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The Week of May 6th to May 12th, 2019 “A Brief Look Back Into Tomorrow”

 

 

 

 

 

The new trading week began on Monday, May 6th with investors acutely aware that the dramatic climb of the major North American Indexes since the New Year seemed to be running out of gas. To which technical analyst Ron Meisels commented – “My technical signals suggest that the rise which brought the Toronto and New York Indices to recent highs will come to an end in mid-May.” (For a complete copy of this report please contact rblake@cgf.com.)

 

 

To add to investor jitteriness – the Bloomberg Nanos Canadian Confidence Index fell by    0.5-point in April to 54.9.

 

 

Hudson Bay Co. ‘HBC-T’ shares’ rose by almost 2.5% to $7.57after Canada’s oldest company announced it was investigating strategic alternatives for its U.S. based Lord & Taylor department stores.

 

 

And the price of Air Canada ‘AC-T’ stock took flight and rose by 5% to $35.38 after Canada’s flagship airline beat analysts’ expectations with its 1st-quarter financials.

 

 

Tuesday, May 7th saw the markets fall in unison on fears that the much-anticipated U.S./China trade deal may get delayed.

 

 

IAMGOLD Corp. ‘IMG-T’ shares’ sank by over 12.5% to $3.41 after the Toronto based gold miner reported weaker than expected 1st-quarter financials.

 

 

The price of WestJet Airlines ‘WJA-T’ rose by over 1% to $29.04 after Canada’s second airline also showed an improvement in its 1st-quarter financials.

 

 

Canadian Pacific Railway ‘CP-T’ shareholders were pleased when the iconic Canadian company announced it was increasing its quarterly dividend by 27.5% to $0.83-a-share.

 

 

Canadian housing starts rebounded in April as the Canada Mortgage and Housing Corporation reported on Wednesday, May 8th that new home starts rose by a much better than expected 23% in April to an annualized 235,460 units.

 

 

Barrick Gold ‘ABX-T’ shares’ rose by over 3% to $17.70 after the world’s second largest gold miner beat the streets’ estimates with its 1st-quarter financials.

 

 

And the price of Pengrowth Energy ‘PGF-T’ soared up by almost 27% to $0.71 after the Calgary based petroleum producer impressed with its 1st-quarter financials.

 

 

Ride hailing services may be good for consumers but perhaps not do much for investors as the price of Lyft Inc. ‘LYFT-Q’ stock fell by almost 11% to US$52.91 after the American ride hailing company reported a larger than expected 1st-quarter loss

 

 

Thursday, May 9th saw Statistics Canada report that the country’s merchandise trade deficit dropped by $0.2-billion in March to $3.2-billion.

 

 

Magna International ‘MG-T’ shares’ fell by almost 10% to $64.57 after the Ontario based auto parts manufacturer lowered its guidance for the rest of 2019.

 

 

Finning International ‘FTT-T’ announce it will restructure its Canadian and South American operations to keep the giant Caterpillar equipment distributor competitive in those markets.

 

 

Statistics Canada reported on Friday, May 10th that the economy created a record 106,500 new jobs in April – dropping the unemployment rate down by 0.1% to a 40-year low of 5.7%.

 

 

The U.S. Government followed through on its warning and raised the tariffs from 10% to 25% on US$200-billion of imported Chinese goods.

 

 

Petroleum industry consultant Baker Hughes ‘BHGE-N’ reported that the number of active American drilling rigs dropped by 2-rigs last week to 988 active drilling rigs. Across the line – the number of Canadian active drilling rigs rose by 2-rigs to 63 active drilling rigs.

 

 

Kinder Morgan Canada ‘KML-T’ shares’ plunged lower by 13.5% to $12.60 after the pipeline and commodity shipping company announced that rather than selling itself – it would remain a stans alone Canadian entity.

 

 

And the price of Westport Fuel Systems ‘WPRT-T’ stock surged up by almost 34% to $3.00 after the Vancouver based alternative fuel company showed a marked improvement with its 1st-quarter financials.

 

 

During the Week – the Volatility Index rose to a new 3½-month high of 19.40.

 

 

Corus Entertainment ‘CJR.B-T’ at $8.01, Descartes Systems Group   ‘DSG-T’ at $54.61 and Restaurant Brands International ‘QSR-T’ at $90.34 all rose to new TSX 52-week trading highs while Canfor Corporation ‘CFP-T’ at $11.63, Major Drilling Group International ‘MDI-T’ at $3.98 and Turquoise Hill Resources ‘TRQ-T’ at $1.84 all dropped to new 52-week trading lows.

 

 

For the Week – the Dow Industrials lost 2.12% to 25,942, with the S&P 500 off by 2.21% to 2,881 and the NASDAQ down by 3.03% to 7,917. Up north – the TSX Composite fell by 1.19% to 16,298 and the TSX Venture lost 1.16% to 599.

 

 

With Commoditiesgold bullion gained 0.47% to US$1,287 while copper fell by 1.77% to US$2.77 as crude oil dropped by 0.23% to US$61.89 while natural gas gained 3.50% to US$2.66. Overall – the CRB Spot Commodity Index lost 2.15% to finish the week at 410.

 

 

The Canadian dollar improved by 0.05% against its southern cousin to end the week at US$0.7455.

 

 

And the closely watched CBOE Spot Volatility Index rose by 3.17-points to finish the week at a more nervous level of 16.04.

 

 

And Finally – Data compiled by Bloomberg Intelligence finds that U.S. credit card bad debt write offs rose by a 7-year high 3.82% in the 1st-quarter.

Posted May 14, 2019

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