The new week began where the previous one left off, with nothing really changed as the U.S. debt clock continued its relentless march towards the October 17th deadline, and with the Canadian markets closed on Monday, October 14th for their Thanksgiving holiday, the Americans were forced to begin the trading week alone.
And of note south of the border was that Yale University’s Robert Shiller, whose indexes of U.S. housing markets have become the mainstay of the industry, was one of three winners of the 2013 Nobel Prize for economics.
Canadians come back to work on Tuesday, October 15th to witness the Government of Canada put a little shudder through the boardrooms of the country’s telecommunication companies on, when it announced it intended to allow consumers to decide which programs they wished to subscribe to as opposed to the program bundles that the industry now offers.
Molycorp Inc. (MCP-N) shares’ fell by 20% when the rare earths producer announce it will need to raise about $200-milion to help fund facilities it is developing.
And as expected, the Democrats and Republicans worked out a deal late Tuesday evening that would see the U.S. government debt ceiling pushed down the road by a few months, only to rear its ugly head again next February 7th.
The U.S. markets surged upwards at the open of trading on Wednesday, October 16th as investors went all in following the temporary resolution of the U.S. government’s debt crisis, and the resulting warm & fuzzy feeling of everybody suddenly doing well in the market allowed the closely watched CBOE Volatility Index (VIX) drop by 3.69-points to fall below 15 to a warm & fuzzy level of 14.97.
Under our continued heading of ‘We’re Number One’ – Figures from The Organization for Economic Cooperation and development (OECD) finds that Canada has repeated as the world’s most educated country, a position the nation first established in 2000, with over half of all adults having a post secondary education.
“If you build it – They will come.” Or so said Statistics Canada on Thursday, October 17th, when it reported that the number of foreign travelers coming into Canada rose by 1.1% in August to 2.1-million visitors.
But this same group of people helped to keep the Canadian stock markets underperforming their counterparts as Statistics Canada also reported that foreign investors sold $2.2-billion of Canadian equities in August after purchasing $8.2-billion over the previous over the late summer.
International Business Machines (IBM-N) shares’ fell by about 6.5% on Thursday, October 17th, when Big Blue’s 3rd quarter revenue stream once again failed to live up to the streets expectations, and continuing a consecutive stream of quarterly revenue shortfalls that started some six quarters previously.
The volatility of the pharmaceutical market never ceases to amaze, as was the case of Amarin Corp. (AMRN-Q), whose shares’ plunged by over 62% to just US$1.95 on word the FDA would not approve its cholesterol drug, Vascepa.
Canadian Prime Minister Stephen Harper announced the country’s largest trade deal since the North American Free Trade Agreement (NAFTA) of the 1980s when he and European Union Commission President José Manual Barroso signed the Canadian – European Union (EU) Free Trade Agreement that will give Canada’s goods and services better access to the EUs 500-million people.
Google Inc. (GOOG-Q) carried the market on its shoulders on Friday, October 18th, at the giant search engine and online advertising company’s shares skyrocketed up by $124.80 or 13.8% to rise above $1,000 to end the week at a record high of US$1011.41-a-share on quarterly revues that rose by some 36% from the same quarter a year earlier to just under US$12-billion.
The markets were also bolstered a report from China that their gross domestic product or GDP had increased in the 3rd quarter by a better than expected 7.8%.
Air Canada (AC.B-T) continued to be a high flyer last week as it established yet another new 52-week trading high of $5.17, along with consumer leader Dollarama Inc. (DOL-T) at $87.21, and bank stocks such as the Royal Bank of Canada (RY-T) with a new 52-week trading high of $69.84. On the other side of the ledger, gold stocks continued to lag with Agnico Eagle Mines (AEM-T) at $24.66 and Newmont Mining (NMC-T) at $26.42 each dropping to new 52-week trading lows.
The markets on both sides of the border seemed more at ease on Friday, October 18th, once the debt ceiling issue was resolved, as the TSX Composite Index finally rose above 13,000 to establish a new 2-year high of 13,136. On the American side, the NASDAQ market established a new 13-year high of 3,914 while the S&P 500 Index established a new record high close of 1,745.
Technical analysts Olaf Sztabe & Ron Meisels – “The TSX Composite Index had a major breakout. The decisive move above the 13,000 level is putting the index on the expected route toward 14,000 and higher.”
For the Week – The Dow Industrials gained 1.07% to 15,400 while the S&P 500 Index gained 2.43% to 1,745 and the NASDAQ Exchange rose by 3.22% to 3,914. On the Canadian side, the TSX Composite Index rose by 1.89% to 13,136 and the TSX Venture Exchange gained 2.34% to 951.
The Canadian dollar improved by 0.58% to end the week at US$0.9712, while crude oil lost 1.03% to US$100.82-a-barrel and gold bullion rose by 3.57% to US$1,324.50-an-ounce. The CRB Commodities Index improved by 0.50 to end the week at 286.92.
And Finally – Just how much should a good corporate Chief Executive Officer or CEO make? The New Yorker ran the numbers and in 1965 the average CEO of a large corporation was paid about 20-times more that of their average employee. Today, that pay scale has stretched up to about 270 times that of the average employee.
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