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http://ymlp329.net/zAs3sQ ——————————————————————————– October 28, 2012 Week & Month In Review…
Week & Month In Review For October 22 to October 26, 2012 Canadian Companies mentioned include:
* Fairborne Energy Ltd. (TSX:FEL) * Mansfield Minerals Inc. (TSX-Venture:MDR) * Lynden Energy Corp. (TSX-Venture:LVL) * Intertainment Media Inc. (TSX-Venture:INT) * Fairmont Resources Inc. (TSX-Venture:FMR) * Zecotek Photonics Inc. (TSX-Venture:ZMS) U.S. Companies mentioned include:
* Article Published, October 24, 2012: InspireMD Stents Meet Endpoint and Outperform Standards of Care Today (http://www.allpennystocks.com/aps_us/special-reports/305/inspiremd-stents-meet-endpoint-and-outperform-standards-of-care-today.htm) (U.S. Company) * Article Published, October 24, 2012: While Vringo Shares Soar on Lawsuit Speculation Zecotek Shares Offer Larger Upside (http://www.allpennystocks.com/aps_ca/special-reports/304/while-vringo-shares-soar-on-lawsuit-speculation-zecotek-shares-offer-larger-upside.htm)(CDN Company) * Article Published, October 26, 2012: Rising Inflation Will Send Gold and Ultimately Juniors Like Kesselrun Resources Higher (http://www.allpennystocks.com/aps_ca/special-reports/305/rising-inflation-will-send-gold-and-ultimately-juniors-like-kesselrun-resources-higher.htm)(CDN Company) Video charts for the week:
* October 23rd Technical Video Chart For FMR:CA. The Fairmont Resources chart is making a nice uptrend throughout October and climbing off a bottom support around 6 cents. The RSI has moved into bull mode and the MACD is “crossing the money line,” which is signaling that the upward pressure should continue. view:
( http://www.youtube.com/user/AllPennyStocks#p/a/u/1/4vBkeEqQPQo ).
* October 24th Technical Video Chart For YMI. YM BioSciences has bounced nicely off a new bottom support at $1.45 to climb as high as $1.73 last week. After a one-day consolidation, the chart looks poised for continuation of the climb to possible test key moving averages and resistance at $1.85. view:
( http://www.youtube.com/user/AllPennyStocks#p/a/u/1/wZClnc6bfaE ).
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WEEKLY & MONTHLY UPDATE -NORTH AMERICAN MARKETS FALL ON WEAK EARNINGS FORECASTS Stocks in North America puttered along on Monday with a litany of earnings reports on tap for the week before a collapse on Tuesday that paralleled the triple-digit losses from the prior Friday which sunk markets to unrecoverable levels for the week. The crux of sentiment for the week was earnings reports with bellwethers and blue chips steadily reporting earnings that were not far either direction from Wall Street expectations. The kicker, however, was tepid outlooks for upcoming quarters based upon unfavorable exchange rates and somber global economic growth. Even positive data showing that the housing industry in the United States is maintaining its recovery course was muted in the face of earnings reports.
The markets took a lashing on Tuesday with 33 S&P 500 companies reporting earnings and about 60 percent of them missing sales estimates. Multi-national giants such as 3M and Dupont headed-up the laggards and heightened awareness about global growth as 3M slashed its outlook, citing concerns about what it called “current economic realities.” So far, more than 50 percent of S&P 500 companies have reported earnings with only 36 percent beating analyst expectations for revenue, although more than 70 percent have topped earnings forecasts.
Generally, about 55 percent of the companies report earnings higher than analysts predict. Worse yet is outlooks. A typical ratio of warnings of weaker-than-expected profit outlooks to positive profit outlooks is 2.4 to 1. Through the latest earnings season so far, the ratio is about 10 warnings per 1 positive outlook.
With earnings the main focus this past week, investors largely ignored China showing some signs of stabilization in their economy. The China HSBC Flash Manufacturing Purchasing Managers Index (PMI) rose to a three-month high of 49.1 in October. This is the 12th consecutive month that the key index has scored below 50 – the benchmark that separates contraction from expansion – but, there is finally some signs that the manufacturing industry for the world`s second biggest economy may be modestly strengthening.
Meanwhile, the downturn in the manufacturing in the euro zone appears to be deepening with contraction being shown in Germany, France and several smaller, peripheral countries. According to a closely-watched Ifo Institute survey, business confidence in Germany, the biggest economy in the 17-country euro zone, dropped sharply in October to its lowest level in more than 2-1/2 years amid poor assessments of current conditions and future outlooks. “The dark clouds over the German economy are darkening,” said Ifo president Hans-Werner Sinn.
Further dampening sentiment from Europe, Standard & Poor`s downgraded BNP Paribas SA, the largest bank in France, from A+ to AA- and cut its outlook for ten other French banks, including Societe Generale and Credit Agricole. The credit rating agency is citing worries that the banks may be hurt by extended economic weakness in Europe and a weakening housing market.
