Markets Rally As Politicians Move Towards Budget & Debt Ceiling Compromise
allpennystocks Newsletter
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http://ymlp224.net/zATawp ——————————————————————————– October 13, 2013 Week In Review…
Week In Review For October 7 to October 11, 2013 Spotlight Companies Mentioned This Week:
* Fresh Start Private Management, Inc. (OTCQB:CEYY) This week on AllPennyStocks.com:
* Article Published, October 8, 2013: GeoVax Shares at All Time Lows as Clinical Trials Advance and Patent is Awarded (http://www.allpennystocks.com/aps_us/special-reports/394/GeoVax-Shares-at-All-Time-Lows-as-Clinical-Trials-Advance-and-Patent-is-Awarded.htm) (U.S. Companies) * Article Published, October 9, 2013: NovaCopper Narrows Losses in Q3 as Chart Tries to Hold Support (http://www.allpennystocks.com/aps_ca/special-reports/377/NovaCopper-Narrows-Losses-in-Q3-as-Chart-Tries-to-Hold-Support.htm) (CDN / U.S. Company) * Article Published, October 11, 2013: FDA Approves Medicure sNDA for Blood Thinner Drug Aggrastat (http://www.allpennystocks.com/aps_ca/special-reports/378/FDA-Approves-Medicure-sNDA-for-Blood-Thinner-Drug-Aggrastat.htm) (CDN / U.S. Company) Video charts for the week:
* October 8th Technical Video Chart For CEYY. The Fresh Start Private Management chart gapped up on Monday, pushing the stock price above the 50 and 200 day moving averages as the indicators shift towards bullishness. Traders should be looking for continuation with resistance at 5 and 6 cents. view: ( http://www.youtube.com/watchv=XiLOKC6hzSU ).
* October 10th Technical Video Chart For FCU:CA. The Fission Uranium chart has been uptrending all of 2013, but has hit a bit of a roadblock at $1.40. The chart is forming a wedge since those highs in August with an important support at $1.07. Wednesday`s slight move upward has the indicators turning, which should put the chart on technical watch for more upward pressure. view: ( http://www.youtube.com/watchv=YWHmQEjICpM ).
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WEEKLY UPDATE -MARKETS RALLY HARD AS US POLITICIANS MOVE TOWARDS BUDGET AND DEBT CEILING COMPROMISE Wow. What a crazy week for the North American exchanges. The week started sluggishly with the partial government shutdown in the United States moving into its second week and regulators still at a stand-off about even getting into the same room to try and negotiate a budget compromise. The feeling on Wall Street the week prior was calm with little panic, believing that the posturing in Washington would end quickly with a budget compromise. However, when the markets started to get the sense that perhaps it really wasn`t going to end sooner than later and the chances of the US hitting its debt ceiling (meaning it can`t pay its bills) deadline of October 17 increasing, some panic set in with the Vix, or so-called “fear index,” spiking to its highest level in nearly four months.
There was no shortage of commentary on the situation with Republican and Democrat leaders taking turns several times each day taking shots and pointing fingers at each other over who was to blame for the seemingly insurmountable impasse. Treasury Secretary Jack Lew again told officials that they are “playing with fire” if they allow a default to happen by not raising the debt limit. World leaders chimed in as well, including China`s vice-finance minister Zhu Guangyao, normally very reserved about commenting on other country`s politics, warning Washington about the dangers of the nation hitting its debt ceiling. Guangyao said that the US is fully aware of the repercussions globally if it doesn`t resolve its debt ceiling issue and it is the politicians responsibility to fix the matter.
Bank of America, who originally said the government shutdown wouldn`t impact fourth-quarter GDP, changed its tune, lowering its growth estimate for Q4 from 2.5 percent to 2.0 percent. The International Monetary Fund weighed in saying that downside risks are mounting and urged policymakers to make changes to keep the global economy from experiencing subpar growth. The IMF noted all the issues in the US, as well as lingering euro zone problems, slowing growth in China and spending problems in Japan as reasons for cutting its world output forecast for 2013 to 2.9 percent from its July guidance of 3.2 percent. 2014 growth was also trimmed from 3.4 percent to 3.2 percent. The IMF shaved expectations of US growth from 1.7 percent to 1.6 percent for 2013 and from 3.8 percent to 3.6 percent for 2014.
