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The Week of May 30th to June 5th, 2016 “A Brief Look Back Into Tomorrow”

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The Week of May 30th to June 5th, 2016 “A Brief Look Back Into Tomorrow”

 

 

 

 

 

The new North American trading week began quietly on Monday, May 30th with the Canadian markets having to go it alone as their American counterparts were closed for the Memorial Day holiday.

 

 

 

The relentless trend to wireless continued as industry reports showed that upwards of 540,000 Canadians gave up their land line phones last year and marking a record high of 25% of subscribers that only have wireless phone service.

 

 

 

With figure that makes the Canadian Government’s infrastructure spending proposals seem insignificant – the Oxford Institute for Energy Studies estimates that the Government of India is building 30-kilometers of new roads in that country…….a day.

 

 

 

The World Gold Council reported that 1st-quarter global gold demand rose by 21% over the same quarter a year ago to 1,290-tonnes – the second largest quarter on record.

 

The oil patch remained strained as the shares’ of Delphi Energy (DEE-T) fell by almost 18.5% to $0.93 on word the petroleum company’s credit lines had been reduced.

 

 

 

Tuesday, May 31st saw Statistics Canada report that, led by exports, the country’s economy grew in the 1st -quarter by an annualized 2.4%.

 

 

 

Cliffs Natural Resources (CLF-N) shares’ surged up by 39% to US$4.27 after the iron-ore miner announced a deal to sell giant steelmaker ArcelorMittal (MT-N) with a 10-year supply of iron-ore pellets.

 

 

 

Another pharma deal was announced as the price of Celator Pharmaceuticals (CPXX-Q) stock soared up by over 71.5% to US$30.06 on word the maker of rare blood cancer medicines had agreed to a US$1.5-billion purchase from Ireland’s Jazz Pharmaceuticals.

 

 

 

And SciQuest Inc. (SQI-N) shares’ rose up by over 31.5% to US$17.43 on word the cloud-based business communications company had agreed to a US$509-million takeover by private-equity group Accel-KKR.

 

 

 

Technical analysts David Tippin & Ron Meisels took a look at the market on Wednesday, June 1st and commented – “A small swoon in June should see the end of the corrective period. This should be followed by a push towards the highs made last year. Any further weakness is a buying opportunity.” (For a complete copy of this report please email ‘rod.blake@canaccord.com’).

 

 

 

The price of Rock Energy (RE-T) rose by almost 9% to $0.88 after the petroleum developer agreed to a $67-million all-stock takeover offer from Raging River Exploration (RRX-T).

 

 

 

Thursday June 2ndsaw the price of CST Brands (CST-N) shares rise by over 18% to US$44.95 on reports that Canada’s convenience store giant Alimentation Couch Tard (ATD.B-T) was looking to acquire its American based counterpart.

 

 

 

Uranium explorer NexGen Energy (NXE-V) announced it had received a $60-million strategic investment from CEF Holdings.

 

 

 

Conn’s Inc. (CONN-Q) shares’ plunged by over 26% to US$8.61 after the home furnishing retailer reported a significant drop in its consumer credit division.

 

 

 

And things could be looking up in the resource sector as the price of Joy Global (JOY-N) stock rose by over 22% to US$92.19 after the drilling equipment company reported better than expected quarterly financials.

 

 

 

Similarly, the shareholders’ of Demandware Inc. (DWRE-Q) were pleased t see their investment soar up by 56% to US$74.87 when the cloud-based software company agreed to a US#2.8-billion all-cash takeover from fellow cloud-based company Salesforce.com (CRM-N).

 

 

 

 

The markets were shocked on Friday, June 3rd to see the U.S. Labor Department report their country only created a 6-year low 38,000 new jobs in May, but that the unemployment level fell by another 0.3% to 4.7% as potential workers gave up and left the potential employment roles.

 

 

 

Trade figures also dominated the day with Statistics Canada reporting our trade deficit rose in April to a near-record $2.94-billion. Meanwhile, the U.S. Commerce Department reported their trade deficit rose by 5.3% in April to a much greater than expected US$37.4-billion.

 

 

 

Things could finally be looking up for the struggling petroleum industry as Baker Hughes reported that, after idling over 1,000 drilling rigs since 2015, American drillers started up nine new rigs last week to bring the total number of working drill rigs up to 325.

 

 

 

During the Week – The price of natural gas rose to a new 5-month closing high of US$2.40/mmbtus, while the TSX Composite Index reached a new 9-month closing high of 14,227 and the TSX Venture Exchange closed at a new 1-year high of 694.

 

 

 

Open Text (OTC-T) at $78.51, Royal Bank of Canada (RY-T) at $80.97 and ZCL Composites (ZCL-T) at $8.85 all established new TSX 52-week trading highs while Echelon Financial Holdings (EFH-T) at $11.44, Fortress Paper (FTP-T) at $2.84 and Silver Bullion Trust (SBT-T) at $9.80 all set new 52-week trading lows.

 

 

 

For the Week – The Dow Industrials fell by 0.37% to 17,807, with the S&P 500 flat on the week at 2,099 while the NASDAQ Exchange rose by 0.16% to 4,943. North of 49 – the TSX Composite Index gained 0.86% to 14,227 and the TSX Venture Exchange improved by 3.74% to 694.

 

 

 

With commoditiesgold bullion rose by 2.38% to US$1,246, with copper ahead by 0.47% to US$2.12 while crude oil dropped by 1.14% to US$48.77 but natural gas gained 10.60% to US$2.40. Overall, the CRB Spot Commodity Index rose by 0.73% to end the week at 414.

 

 

 

The Canadian dollar gained 0.64% against the American dollar to finish the week at US$0.7729.

 

 

 

And the closely watched CBOE Volatility Index or VIX rose by 0.28-point to end the week at a modestly more nervous level of 13.40.

 

 

 

And Finally – If you sense that the pricing in your weekly shopping flyers is getting more aggressive you may be right as according to the Retail Council of Canada36% of all grocery items are now sold on a discount price promotion, well up from the 27% sold at discount before the recession of 2008/09.

Posted June 7, 2016

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