As we stated in the prior week in review, earnings reports were going to dominate headlines with economic data being relatively negligible this past week. Such was completely the case. Although this week will still provide a litany of earnings reports, it is going to take something substantial from companies to change the mood towards the future earnings now that precedent is set. To that end, investors are going to be focused on a stream of economic data from Washington again this week with the U.S. presidential election only a matter of days away. Importantly, the latest unemployment rate will be coming on Friday which could set the markets on its side if not in line with projections. A key gauge of the health of the States, the unemployment rate has been on topic of tampering over the past four weeks, for which any allegations have been refuted. Being the last reading before the elections, the report on Friday will receive unprecedented attention.
The U.S. dollar gained ground on the Canadian dollar for the third straight week, its longest string of weekly advances since June, on demand concerns for energy products. Soft economic data from the euro zone helped push the value of the loonie, to its lowest level against the greenback since early August. Crude oil, the largest export from Canada lost value for the second straight week. The ICE dollar index, which measures the USD against a basket of currencies, rose by 0.56%.
Across the week, the Canadian dollar weakened by 0.47% against the US dollar, pushing it ever-closer to parity again. Next week will begin with one Canadian dollar buying US$1.00225. Because of a strong start to October, the loonie is actually still holding onto a 0.56% monthly gain against it U.S. counterpart.
* Gold futures lacked interest for the third straight week and fell on Wednesday to the lowest level since September 6 with a drop below $1,700 per ounce before edging back upward on Thursday and Friday.
Bullion generally trades on momentum and weak global economic data combined with mixed data from the U.S. has kept investors at bay for the past few weeks and strengthened the US dollar. Also weighing on gold this past week was comments from Fed Chairman Ben Bernanke who said that he will probably not serve a third term as leader of the central bank if President Obama is re-elected. Bernanke has been controlling the reigns behind monetary easing policies that could be lessened without Big Ben at the helm. So-called quantitative easing – bond buying and money printing by the Federal Reserve – devalues the dollar and increases investments in gold. December contracts were the most actively traded this past week; slipping 0.7%, or $12.10 per ounce, to close the week at $1,711.90 on the Comex division of the New York Mercantile Exchange. So far throughout October, gold has fallen by $62 per ounce, a loss of 3.5%.
* Silver futures have also lost their luster; on Wednesday hitting their lowest level since the final day of August. Global economic uncertainty is keeping traders exercising “risk-off” strategies in light of moves like Standard & Poor`s to downgrade major French banks as part of commentary about deteriorating economic conditions in southern Europe. A stronger dollar is damaging to the value of silver as an inflation hedge, but weakness in economies is a double-edged sword for traders avoiding the white metal because of its many uses in industrial applications. Silver for December delivery was the most actively traded; shedding another 0.19%, or $0.061, to $32.036 per ounce. Silver entered October at multi-month highs, but has given back 7.35%, or $2.541 per ounce so far with three trading days left in the month.
* Copper prices fell for six straight days (losing about 20 cents a pound) before a flat day on Friday stopped the slide. Much like its precious metal cousins, copper fell for the third straight week. The industrial red metal has been bogged down primarily because of lowered factory output in China, the world`s top consumer of copper.
Downstream buyers of copper have been in “wait and see” mode for hints on outlook that sluggish demand is going to start increasing again, so buying pressure has been tepid. December contracts were the most actively traded on New York`s COMEX exchange during the week; losing 8.75 cents, or 2.41%, to $3.55 per pound. As October winds to a close, copper is down 5.53%, or 20.8 cents per pound.
* Oil prices rode the spiral of other commodities before basing in the final part of the week as Hurricane Sandy – dubbed “Frankenstorm” because of its massive size – headed towards the U.S.`s East Coast threatening refinery shutdowns and potentially delaying import deliveries. Supply concerns related to geo-political concerns from the Middle East and now Frankenstorm would normally offset economic worries that future demand would be lower, but more than ample reserves have thwarted any real concerns about supply falling short.
December contracts for West Texas Intermediate crude were the most actively traded and fell for the fifth time in six weeks; fading $4.16, or 4.60%, to $86.28 per barrel. To date, October has not been friendly to crude bulls, with the black gold losing $5.91 per barrel, or 6.41%.
Equity Market Snapshot:
(All percentages on a weekly basis unless otherwise noted) * Major gold miners were mixed with slipping bullion prices.
Agnico-Eagle Mines (TSX:AEM, +5.95%) continued its winning ways and Goldcorp (TSX:G, +1.58%), Barrick Gold (TSX:ABX, +1.48%) rose as well, but Kinross Gold (TSX:K, -4.28%), Yamana Gold (TSX:YRI, -3.07%) and Newmont Mining (TSX:NMC, -1.97%) fell.
* Helping lift Agnico-Eagle Mines Ltd. was its earnings report showing a quarterly profit on record gold production and the miner boosting its output forecast for the year by 5 percent.
* Energy stocks were a drag on the markets with Canadian Natural Resources (NYSE:CNQ, -4.83%), Imperial Oil Ltd. (NYSE:IMO, -3.01%), Suncor Energy (NYSE:SU, -2.35%), Exxon Mobil (NYSE:XOM, -1.66%) and Talisman Energy (NYSE:TLM, -7.32%) all closing red, although Cenovus Energy (NYSE:CVE, +0.50%) managed to eke upward.
