The new trading week began on Monday, October 13th with the Canadian markets closed for Thanksgiving while American investors were almost afraid to look to see if the previous week’s across the board sell-off of equities would continue or prove to be to climatic end of a most swift and painful correction to date.
Technical analysts David Tippin & Ron Meisels – “The healthy correction of the last few weeks has moved the markets into an oversold condition, although further downside or basing action is possible before this bull market finds a stable footing.” (To see the full report send a request to firstname.lastname@example.org.)
Chrysler came back to the Big Board for the first time since the Great Recession as Fiat Chrysler Automotive N.V. (FCAU-N) lists on the New York Stock Exchange with an opening trade of US$9.00-a-share.
The Canadian markets followed their American counterparts lower when they returned to trade on Tuesday, October 14th as the TSX fell by over 190-points to 14,037 and the TSX Venture Exchange plunged by another 24-points to 803 as crude oil plunged by another $4 to just US$81.84 per barrel.
Canadian Pacific (CP-T) try to turn its attention southward as Canada’s second largest railway makes an unsolicited takeover bid for Florida based CSX Corp. (CSX-N).
Facebook’s (FB-Q) Mark Zuckerberg and his wife, Pricilla Chan announced they would donate US$25-million to the CDC Foundation to help fight the deadly Ebola epidemic that is now threatening American homeland.
The equity markets that were already in a serious correction mode found another reason to move lower on Wednesday, October 15 when Germany, the powerhouse European economy, lowered its growth estimate for this year by 0.6% to just 1.2%.
According to the World Gold Council, gold backed exchange traded funds (ETFs) now hold some 1,700-tonnes or US$71-billion of gold bullion, that collectively is the value of the top 10% of worldwide corporate capitalizations.
Netflix Inc. (NFLX-Q) was the centre of the market’s attention on Thursday, October 16th, as the video steaming company’s stock price plunged by almost 20% to US$359.88 on word they were expected weaker than first expected subscriber growth for the rest of the year.
Statistics Canada reported that the country’s factory orders, led by a larger than expected drop in automobile shipments, fell in September by a 5-year high of 3.3% to $52.1-billion.
The markets stabilized late in the trading day when St. Louis Fed President James Bullard suggested the Fed should consider delaying the end of the quantitative easing due to sinking inflation expectations.
And then the markets rallied on Friday, October 17th when the U.S. Commerce Department reported that their new housing starts rose by 6.3% in September to 1.017-million units.
Adding to the optimism was a University of Michigan report that American consumer confidence rose by a better than expected 1.8-points in October to a 7-year high of 86.4.
New intermediate and long-term closing lows were established during the week with the S&P 500 Index setting a new 6-month closing low of 1,862, the NASDAQ closing at a new 5-month low of 4,214 and the DJIA hitting a new 6-month closing low of 16,117. In Canada, the TSX Composite Index dropped to a new 9-month low of 13,870 and the TSX Venture plunged to a new 5-year 10-month low of 778. Meanwhile the VIX shot up to a new 2-year 4-month high of 26.25. Crude oil closed at a new 2-year low of US$81.84, the CRB Spot Commodity Index fell to a new 8-month low of 462 and the Canadian dollar dropped to a new 5-year closing low of US$0.8849.
Canlan Ice Sports (ICE-T), Dollarama Inc. (DOL-T) at $98.40 and Horizons U.S. Dollar Currency ETF (DLR-T) at 11.30 all set new TSX 52-week closing high of $3,10, while Cameco Corp. (CCO-T) at $17.60, Cenovus Energy (CVE-T) at $25.79 and Sherritt International (S-T) at $2.65 all hit new 52-week closing lows.
For the Week – The Dow Industrials were off by 0.99% to 16,380, with the S&P 500 Index down by 1.00% to 1,887 and the NASDAQ Exchange lower by 0.42% to 4,258. On the Canadian side, the TSX Composite Index ended the week unchanged at 14,227 while the TSX Venture Exchange fell by another 2.06% to 810.
Gold bullion gained 1.31% to US$1,238, with copper down by 1.32% to US$3.00, while crude oil dropped by 3.23% to US$83.05 and natural gas gained 2.33% to US$3.95. Overall, the CRB Spot Commodity Index was lower by 2.12% to end the week at 462.
The Canadian dollar lost another 0.67% to its American counterpart to finish the week at US$0.8868.
And the closely watched CBOE Volatility Index or VIX rose by another 0.75-point to end the week at a very nervous level of 21.99.
And Finally – While the Canadian mint phased out the penny a few years ago, the U.S. Mint continues to press out their country’s smallest denomination of currency. The problem with this according to the Wall Street Journal is that it cost the mint $1.83-cents to produce each penny for a total 2013 loss of US$55-million.
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