Barry Ritholtz, an equities analyst and CEO of Fusion IQ, said that if the government shutdown drags on for a month or longer, it could trigger a 20 – 30 percent correction in the market. Clearly, the masses who first took the shutdown with a grain of salt where looking far more critically at the situation early in the week.
On Wednesday, the mood started to change dramatically as President Obama, as expected, nominated Janet Yellen to take the place of Federal Reserve Chairman Ben Bernanke at the end of his term. Yellen, known to be a monetary stimulus dove, was embraced by the markets, believing that the latest iteration of quantitative easing – which is comprised of low interest rates and $85 billion each month in purchases of Treasuries and mortgage-backed securities – will continue, or possibly even be expanded depending on the crisis in Washington. A bit of a twist to QE tapering came into play with the release of the minutes from the last meeting of the Federal Open Market Committee, which showed that the majority of voting officials still wanted to see the asset-purchasing policy scaled back this year.
Of course, it`s notable that the meeting occurred three weeks ago, before the government shutdown happened. The FOMC meets again at the end of October.
Further, it`s reported that Republicans are proposing a deal that would avert a debt default and end the government shutdown. White House press secretary Jay Carney called the proposal “encouraging” and said that the President would likely sign a deal to temporarily raise the debt limit as long as the short-term bill was “clean.” Republicans have been fighting to pass a bill to de-fund Obamacare, a scheme that they will likely have to shelve if a bigger-picture deal is to be agreed upon as the Democrats have vowed to fight for the Affordable Care Act funding. The two political parties seemingly moving closer to striking a deal that would at least temporarily end the chaos on Capitol Hill which was cheered by the market with a roaring rally, including the Dow Jones Industrial Average on Thursday notching its biggest one-day point gain since December 2011. The S&P 500 and Nasdaq registered similar type moves.
The obvious focus to start the new week is going to stay in Washington. Earnings season will be kicking it into higher gear after Alcoa unofficially launched the latest round of earnings season last week. Point being that Alcoa topping expectations was largely ignored against the backdrop of wrangling in Washington. The US is slated to hit the debt ceiling on Thursday, so the pressures are going to be high to see a deal of some fashion struck, hopefully before the eleventh hour.
The Canadian dollar fell by the most in seven weeks against the US dollar, conceding a good portion of all the gains that it had mounted in the month prior. A drop in prices of oil, Canada`s largest export, and the stalemate in Washington that threatens to damage the economy of Canada`s largest trade partner, weighed heavy on the loonie as the greenback finally mustered some strength globally after a weak performance in the past month. Also favoring the USD was minutes from the latest FOMC meeting which showed that most central bank officials would still like to begin tapering QE3 in 2013. The ICE dollar index, which measures the USD against a basket of six world currencies, edged up by 0.29 percent. On the week, the Canadian dollar lost 0.55%, or $0.00533, meaning next week will begin with one Canadian dollar buying US$0.965975.
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Commodity Snapshot:
* Gold futures were punished last week, dropping to three-month lows as indecision early in the week kept the precious yellow metal moving sideways before talks surfaced that the government was going to get together and try to negotiate a deal to end the shutdown. Gold got some momentary support from President Obama nominating Janet Yellen as the next Fed Chairman, but optimism around continuing QE3 faded quickly in light of the bigger story surrounding the shutdown. Also weighing on gold was the IMF cutting its 2013-2014 forecasts for growth in China, one of the world’s top gold buyers. December contracts were the most actively traded for the week, dropping $41.70, or 3.18%, to $1,268.20.
* Silver futures also took a hit from Wednesday onwards related to the government possibly breaching the impasse, with discussions weighing heavily on precious metals as a safe haven asset. Further, commentary from the International Monetary Fund about downside risks for global economies pressured silver as an industrial metal. Despite a strong start to the week with a 3 percent climb on Monday, late week pressures evaporated the gains and sent silver near a two-week low.