* In big energy news, the Canadian government blocked Malaysian state oil firm Petronas` $5.17-billion bid for Progress Energy Resources Corp. (TSX:PRQ, -15.20%). Subsequently, Progress was hit by a number of price target cuts, sending shares lower. The surprise move blocking the Progress Energy deal brings in focus the much larger $15.1-billion Chinese offer for oil producer Nexen Inc, (TSX:NXY, -7.48%) for which Nexen said it still expects the deal to close in the current quarter.
* The biggest of banks in the US broke stride after strong earnings reports the prior week. UBS AG (NYSE:UBS, +1.07%) was a rare winner with Goldman Sachs Group (NYSE:GS, -3.38%), Bank of America (NYSE:BAC, -3.39%), Citigroup (NYSE:C, -1.51%), JPMorgan Chase (NYSE:JPM, -2.74%) and Wells Fargo & Co. (NYSE:WFC, -1.08%) shedding points. XLF (NYSE:XLF, -1.92%), the financials select sector SPDR that tracks the financial stocks in the S&P 500, closed in the red.
* The U.S. attorney in Manhatten filed a $1 billion U.S. lawsuit against Bank of America Corp for what it claims are the bank`s fraudulent practices underwriting mortgages through Fannie Mae and Freddie Mac.
* The biggest banks in Canada narrowly outpaced their US peers.
National Bank of Canada (TSX:NA, +2.33%), Canadian Imperial Bank of Commerce (TSX:CM, +0.21%) and Bank of Montreal (TSX:BMO, +0.29%) grew in value, but Toronto-Dominion Bank (TSX:TD, -1.94%), The Bank of Nova Scotia (TSX:BNS, -0.94%) and Royal Bank of Canada (TSX:RY, -2.89%) lost points.
* Royal Bank of Canada confirmed it will acquire the Canadian auto finance and deposit business of Ally Financial Inc. at a net cost of about $1.4 billion.
* TD Bank said that it is going to buy the credit card portfolio of U.S. discount retailer Target Corp. (NYSE:TGT, +2.72%) for about $5.9 billion. TD also agreed to a seven-year deal to underwrite, fund and own the retailer`s future credit card and Visa receivables in the United States.
* Social network company Facebook Inc. (NASDAQ:FB, +15.49) had its best week in a long time as its earnings came in as expected and sales rose by 24 percent. The company was also in the news related to Citigroup firing two analysts for disclosing confidential information before the Facebook IPO in May and other private information pertaining to Google`s (NASDAQ:GOOG, -0.97%) YouTube revenue.
Citigroup was fined $2 million by the Massachusetts Securities Division for subpar supervision of the analysts.
* Microsoft Corp. (NASDAQ:MSFT, -1.50%) pared weekly losses as the tech giant`s Windows 8 program went on sale Friday. Many analysts are viewing the latest operating system by the blue chipper as a critical test of whether Microsoft can successfully make the transition into a marketplace now increasingly dominated by smartphones and tablets.
* Dow bellwether Caterpillar, Inc. (NYSE:CAT, +0.47%) launched this past week`s earnings parade by beating estimates, but providing a dim outlook. Cat said that its profit will be $12 to $18 per share, down from prior estimates of $15 to $20 per share, citing global economic headwinds.
* Shares of DISH Network Corp. (NASDAQ:DISH, +0.23%) lofted mildly higher after saying it reached an agreement with privately-held Voom HD Holdings to pay $700 million in cash to settle a dispute over wireless multi-channel video distribution and data service licenses.
* Shares of chemicals maker and Dow component DuPont (NYSE:DD, -8.43%) fell upon reporting weaker-than-expected quarterly earnings and plans to cut 1,500 jobs worldwide.
* Nike Inc. (NYSE:NKE, -5.50%) said it has come to terms to sell is Umbro unit to Iconix Brand Group Inc. (NASDAQ:ICON, +0.37%) for $225 million.
* Netflix (NASDAQ:NFLX, +7.08%) shares plunged after the company reported disappointing earnings for new streaming subscriptions and offered weak guidance, but rebounded quickly on rumors the Microsoft may be interested in buying the company.
* Merck & Co. (NYSE:MRK, -1.87%), the second biggest drugmaker in the U.S., posted mixed results for the third quarter. Profit during the quarter rose by 2 percent to $1.75 billion, or 56 cents per share, from $1.72 billion, or 55 cents per share in the year prior quarter.
However, sales dipped to $11.49 billion in the latest quarter compared to $12.02 billion in 2011, a 4 percent decline, because of unfavorable foreign exchange rates.
* The U.S.`s biggest company by valuation, Apple, Inc. (NASDAQ:AAPL, -0.96%) fell for the fifth straight week after breaking the $700 per share mark on September 17. The tech company unveiled its new 7.9 inch iPad mini, half the size and weight of its original tablet, and its new 13-inch MacBook Pro at an event in California Tuesday afternoon. Apple, one of the most widely held stocks in the S&P 500, reported quarterly results that missed expectations, as iPad sales came in lower than forecasts, although its forecast for next quarter was stellar. The company said it expects sales of around $52 billion, up 12% from last year`s holiday quarter.
* Shares of Monster Beverage (NASDAQ:MNST, -13.99%) stumbled for the second straight week on news of one lawsuit already being filed and more news that five people may have died from the namesake energy drink over the past few years. The Food and Drug Administration is conducting an investigation.
