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The Week of May 26th to June 1st, 2014 “A Brief Look Back Into Tomorrow”

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The Week of May 26th to June 1st, 2014 “A Brief Look Back Into Tomorrow”

 

 

 

 

 

The last trading week of the month begins with our American neighbours enjoying their Memorial Day long weekend after watching the S&P 500 Index reach a new all-time high, while to the north, the Canadian markets go it alone on Monday, May 26th.

 

 

 

Early reports out of the Ukraine had candy mogul Petro Poroshenko being declared their new President by capturing over half of the counted votes and winning their all important federal election.

 

 

 

The scale of some of the world’s resource plays came into focus when Black Diamond Group (BDI-T) announced they had secured a 3-year, $34-million contract to supply and maintain a 1,244 person camp in the prolific Montney Shale region of northeastern British Columbia.

 

 

 

While on a similar note, the Canadian Energy Board reported that Canadian crude oil exports by rail increased by 55,000 barrels per day in the first quarter of this year over last to a record 160,000 barrels of oil per day.

 

 

 

The gold bugs once again did their best Chicken Little impressions on Tuesday, May 27th as the price of the yellow metal fell by an unexpected $25 to a four-month low of         US$1,266-an-ounce.

 

 

 

And on a related note, Barrick Gold (ABX-T) reported they were going to pull in their worldwide endeavours and do most of their expansion going forward in their home state of Nevada.

 

 

 

As British Columbian Premier Christy Clark continues to reassure the planet that this province will someday be a major exporter of liquid natural gas or LNG, some companies like ExxonMobil (XOM-N) quietly just go out and get the job done, as the world’s largest petroleum company announced it had made its first LNG shipment from Papua New Guinea, a country that on the maps we see, is far closer to the large markets of East Asia than we are here in B.C.

 

 

 

The continued resurgence of the U.S. housing market was reflected by Toll Brothers (TOL-N) on Wednesday, May 28th when the American homebuilder reported its second quarter profit more than doubled from the same quarter just one year ago.

 

 

 

Canadian National Railway (CNR-T) hit the biscuit back towards the Federal Government when the country’s largest railway said that it had shipped a record amount of grain in the month of May, and had in fact beaten its previous monthly record by some 38%.

 

 

 

PrairieSky Royalty (PSK-T) was the talk of the oil & gas market on Thursday, May 29th as EnCana Corp. (ECA-T) spun out the royalty ground it had held from the days of the Canadian Pacific Railway crossing the country in the 1860s, in an $1.67-bllion initial public offering (IPO) that was the largest offering the TSX had seen in the last 10-years. PrairieSky gained over 32% above the $28.00 IPO price to end the day at $37.00-a-share.

 

 

 

Canada reported that an increase in energy exports helped to reduce the country’s current account deficit by $3.3-billion in the first quarter to $12.4-billion.

 

 

 

Government information was also the focus on Friday, May 30th when Statistics Canada also reported that the extreme effects of the past winter were instrumental in reducing the growth of the country’s gross domestic production or GDP in the first quarter to a less than expected annualized 1.2%.

 

 

 

While to the south, the U.S. Commerce Department also reported that the harsh winter was mainly to blame for their gross domestic product (GDP) to only increase in the first quarter by a much less than expected annualized rate of 1%.

 

 

 

Under our continuing heading of ‘Bad News – Good News’ – The bad news from transportation giant Bombardier Inc. (BBD.B-T) was that one of their Pratt & Whitney jet engines failed during a test on their new C-Series mid-sized jets. The good news was that the jet was on the ground during the test.

 

 

 

With yet another example of how innovation leads to employment, electric car company Tesla Motors (TSLA-Q), now with 6,000 employees, has in a few short years overtaken Toyota Motor Corp. (TM -N) as California’s largest automotive employer.

 

 

 

Canadian bank stocks were front and centre after reporting better than expected first quarter financials with the Bank of Nova Scotia (BNS-T) at $69.17, CIBC (CM-T) at $99.72 and TD Bank (TD-T) at $54.07 all establishing new TSX 52-week trading highs, while the precious metal sector was once again a drag with IAMGOLD Inc. at $3.25, Kinross Gold (K-T) at $3.97, and Yamana Gold (YRI-T) at $7.62 all sinking to new 52-week trading lows.

 

 

 

Sell in May and go away? Well not too likely as two new long-term Index highs were established during the week when the S&P 500 Index advanced to a new record closing high of 1,924 and the DJIA rose to a new all-time closing high of 16,717.

 

 

 

 

For the Week – The Dow Industrials gained 0.67% to 16,717, while the S&P 500 Index rose by 1.21% to 1,924 and the NASDAQ Exchange improved by 1.10% to 4,243. To the Habs are out north, the TSX Composite Index lost 0.71% to 14,604 and the TSX Venture Exchange gave up 0.39% to 984.

 

 

 

Gold bullion lost 3.21% to US$1,251, while crude oil dropped by 1.42% to US$102.84, natural gas gained 3.17% to US$4.55 and copper fell by 1.26% to US$3.13. Overall, the CRB Spot Commodities Index rose by 0.40% to finish the week at an even 500.

 

 

 

The Canadian dollar improved by 0.27% against its southern counterpart during  the week to close at US$0.9223.

 

 

 

The closely watched CBOE Volatility Index or VIX rose marginally by 0.07-point to end the week at a slightly more nervous level of 11.43.

 

 

 

And Finally – A wind of change seems to be blowing across the golfing world as the National Golf Foundation reported that while 260,000 women took up the game last year, 650,000 men left for a net loss of almost 400,000 golfers in 2013.

 

 

 

And Finally, Finally – Summer is upon us and we are taking the next two weeks off to travel to Saskatchewan to visit family and to be introduced to a new granddaughter ‘Billie’. If all goes well you should be receiving the next edition of The Week in your inbox sometime around Monday, June 23rd.

Posted June 2, 2014

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