December contracts for silver were the most actively traded, dropping by 66.8 cents, or 3.05 percent, to $21.259 per ounce.
* Copper futures have been weak ever since the government shutdown, but got some life breathed back into it with the Republicans presenting a plan to at least temporarily raise the debt ceiling.
After plunging to a three-week low on Wednesday on IMF comments that a US default would seriously damage world economies, copper rallied on Thursday and Friday to pare what could have been steep losses.
December contracts were the most actively traded on New York`s COMEX exchange during the week; slipping 3.2 cents, or 0.97%, to $3.269 per pound.
* Oil futures were pressured early in the week by lack of progress in Washington, DC, but also drew some strength later in the week on political negotiations beginning. However, crude still touched three-month lows upon reports that crude inventories surged more than three-times analyst expectations with the US EIA saying stockpiles rose by 6.8 million barrels in the week ended October 4. Oil`s best day was Thursday, when reports of the kidnapping of Libya`s prime minister hit the wires sparked concerns over a potential supply interruption in the Middle East as OPEC reported a drop in production of 390,000 barrels per day in September. The conflicting data swung oil prices back and forth during the week and was somewhat tempered by the IEA forecasting strong supply levels for 2014. November contracts for West Texas Intermediate crude were the most actively traded; dropping $0.85, or 0.83%, to $102.02 per barrel.
Equity Market Snapshot:
(All percentages on a weekly basis unless otherwise noted) * Major gold miners were a drag on the markets despite having a one-day rally on Monday. Barrick Gold (TSX:ABX, -3.99%), Yamana Gold (TSX:YRI, -5.18%), Kinross Gold (TSX:K, -2.63%), Agnico-Eagle Mines (TSX:AEM, -2.98%), Newmont Mining (TSX:NMC, -4.02%) and Goldcorp (TSX:G, -4.86%) all notched losses.
* Allied Nevada Gold (+7.93%) gained after reporting record gold production and sales in the third quarter. The company`s Hycroft mine produced 2,198 ounces of gold during the quarter.
* Major energy plays mostly rode the rally wagon even though oil prices slipped. Talisman Energy (NYSE:TLM, +0.82%), Imperial Oil Ltd.
(NYSE:IMO, +1.18%), Cenovus Energy (NYSE:CVE, +2.08%), Exxon Mobil (NYSE:XOM, +0.73%) and Canadian Natural Resources (NYSE:CNQ, +2.78%) advanced, while Suncor Energy (NYSE:SU, -0.25%) and Chevron Corp.
(NYSE:CVX, -0.39%) edged downward. XLE, the Energy Select Sector SPDR, rose 0.66 percent.
* Talisman got a boost after activist investor Carl Icahn disclosed a big stake in the oil and natural-gas producer.
* The biggest of banks in the US were mostly in the green. Citigroup (NYSE:C, +0.16%), Bank of America (NYSE:BAC, +1.00%), Wells Fargo & Co. (NYSE:WFC, +0.31%), UBS AG (NYSE:UBS, +0.39%) and Goldman Sachs Group (NYSE:GS, +2.20%) moved upward, but JPMorgan Chase (NYSE:JPM, -0.30%) eked down. XLF (NYSE:XLF, +1.30%), the financials select sector SPDR that tracks the financial stocks in the S&P 500, rose for the second straight week.
* Canada`s biggest banks outpaced their US counterparts. National Bank of Canada (TSX:NA, +0.32%), Bank of Montreal (TSX:BMO, +1.56%), Toronto-Dominion Bank (TSX:TD, +1.35%), Royal Bank of Canada (TSX:RY, +2.62%), Bank of Nova Scotia (TSX:BNS, +1.68%) and Canadian Imperial Bank of Commerce (TSX:CM, +0.85%) all added points.