* Canadian National Railways (TSX:CNR, -1.29%) beat earnings estimates by 1 cent in earning $644 million, or $1.52 per diluted and adjusted share in the third quarter. The company also maintained its earnings outlook for 2012 despite anticipating a difficult end to the year as a result of a weak economy.
* Also on the tracks, Canadian Pacific Railway Ltd. (TSX:CP, +3.83%) beat analysts predictions for both sales and earnings when it said its third-quarter net income was $224 million, an increase of $37 million, or 20 per cent and diluted earnings per share of $1.30; up 18 per cent compared with a year earlier.
* Teck Resources Ltd. (TSX:TCK.B, -1.30%) shares dropped lower as the diversified miner announced plans to drastically cut capital spending for the remainder of 2012 and through 2013 against the headwinds of slowing global economies. Teck reported net income attributable to shareholders of $180 million, or 31 cents per diluted share, compared with $814 million or $1.37 in the same 2011 period. Revenue was $2.5 billion, down from $3.38 billion.
* Colgate-Palmolive Co. (NYSE:CL, -3.59%) reported that it will be cutting six percent of it employees over the next four years as part of a restructuring. Following a theme that ran true across blue chips this past week, the consumer staples company said that earnings rose in the latest quarter, but sales declined.
Weekly Indices Results:
The S&P TSX Composite Index pulled-up from lows, but still closed down; carving-off 115.68 points, or 0.93%, to 12,300.30. The TSX Venture Exchange has now fallen two out of the last three weeks; dropping 14.78 points, or 1.12%, to 1,300.84 last week.
In the States, the Dow Jones Industrial Average continued its up-a-week, down-a-week pattern; reducing its total by 236.30 points, or 1.77%, to 13,107.21 this past week. The much-broader S&P 500 performed similarly; unloading 21.25 points, or 1.48%, to close at 1,411.94. The tech-rich NASDAQ Composite has now fallen three straight weeks; giving-up another 17.67 points, or 0.56%, to 2,987.95 on the week.
Canadian Economic Data:
* The Bank of Canada said for the 17th straight time that it will keep its benchmark interest rate at one percent. Bank governor Mark Carney did signal that he is becoming concerned with household debt and that a interest rate hike may be necessary if the debt problem worsens. The move to keep the one percent rate intact was widely expected. Economists believe that the interest rate could be moved upward somewhere around mid-2013. Statistics Canada revised household debt to 163 percent of income. The main bank also upwardly revised its 2012 growth outlook from 2.1% to 2.2%.
* StatsCan reported that retail sales rose 0.3% to $39.1 billion in August. After removing the effects of price changes, particularly higher food and gasoline prices, retail sales in volume terms declined 0.3%. In current dollars, gains were reported in 5 of 11 subsectors, representing 53% of total retail trade; led by a 2.9% rise at gasoline stations. Sales at miscellaneous retailers paced laggards with a 3.1% decline, marking its second straight month of falling sales.
Next week, economic data will entail the Industrial Product Price Index, Raw Materials Price Index and the August Gross Domestic Product stats on Wednesday; and key readings on Unemployment on Friday.
U.S. Economic Data:
* Sales of new homes jumped to a 2-1/2 year high in September, lending more evidence that the U.S. housing market continues to mend itself. The Commerce Department said that new home sales rose by 5.7 percent to an adjusted annual rate of 389,000, up from a 368,000 pace in August. The rate was at the highest since April 2010, a time when a homebuyer tax credit was driving sales.
* With growth still being painstakingly slow and the unemployment rate still elevated, the Federal Reserve said that they decided at their September meeting to hold interest rate at historic lows through mid-2015. At the latest meeting of the Federal Open Market Committee, it was also decided to continue with QE3, an open-ended buying program of $40 billion in mortgage-backed securities each month, and Operation Twist, a policy to convert short-term debt to long-term.
* The Commerce Department reported that durable goods – orders for items meant to last at least three years – rebounded in September, largely because of an increase in bookings for commercial jets.
Durable goods orders rose 9.9% during the month, following a drop of 13.1% in August and representing the sharpest climb in more than two years. The inflated number were interpreted with caution, however because the $14.1 billion increase in aircraft orders overshadowed a disappointing report in general. Excluding transportation, durable goods orders only rose 2.0%. So called-core durable goods orders, which strip-out defense and aircraft, were flat during September after a paltry 0.2% rise in August.
* For the week ended October 23, the Labor Department said that first time applications for jobless benefits dropped by 23,000 to a seasonally-adjusted 369,000. The report was basically in line with economists predictions of a drop to 370,000. The four-week average, regarded as a better barometer of labor trends because it smooths-out volatility, nudged upward by 1,500 to 368,000.
* The reading for third quarter gross domestic product showed that the U.S. economy modestly expanded during the three months ended September 30; posting an increase of 2%. Economists were calling for growth of 1.7%. The 2 percent growth – which equaled the rate during the first quarter and topped the 1.3% growth in Q2 – is still below the 3% expansion that economists consider healthy. Greater spending in the housing industry, government and consumer spending fueled the growth. Inflation rose at a rate higher than expected, rising to a 1.3 percent annual rate from 0.7% in the second quarter.
