% to US$2.58, with crude oil down by 0.63% to US$59.77 and natural gas higher by 2.15% to US$2.85. Overall, the CRB Spot Commodities Index lost 0.47% to end the week at 422.
The Canadian dollar improved by 0.44% against the American dollar to finish the week at US$0.8150.
And the closely watched CBOE Volatility Index or VIX eased by 0.10-point to end the week at a little calmer level of 13.68.
And Finally – With higher interest rates looming ever closer to the horizon, it is of interest to note that a recent Manulife Financial (MFC-T) survey revealed that one-third of homeowners would face financial hardship if their mortgage payments went up by only…….10%.
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