* Jos. A. Bank Clothiers, Inc. (NASDAQ:JOSB, +11.48%) confirmed that it put a non-binding offer on the table to buy bigger rival The Men’s Wearhouse Inc. (NYSE:MW, +32.27%) for $2.3 billion in cash, or $48 per share. The offer price represents a 36-percent premium to Men’s Wearhouse closing price the day before the offer was made public. Men`s Wearhouse rejected the offer, saying that Jos. A. Bank was making the offer at an “opportunistic” time when the share price of MW was down and then set in place a shareholder rights plan to stop any hostile takeover attempt.
* Dow Chemical Company (NYSE:DOW, +2.70%) said that it is divesting its global polypropylene licensing and catalysts business, selling it to W.R. Grace & Co. (NYSE:GRA, -0.13%) for $500 million, as the chemical giant continues to trim its non-core businesses as part of a bigger divestment plan announced in March.
* Gilead Sciences Inc. (NASDAQ:GILD, +0.56%) reported that it is stopping a phase 3 trial of its leukemia drug because an independent data monitoring committee deemed it clear that the drug is working effectively. The monitoring committee made its recommendation based upon a predefined protocol showing “highly statistically significant efficacy” for the primary endpoint of progression-free survival in patients receiving a cocktail of idelalisib and rituximab compared to rituximab by itself.
* The tech sector got support from BlackBerry (TSX:BB, +5.96%) after Reuters reported late the prior Friday that the smartphone maker is in talks with Cisco Systems (NASDAQ:CSC), +1.13%), Google (NASDAQ:GOOG, -0.04%) and SAP AG (NYSE:SAP, +0.42%) about a possible sale. The report followed news two weeks earlier that BlackBerry`s biggest shareholder, Fairfax Financial Holdings (TSX:FFH, +3.64%), proposed to take BlackBerry private in a deal worth about $4.7 billion.
* Comcast Corp. (NASDAQ:CMCSA, +0.91%) said that it has struck a deal with Twitter to launch a new service called “See It” that will allow Comcast Xfinity users to directly access shows, DVR services and more through a Twitter post. Users will have access to a bevy of Comcast and NBC Universal (owned by Comcast) material through a new tab in a Tweet that is set to go live next month.
* Shares of Tower Group International (NASDAQ:TWGP, -41.17%) took a dive after Fitch Ratings cut the company’s issuer default rating to B from BBB.
* Shares of J.C. Penney Co. (NYSE:JCP, +1.78%) finally slowed the bleeding for four straight weeks of declines after the embattled retailer said it’s made “solid progress” on its turnaround with an improvement in same-store sales in September.
* Regency Energy Partners LP (NYSE:RGP, -9.01%) said that it is spending $5.6 billion to acquire rival natural gas pipeline operator PVR Partners LP (NYSE:PVR, +14.15%) to gain a strategic position in two prolific shale fields. The deal includes Regency assuming PVR’s net debt of $1.8 billion.
* Private-equity firm KKR & Co. LP (NYSE:KKR, +0.62%) said that it is paying approximately $1 billion to Melrose Industries PLC to acquire lifting equipment companies Crosby Group LLC and Acco Material Handling Solutions. KKR also said that it is spending 650 million ringgit (approximately US$203 million) to acquire a “substantial minority stake” in Weststar Aviation Services, a Malaysian company that provides offshore helicopter transportation services to the oil and gas industry, primarily in Southeast Asia.
* Shares of Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA, -77.34%) lost more than $2 billion in market capitalization after discussions with the Food and Drug Administration have resulted in a hold on trial enrollment for its kinase inhibiting leukemia drug Iclusig (ponatinib) because of safety concerns. 24-month follow-ups to treatment showed that patients were experiencing higher risks of blood clots and other complications.
Weekly Indices Results:
The S&P TSX Composite Index rose for the third time in four weeks, adding 133.53 points, or 1.05%, to 12,892.11. The TSX-Venture Composite Index had its worst week since mid-June, falling 25.51 points, or 2.67%, to 929.37.
In the States, the Dow Jones Industrial Average staged a massive recovery after starting the week hitting its lowest level since the third week of June, reversing course to gain 164.53 points, or 1.09%, to 15,237.11. The much-broader S&P 500 also bounced from lows; advancing 12.70 points, or 0.75%, to close at 1,703.20. The tech-rich NASDAQ Composite was actually the weakest blue chip US index even though it too sprung back from lows; declining 15.88 points, or 0.42%, to 3,791.87.