Next week, data in the States will bring Personal Income and Outlays and the Dallas Fed Manufacturing Survey on Monday; the S&P/Case Shiller Home Price Index on Tuesday; ADP Employment Report on Wednesday; Initial Jobless Claims and ISM Manufacturing Index on Thursday; and Factory Orders and Employment Situation on Friday.
Penny Stocks to Watch & Company Spotlight Results:
Among the stocks we watched this week, oil and gas company Fairborne Energy Ltd. (TSX:FEL) slipped on Monday and never recovered; finishing the week at $1.68 for a loss of a nickel per share, or 2.89%, with an intraweek high of $1.72. The other Canadian stock on our radar, miner Mansfield Minerals Inc. (TSX-Venture:MDR) gapped-up Monday to its intraweek high of 80 cents, but drifted lower to close the week at 74 cents for a loss of 4 cents, or 5.13%.
In the States, telecommunications company DragonWave Inc. (OTCBB:DRWI) stumbled early, but made-up the losses on Thursday and Friday to close the week ahead by 1 cent, or 0.4%, at $2.48 with an intraweek high of $2.52. The other U.S. stock on our watchlist, drugmaker YM BioSciences Inc. (AMEX:YMI) climbed in the first half of the week to an intraweek high of $1.69 before giving back the gains to close the week at $1.57 for a loss of 4 cents, or 2.48%.
If you`d invested in all four stocks and held them to the end, you`d have seen an average loss of a 2.52%. However, if you`d bought all four at the beginning of the week and sold each at its peak, you`d have realized stout gains of 2.24%.
Next week, followers of the penny stocks to watch will be seeing a new feature. Starting next week, the weekly penny stocks to watch will be replaced by the Technical Penny Stock of the Day. One penny stock (Canadian or U.S.) will be chosen each day based on its technical merits as analyzed through AllPennyStocks.com’s partner website, BullishInvestor.com. BullishInvestor.com is a financial portal focused on providing free technical analysis and stock screening capabilities to help investors optimize their investing capabilities.
BullishInvestor.com maintains proprietary technical analysis algorithms to identify turning points for stocks using many of the well known technical indicators such as MACD, RSI, Money Flow Index, Average Directional Movement and much more. The AllPennyStocks.com technical penny stock of the day was designed specifically for AllPennyStocks.com based on feedback from users of the website. We hope that our investors enjoy the new feature and as always, we welcome all feedback. To reach us, email us at email@example.com and let us know what you think. To view the new technical penny stock of the day feature along with our first mentioned Company, click here: ( http://www.allpennystocks.com/aps_ca/stocks2watch/ ).
Our latest Canadian spotlight, Fairmont Resources Inc.
(TSX-Venture:FMR), slipped back near a support level before making a climb on Friday, so keep an eye on the company to see if it can continue with buying pressure to start the new week. Last week, the company announced that it has conducted a follow up prospecting program based on the results of a summer field program on its Marmion South Property, located near Atikokan, Ontario, and contiguous with Osisko Mining Corporation`s (TSX:OSK) Hammond Reef Property (530.6M tons at an average grade of 0.62 g/t gold for 10.5 million ounces and based on a cut off of 0.30 g/t gold). The prospecting program focused on results returned from summer field work on the southwest extension of the northeast-trending Jack Lake-Pettigrew trend. The high-grade, granite-hosted Jack Lake gold deposit, located 1 kilometer north of the property, was discovered in 1878, saw limited production from 1899-1902, and hosts several historical, non 43-101 compliant resources calculations, the most recent comprising 8,910 tons grading 15.53 g/t for 4,000 ounces. Results are pending from the latest prospecting.
Another company that we are closely watching, Intertainment Media Inc.
(TSX-Venture:INT) (OTCQX:ITMTF) also pulled-back early in the week, but closed with strong momentum on Thursday and Friday. During last week, the company announced it has agreed in principal, and is in the process of finalizing a definitive agreement to have Toronto-based Paymobile Inc. facilitate its financial services processing for Intertainment`s Sweet Card Program (www.thesweetcard.com). The Sweet Card is a customized social media financial services program for celebrities and socially active specialty brands combining mobile wallet technology, pre-paid debit platform and a robust fan centric loyalty program. Sweet Cart is hitting a “sweet spot” because, according to Aite Group and Mercator Advisory Group, prepaid debit card issuance programs have grown from $1.6 Billion in 2004 to an estimated $120 Billion in 2012, with prepaid loads reaching $57 Billion in the US in 2011.
This active company also said that its real time global experience platform, Ortsbo (www.ortsbo.com), is expanding its recent successful deployment of its Fan Talk (www.ortsbofantalk.com) fan engagement programs with KISS and Daughtry to include major artists bringing global language and e-commerce opportunities to fans around the world.
Today, fans can gather at one location to interact with Facebook, Twitter, Instagram, Google+, Flickr, YouTube and more, instantly translating content into over 60 languages, allowing global fans to consume media in their native language in combination with unique merchandising and revenue opportunities. Ortsbo has strategically partnered with FeedMagnet. Fan Talk`s Social Media Hub is a proprietary development platform by Ortsbo and the social feed program is powered by FeedMagnet of Austin, TX, a pioneering leader of social media aggregation, digital display and interaction for mass audience engagement.
We also saw that a previous US spotlight of ours, Get Real USA, Inc.
