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The Week of October 1st to October 7th, 2018 “A Brief Look Back Into Tomorrow”

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The Week of October 1st to October 7th, 2018 “A Brief Look Back Into Tomorrow”






The first trading week of the last quarter of 2018 began on Monday, October 1st with word that Canada and the United States had finally agreed on a new trade agreement that included Mexico – to be known as the United States-Mexico-Canada Agreement or USMCA.




Meg Energy ‘MEG-T’ shares’ soared up by 38% to $11.07 on word that giant integrated petroleum company Husky Energy ‘HSE-T’ was making an $6.4-billion cash & debt unsolicited takeover bid for the Alberta based crude oil producer.




The price of General Electric ‘GE-N’ stock rose by 7% to US$12.09 after the giant conglomerate replaced current CEO John Flannery with outsider Larry Culp.




And the price of Tesla Inc. ‘TSLA-Q’ shares’ rebounded back up by some 17% to US$310.70 on word that company founder and visionary Elon Musk – while being forced out as chairman – be staying on as CEO of the world’s premier eclectic auto company.




Tuesday, October 2nd – saw Royal Dutch Shell ‘RDSA-N’ with 40%, Malaysia’s Petronas with 25%, PetroChina Co. at 15%, Mitsubishi Corp. at 5%, and Korea Gas Corp. with 5% announced the official start of the long awaited $40-billion liquified natural gas (LNG) export plant in Kitimat, British Columbia. This is the largest infrastructure project in Canadian history,
 Inc. ‘AMZN-Q’ announced it will give all of its 350,000 American employees a minimum wage of US$15-an-hour – well above the federally regulated minimum wage of US$7.25-an-hour.




The price of Davidstea Inc. ‘DTEA-Q’ stock soared up by 63% to US$4.16 on media reports that the retailer of tea company was investigating an entrance into the cannabis space.




Maple Leaf Foods ‘MFI-T’ shares’ gained 6% to $32.51 after the domestic food processer announced it had purchased VIAU Foods – a Quebec based marketer of premium Italian cooked meats – in a cash & share deal of some $215-million.




An RBC Economic Research Report released on Wednesday, October 3rd found that the ownership costs of a Canadian home bought in the 2nd-quarter of 2018 now consumes a record 53.9% of an average household’s income.




The price of Torex Gold ‘TXG-T’ stock rise by 2.5% to $11.35 after the Mexican based miner reported producing a record 101,400-oz.-of-gold in the 3rd-quarter.




While most of the media attention has been focused on Tesla Inc. ‘TSLA-Q’ founder Elon Musk – the premier electric auto company announced its car production rose by 50% in the 3rd-quarter to over 80,000 units.




Thursday, October 4thTechnical analysts David Tippin & Ron Meisels commentedon the heightened state of the markets – “Investors should begin to think about protecting recent gains and be increasingly selective in entering new positions.”




Canadian Pacific Railway ‘CP-T’ shares’ advanced by 3% to $280.08 after the giant railroader forecast improved corporate economics for the year ahead.




Conversely, the price of Manulife Financial ‘MFC-T’ dropped by 3% to $22.54 after short selling hedge fund Muddy Waters published a negative report on the insurance company.




The markets fell in late day trading after the American 10-year treasury bond rose above the critical 3% level to 3.2% and putting it on par with many riskier dividend paying equities.




Friday, October 5thhad Statistic Canada report the economy created a much better than expected 63,300 new jobs in September and that the countries unemployment rate fell by 0.1% to 5.9%. Down south – the U.S Labor Department reported their economy created a less than expected 134,000 new jobs in September, but their unemployment rate fell by 0.1% to a 47-year low of 3.7%.




Stats. Canada also reported that due to an unexpected drop in imports – the country posted a $526-million trade surplus in August.




Petroleum industry consultant Baker Hughes ‘BHGE-N’ reported that the number of American active drilling rigs fell by 2-rigs last week to 1,052 active drilling rigs. The number of active Canadian drilling rigs rose by 4-rigs to 182 active drilling rigs.




While on a related note – Precision Drilling ‘PD-T’ reported it was taking over fellow Canadian driller Trinidad Drilling ‘TDG-T’ in an all-stock deal of some $1-billion.




Costco Wholesale ‘COST-N’ shares’ fell by % to US$ after the giant retail/wholesaler warned that rising costs and compressed sales margins may affect future earnings.




And the price of Tesla Inc. ‘TSLA-N’ stock dropped by % to US$ after company founder Elon Musk mocked the SEC in a tweet.




Aritzia Inc. ‘ATZ-T’ shares’ surged up by almost 14% to $18.39 after the Canadian ladies’ clothier reported a much better than expected 2nd-quarter report.




During the Week – the price of natural gas rose to a 1-year closing high of US$3.23/mmcf as crude oil reached a 4-year closing high of US$76.41/bbl and the Dow Industrials climbed to a new record high of 26,828.




Canadian Pacific Railway ‘CP-T’ at $285.56, MEG Energy ‘MEG-T’ at $11.07 and Toromont Industries ‘TIH-T’ at $66.95 all climbed to new TSX 52-week trading highs while Artis Real Estate Investment Trust ‘AX-T’ at $11.45, Dollarama Inc. ‘DOL-T ’at $39.00 and Kinross Gold ‘K-T’ all fell to new 52-week trading lows.




For the Week – the Dow Industrials slightly lower by 0.04% to 26,447, with the S&P 500 down by 0.96% to 2,886 and the NASDAQ off by 3.21% to 7,788. In Canada – the TSX Composite fell by 0.79% to 15,946 and the TSX Venture was 0.42% lower at 706.




With Commoditiesgold bullion gained 0.84% to US$1,206, while copper dropped by 1.78% to US$2.76, as crude oil gained 1.49% to US$74.34 and natural gas rose by 4.32% to US$3.14. Overall, the CRB Spot Commodity Index gained 0.48% to end the week at 417.




The Canadian dollar lost 0.23% against its southern cousin to finish the week at US$0.7729.




And the closely watched CBOE Volatility Index or VIX rose by 2.7-points to end the week a somewhat more nervous level of 14.82.




And Finally – In an 180-degree look to the future – Norway’s $1-trillian Sovereign Wealth Fund – funded mainly from the country’s fast North Sea petroleum royalties – is sighting poor returns in reducing its $40-billion exposure to oil & gas stocks.


Posted October 10, 2018

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