The Prospector News

The Week of March 10th to March 16th, 2014 “A Brief Look Back Into Tomorrow”

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Industry Analysts






After only a couple of days to enjoy the previous week’s gains, investors began Monday, March 10th digesting a headline that China’s exports, instead of growing as expected, actually took major 18% drop in the month of February. Now investors had to decide if this was just a one off event or a change in what was a very long term trend of consistent growth.




Fission Uranium (FCU-V) started the week on a positive note as its share price rose by over 5% to $1.67 when the uranium explorer reported more “off the scale” drill hole readings from their ongoing Patterson Lake South project in northern Saskatchewan.




Chiquita Brands (CQB-N) shares’ improved by over 11% to US$12.05 when the well known banana producer acquired Irish competitor Fyffes in an US$526-million all-stock deal that creates the world’s largest banana supplier.




McDonald’s (MCD-N) customers don’t seem to be “lovin’ it” as much these days as the world’s largest restaurateur reported a 0.3% drop in February same-store sales.




Canadians must be very hearty homebuilders as in spite of one of the worst winters in memory, Statistics Canada reported that the country’s new home housing starts rose by 11,613 in February to a seasonally adjusted 192,094 new starts.




And under the heading of ‘Dooby Dooby Do’ – The Colorado Department of Revenue reported that the state’s retail marijuana outlets recorded a much better than expected US$14.02-million their first month of recreational marijuana sales and better still, the state collected a windfall US$2.01-million in taxes from those sales.




Ottawa is in the news on Tuesday, March 11th when Canadian Prime Minister Stephen Harper announced his government has completed a free trade agreement with South Korea.




Elsewhere, China’s sudden drop in economic activity hits the resource markets hard with the price of copper plunging by 1.99% to fall below US$3.00 and end the day at US$2.95-a-pound, while crude oil dropped by $1.77 to fall below US$100 and close at US$98.26-a-barrel. Conversely, gold bullion surged by $20.70 to end the day at a new 6-month high of US$1,367-an-ounce.




Burcon NutraScience (BU-T) shares’ surged up by over 22% to $5.36 on word that industry giant Archer Daniels Midland (ADM-N) intends to expand to full-commercial production of the company’s CLARISOY soy protein.




The share price of Fortress Paper (FTP-T) fall by almost another 13% to $2.74 when the specialty paper company failed to meet the streets expectations with its 4th quarter financials.




Under the heading of ‘Game Over’ – The shares’ of Freddie Mac (FMCC-Q) and Fannie Mae (FNMA-Q) drop by 26.8% and 30.8% respectively when the U.S. Senate Banking Committee reported it had decided to replace the long time mortgage guarantors with a new agency the Federal Mortgage Insurance Corporation.




And after a very volatile courtship, the Men’s Wearhouse (MW-N) finally agrees to take over competitor menswear retailer Joseph A. Bank (JOSB-Q) in an all-cash deal worth some US$1.8-billion.




Wednesday, March 12th marked the 25th anniversary of the start of the World Wide Web or ‘www’.




Express (EXPR-N) shares’ fell by 12% to US$16.05 when the specialty apparel retailer’s 4th quarter and full-year 2013 financials failed to meet analysts’ expectations.




Conversely, the shares’ of VeriFone Systems (PAY-N) rose by 11% when the company beat the street with its 1st quarter financials.




China’s economics weighed on the markets once again on Thursday, March 13th when the world’s second largest economy reported its industrial production grew year-over-year to February by a less than expected 8.6%, while its retail sales grew in February by a less than expected 11.8% from the same month one year ago.




In direct contrast, the U.S. Commerce Department reported that American retail sales grew in February by a better than expected 0.3%.




Cameco Corp. (CCO-T) shareholders’ gave a collective high-five on word that the their company had finally started to produce extremely high grade uranium ore from its very much delayed Cigar Lake uranium mine in northern Saskatchewan.




Transat A.T. (TRZ.B-T) shares’ fell by over 17% to $9.10 when the charter air carrier filed much poorer than expected financials from their busy 4th quarter travel season.




The markets were once again very cautious on Friday, March 14th as investors watched intently and waited for the economic and military repercussions as the Ukraine’s Crimea peninsula prepared to hold its legal or illegal referendum on its ceding from the Ukraine in order to join the Russian Federation.




Statistics Canada reported that improving real estate prices helped to raise the average Canadian’s net worth by 2.5% in the 4th quarter to a record $218,500.




Similarly, Spectrum Group reported that the number of U.S. households with a net worth of more than US$1-million rose by 600,000 last year to a record 9.63-million households.




Another source of Canadian wealth is of course the country’s crude oil production which the International Energy Agency (IEA) said reached a record 4.3-million barrels-a-day in February.




Quiznos, filed for Chapter 11 bankruptcy protection, but said that its franchised retail operations would continue to serve those toasted bun submarine sandwiches as usual.




Precious metal stocks rallied in tandem ahead of an uncertain weekend of the Ukrainian Crimea referendum.




Some new intermediate and long-term highs were established during the week with gold bullion rising to a new 6-month high of US$1,379-an-ounce, while The TSX Venture Exchange reached a new 11-month closing high of 1,045 and the TSX Composite Index rose to a new 3-year closing high of 14,327.




Individually, Ballard Power Systems (BLD-T) at $9.32, EnCana Corp. (ECA-T) at $22.79 and Onex Corp. (OCX-T) at $62.75 all established new TSX 52-week closing highs while DirectCash Payments (DCI-T) at $14.41, Fortress Paper (FTP-T) at $2.74 and Pacific & Western Bank of Canada (PWB-T) at $5.52 all fell to new 52-week trading lows.




For the Week – The Dow Industrials fell by 2.35% to 16,066, with the S&P 500 Index dropping by 1.97% to 1,841 and the NASDAQ Exchange falling by 2.10% to 4,245. On the Canadian side, the TSX Composite Index eased by 0.50% to 14,228 and the TSX Venture Exchange fell by 0.90% to 1,034.




Gold bullion gained 3.83% to US$1,383, while copper fell by another 4.55% to US$2.94. With petroleum products, crude oil lost 3.83% to US$98.56 and natural gas fell by another 3.72% to US$4.40. The CRB Commodities Index dropped by 4.31-points to 303.56.




The Canadian dollar eased by another 0.07% to end the week at US$0.9011.




And the closely watched CBOE Volatility Index or VIX rose on the week by 3.71-points to close at a much more nervous level of 17.82.




And FinallyBerkshire Hathaway (BRK.A-N) investment icons Warren Buffet and Charlie Munger have once again renewed their executive salaries for 2014 at just….now wait for it…..just US$100,000 apiece, just as they’ve continued to do for over 25-years now.


Posted March 17, 2014


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