(Pink Sheets:GTRL) had positive developments last week. The film/production company announced they feel they`re close to signing a worldwide distribution deal for the award-winning movie, “The Message”. “The Message” is a riveting thriller about a young wife and mother of two children who is challenged to overcome her passive beliefs on religion after a serious car accident. Receiving haunting images of her past she is forced to make a decision that will decide her fate. This movie won top honors at the 2012 Cape Fear Independent Film Festival; an annual event which brings new and independent artistic visions to the local community.
Separately, Get Real USA announced that it is in the beginning stages of development of a financing fund under the direction of advisor and film finance veteran Gregory M. Walker. Walker is developing a GTRL wholly-owned funding subsidiary; focus will be film production funding, film tax credits and other financing arrangements to help producers complete projects.
The Month at a Glance – October October has been a month of risk aversion and securing of profits from markets rising higher month after month on the back of monetary easing efforts by central banks across the planet. Uncertainty and choppy trading was king in October as reality about global growth finally seems to be setting-in; shaking the markets to their first monthly loss since May. On two different occasions in the past two weeks (actually in the last six trading days), the Dow Jones Industrial Average recorded daily losses of the largest scale since June.
It doesn`t take being a Chartered Financial Analyst to recognize that investors have been focused on central bank initiatives to go “all in” to try and stimulate growth for slowing global economies. Now that those policies are in place and proving that they have less immediate (and potentially long-term) impact, the reality of sluggish growth in leading countries such as the United States, China and Germany, not to mention countless smaller countries, has finally hit investors between the eyes. Bellwether companies – as discussed above – are now also deeply concerned about macro-economic conditions and lowering forecasts, raising concerns across Wall and Bay Streets.
It is notable that history has shown earnings typically don`t just slide for one quarter. Data from Strategas Research Partners shows that earnings turning negative on 18 occasions in the past six decades have averaged 3.4 quarters of downturn before growth once again returns. Not to be completely a “Negative Nelly,” there were three instances that earnings reversed course immediately. Further, there are specific situations in the United States, such as the impending fiscal cliff, that can help bolster temperment if provisions are made in the near-term. Searching for additional optimism points to data this past month which showed that the U.S. economy still grew at a 2% clip in the third quarter and China`s GDP expanded by 7.4% in the third quarter. While those figures may be less than hoped, the two biggest economies in the world are still expanding, despite many European trade partners facing recessions.
The employment situation was hot button all October. A report in the States blew most investors out of the water in showing that – for the first time since Barrack Obama took the seat as President – the unemployment rate fell below 8 percent and Canada chimed-in with jobs growth that was five-fold larger than experts predicted. On the flip side, the European Union reported that the unemployment rate in the euro zone hit a record 11.4% in August. Further, the unemployment rates for June and July also were upwardly revised up to 11.4%, meaning the 17-nation group has seen its jobless situation at the same exorbitantly high level for three straight months and at its highest since being kept dating back to 1995.
The month started optimistically as Fed chief Ben Bernanke and ECB leader Mario Draghi reiterated stances on the latest rounds of bond buying as protestors took to the streets in Greece and Spain.
However, Federal Reserve Bank of Philadelphia president Charles Plosser got traders to raise an eyebrow when he said the central bank`s latest round of stimulus measures is unlikely to help growth.
Protestors in Greece are furious over ongoing cuts as the country looks to shrink its debt mountain and impress the ECB and IMF to get its next tranche of 31.5 billion euros as part of its larger bailout package. In Madrid angry citizens are calling for a new election and the ousting of Prime Minister Mariano Rajoy and the conservative government that imposed tax hikes and slashed spending to try and strengthen its debt-ridden economy and lower its nearly 25 percent unemployment rate. An audit of Spain`s major banks showed they would need extra capital to survive further economic downturn. The stress tests showed the nation’s banks have a combined capital shortfall of 59.3 billion euros ($76.2 billion U.S).
Spain is still a thorn in the side of investors as the embattled country continues to refuse to ask the European Central Bank and International Monetary Fund for a bailout. With the country buried in debt that teeters on junk status, investors want to see them accept funds to bolster their economy, but Spanish leaders remain stubborn because of firm policies that will be imposed to repay borrowed funds and rebuild their banking system.
The International Monetary Fund said it projected world economic growth of 3.3 percent for 2012, down from its original projected of 3.5% and lowered its outlook for 2013 from 3.9% to 3.6% while also downgrading growth prospects for China. The IMF added that Italy, Spain and others will likely miss budget deficit targets this year, adding to pessimism for the euro zone condition.
On the whole, the global economic condition is not much different as October winds to a close. North America and China are demonstrating modest growth that simply aren`t at levels that economists consider healthy to foster lower unemployment rates. The most optimistic data in the States continues to come from the housing market. Europe is still in turmoil. China is still giving hints of manufacturing finding a bottom. The new influence, as mentioned on many occasions in this report, is earnings outlooks. With the first month of the fourth quarter starting with a whimper, the bulls are going to be searching for – and leveraging – anything optimistic heading into the end of the year.
Monthly Indices Results:
* S&P TSX Composite: down 0.14% (-17.16 pts.) * TSX-Venture: down 2.52% (-33.67 pts.) * Dow Jones Industrial Average: down 2.46% (-329.92 pts.) * S&P 500: down 1.99% (-28.73 pts.) * NASDAQ: down 4.12% (-128.28 pts.) Although October was a down month for all the major North American indices, the month was only the second red close for the Dow Jones Industrial Average in 2012. The index is still ahead more than 7 percent this year. The S&P 500 and Nasdaq are up by 12 percent and 14 percent, respectively. The TSX is up by about 1.5%, but the smaller Venture exchange is down about 11 percent this year.
Monthly Equity Market Snapshot:
(All percentages on a monthly basis unless otherwise noted) * Aside from the Apple (NASDAQ:AAPL, -2.52%) news above, the big fruit said earlier this month that it sold over 5 million iPhone 5`s in the first week of sales to the disappointment of Wall Street.
Analysts were calling for between 5 and 8 million sales.
* Embattled smartphone maker Research In Motion Ltd. (TSX:RIM, +0.13%) notched its second advancement in as many months as it finally produced some news that assuaged shareholders in providing some details on its Blackberry 10 operating system; saying that it added almost two million new subscribers in the latest quarter. The Waterloo, Ontario-based technology company reported a quarterly loss of $235 million or 45 cents per diluted share compared with a profit of $329 million or 63 cents per share a year ago. RIM`s adjusted loss was $142 million or 27 cents per share, a number far better than analysts predicted. Research analysts at Jefferies Group reaffirmed its underperform rating for the BlackBerry maker during October as well.
* Google (NASDAQ:GOOG, -10.52%) stock hit an all-time high of $764.89, eclipsing the previous record set in November 2007 before its shares took a swift downward plight. With a printer error accidentally releasing its earnings a few hours before scheduled, Google helped start the earnings panic on Wall Street as it missed on estimates on both sales and profits in its latest quarter. Net income was $2.18 billion compared with $2.73 billion last year and revenue was $11.3 billion, below the $11.9 billion expected by analysts. The tech beast blamed RR Donnelly & Sons (NASDAQ:RRD, -4.43%) for the mishap that led to shares of GOOG being temporarily halted as traders were unloading shares.
* Speaking of Google, shares of Vringo Inc. (AMEX:VRNG, +37.93%) jumped after the provider of video ringtones and other technologies reported that a federal judge cleared the path for it to proceed with a patent suit against Google, AOL Inc. (NYSE:AOL, -2.13%) and others.
Vringo contests that the defendants infringed upon its patents related to its Web-search technology. A trial began mid-month and is reportedly more than halfway complete.
* A brawl involving thousands of workers at Foxconn Technology Group, a major supplier of computer components to global electronics companies, including Hewlett Packard (NYSE:HPQ, -17.41%), Sony (NYSE:SNE, +1.28%), Apple and Microsoft (NASDAQ:MSFT, -5.21%), sent 40 people to the hospital and resulted in operations being suspended at a Taiyuan, China factory. Foxconn was also investigated (again) for employing underage workers as young as 14 years of age at another one of its factories.
* Shares of Sealy (NYSE:ZZ, +2.29%) rose after rival mattress maker Tempur-Pedic (NYSE:TPX, -15.02%) said it was buying the company in a deal valued at $1.3 billion. Sealy cancelled its earnings call upon the news, but did report zero earnings per share, falling short of expectations.
* Tivo, Inc. (NASDAQ:TIVO, -4.41%) said that it has finally struck a deal with Verizon (NYSE:VZ, -0.76%) to receive $250 million to dismiss all litigation and end a three-year argument over patents. Tivo is also in the midst of a battle with Google for which it claims it should win millions for Google infringing upon its patents.
* For the first time since it began trading in May, Facebook (NASDAQ:FB, +1.30%) had consecutive green months. With its earnings report last week, shares were able to overcome early-month losses spurred in part by a Barron`s article that called the social media company overvalued, put a $15 price tag call out and told its audience to stay away. Facebook introduced “Gifts,” a service that will allow users to ship physical presents to their friends through the Facebook interface. The company also said that it reached 1 billion users in October after only having 500 million users in July 2010. Looking for additional ways to drive revenue Facebook also unveiled a new plan to have users pay $7 per month to have their posts be promoted to friends.
* Ceramics maker Ceradyne (NASDAQ:CRDN, +43.02%) saw shares soar after 3M Co. (NYSE:MMM, -4.75%) said that it will pay $35 a share to acquire the company, a 43 percent premium over the prior trading day`s closing price. Excluding cash and equivalents, the transaction is valued at about $670 million.
* Nokia Corp. (NYSE:NOK, -0.58%) reported striking a deal with Oracle (NASDAQ:ORCL, -1.49%). The pact will allow Oracle customers access to Nokia’s location platform by integrating the Finnish company`s technology into Oracle`s Fusion Middleware Map Viewer.
* Shares of Air Canada (TSX:AC.B, +40.16%) took to the sky as TD Bank hiked its target price from $2 to $3 a share, citing “several” positive developments at the airline, including a favorable arbitration ruling this month in its dispute with regional partner Chorus Aviation and strong traffic results lately.
* Shares of Best Buy Co. (NYSE:BBY, -13.02%) rallied initially, but fell for the seventh out of eight months. The rally was originally sparked by a Reuters report that Best Buy founder Richard Schulze and buyout companies were reviewing the electronic retailer’s books which could eventually lead to a $11 billion offer to buy the big box retailer.
* Big drugmaker Eli Lilly & Co. (NYSE:LLY, +5.91%) gained ground on news that its experimental drug solanexumab showed signs of slowing memory loss in mild Alzheimer`s patients considerably. Results combined from two studies showed a 32 percent decrease in memory loss, offering hope to patients of the debilitating disease who currently have no real options for treatment. On the earnings slate, the drugmaker saw a 7.3% rise in profits (thanks to a one-time payment), a drop in revenue and affirmed its yearly outlook.
* Protesters hit the fields in October in Texas attempting to stop TransCanada PipeLines (TSX:TRP, -0.76%) from completing its Texas portion of the 1,660-mile-long Keystone XL pipeline by next year.
More than 30 people have been arrested since August for their protesting efforts; generally for trespassing on land that is now government-owned through purchases enforced by the eminent domain law.
* Apollo Group Inc (NASDAQ:APOL, -32.12%) plummeted to an 11-year low as the owner of the University of Phoenix, the largest U.S. for-profit college, forecast a weak 2013 and announced new student sign-ups fell 14 percent during the fourth quarter. In order to save about $300 million by fiscal 2014, the company is slashing jobs and shuttering half of its University of Phoenix learning sites.
* Japan`s Softbank Corp. (Pink Sheets: SFTBY, -19.96%) said it will buy a 70% stake in U.S. mobile carrier Sprint Nextel Corp. (NYSE:S, -0.54%) for about $20 billion in the biggest overseas acquisition by a Japanese firm ever. Softbank said it would acquire a majority stake in Sprint by buying $8 billion of shares directly from the company and then buying another $12.1 billion of shares in the market. The deal is expected to be completed by mid-2013.
* Water technology firm Ecolab (NYSE:ECL, +7.33%) announced plans to boost its offerings in the energy service sector with the acquisition of privately-held Champion Technologies in a deal valued at $2.2 billion. Per the proposed deal, Ecolab will pay $1.7 billion in cash and issue about 8 million shares of its common stock to cover the balance.
* Shares of Celtic Exploration Ltd. (TSX:CLT, +42.61%) sizzled upward after the Calgary-based company received a friendly takeover offer valued at $3.1 billion from Canadian affiliates of Exxon Mobil Corp.
* Canadian Pacific Railway (TSX:CP, +12.51%) had a strong month as it continued its game of executive musical chairs since its intense proxy battle earlier this year. Canadian Pacific announced that Chief Financial Officer Kathryn McQuade will retire on Nov. 1, marking the fourth senior executive to leave Canada`s second-largest railroad in 2012.
* In IPO news, shares of Workday (NYSE:WDAY) made its public debut at $28 per share and rose as high at $57.21 during October before closing Friday at $50.00 as investors continue to show their love for cloud-based web applications. The $28 opening price was even well-above the original proposed price of $21 – $24 per share.
* Shares of Shutterstock (NYSE:SSTK) weren`t too shabby either, as it also priced its IPO higher than originally expected and shares still ran from $17 each to an October high of $25.22 before settling at $23.21 on Friday for a gain to date of 36.53%.
Monthly Penny Stocks To Watch Leaders & Company Spotlight Results:
Among the stocks that we watched in October, the champion of the month in Canada was oil and gas company Lynden Energy Corp.
(TSX-Venture:LVL) whom we selected as a penny stock to watch for the second week of the month at a price of 72 cents per share. Shares moved sideways before taking-off to hit 88 cents on the 18th for a gain of 22.22 percent. In the U.S., the winner for October was Digerati Technologies Inc. (OTCBB:DTGI) which we selected in the third week of the month when shares were at $0.0018. Shares launched quickly to hit a high of $0.005 for a gain of a whopping 177.78%, but have since retraced, which is why we emphasize following support levels and securing gains when they are presented. We congratulate all the followers of our “Penny Stocks to Watch” each week who were able to reap rewards from these most recent Companies. We look forward to our transition into daily technical penny stocks to watch beginning this week and encourage members to check each day for our new technical play as we continue to find gems that are regularly producing solid gains.
We had a busy month uncovering solid companies which we believe are undervalued. Several of our new spotlights had news which we mentioned above, but we`d also like to remind our members to keep a tight watch on Zecotek Photonics Inc. (TSX-Venture:ZMS). The company is a quiet storm brewing with its patent litigation against St. Gobain and Phillips that we discuss in one of our Canadian special reports this week. We encourage investors to read the report: (http://www.allpennystocks.com/aps_ca/special-reports/304/while-vringo-shares-soar-on-lawsuit-speculation-zecotek-shares-offer-larger-upside.htm) and see why we see such an enormous upside to Zecotek.
If you haven`t had a moment to read the abundance of news from Intertainment Media Inc. (TSX-Venture:INT) (OTCQX:ITMTF); do so. The company has forged new deals to build-upon is established footprint via Ortsbo.com and is seeing strong trading action. We have provided plenty of information in our profile and additional valuable information was announced through an interview: (http://smallcapvoice.com/blog/10-11-12-smallcapvoice-interview-with-intertainment-media-inc-itmtf) with SmallCapVoice.com that is mandatory due diligence.
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