Canadian Economic Data:
* Statistics Canada said municipalities issued building permits worth $6.3 billion in August, down 21.2 percent from July. The decline follows a record month in July when permits swelled 21.4 percent from June. In August, commercial permits declined 37.9 percent to $2.43 billion from a record $3.91 billion in July. Residential permits dropped 5.4 percent to $526 million. The August contraction was much greater than the 7.4 percent pullback economists expected.
* Canada`s merchandise trade gap increased slightly in August, according to Stats Can. From July to August, exports increased 1.8 percent, but imports grew by 2.1 percent, meaning that the trade deficit increased from $1.2 billion to $1.3 billion. Exports to the US rose by 1.9 percent to $30.1 billion, nearly hitting two-year highs, while imports from the US eked up 0.1 percent to $26.1 billion, increasing the trade surplus with the US from $3.4 billion to $4.0 billion.
* Housing starts rose more than expected in September to an annualized rate of 193,600 from an upwardly revised 184,000 (up from 180,300) in August, suggesting that the housing market is not creating a drag on the economy as some thought it may. Analysts were calling for starts to edge up to an annualized rate of 185,000 for the month.
Multi-unit homes, such as condos, led the gains with a rise of 5.9 percent to 113,705 units.
* Stats Can reported that the new housing price index rose 0.1 percent in August from July, slightly below the 0.2 percent increase economists predicted. Prices in Calgary rose the most in the country, climbing 0.6 percent month-over-month. Prices in Ottawa dropped for the first time since January 1998, recording a 0.2 percent decline.
Compared to last August, the new housing price index was up by 1.8 percent.
* Canada`s unemployment rate dropped by 0.2 percentage points to 6.9 percent, its lowest level since December 2008, as the nation added 11,900 new jobs in September, outpacing the 10,000 new jobs expected by economists. Helping to lower the unemployment rate was a decline of 0.2 percent in people actively looking for work, which at 66.4 percent is the lowest level since 2002. Compared to September 2012, there was a gain of 212,000 jobs. However, there was a similar increase in working-age population, equating to little change in the unemployment rate year-over-year. In September, wages were up only 1.8 percent compared to September 2012.
This week, major economic data will include CREAstats/MLS Sales on Tuesday; the Monthly Survey of Manufacturing on Wednesday; International Transactions in Securities on Thursday; and the Consumer Price Index on Friday.
U.S. Economic Data:
* The Labor Department reported that initial jobless claims for the week ended October 5 increased by 66,000 to a seasonally adjusted 374,000, marking the highest level since March. The jump in claims was largely because of the partial government shutdown, which resulted in people filing for jobless benefits, and California still submitting increased claims that resulted from a computer system upgrade nearly a month ago. Excluding the impact of those two issues, claims would have only been 325,000. Economists have had a difficult time predicting claims recently because of these types of unusual factors, predicting claims for last week to equal only 310,000. The four-week moving average of claims rose by 20,000 to 325,000.
* Other economic data has not been released because of the government shutdown. The government has said that once the shutdown finally ends that it will take approximately three days to tally each of the reports that has not been delivered, such as September`s employment situation report. To that point, unless something gets resolved in a hurry, the reports listed below coming from government agencies will not arrive this week (except for initial jobless claims).
This week, data in the States will include the Consumer Price Index on Wednesday; and Housing Starts, Initial Jobless Claims, Industrial Production and the Philadelphia Fed Survey on Thursday.
Company Spotlight News:
In spotlight news, Fresh Start Private Management, Inc. (OTCQB:CEYY, +37.50%), a leader in alcohol treatment and rehabilitation programs, announced that the California clinic using the Fresh Start Private program has begun receiving insurance reimbursement payments from another major insurance carrier. The clinic had been receiving sporadic payments from a couple of other carriers, but this latest carrier is one of the largest in the country covering over a dozen US states and is very predominant in the state of California. This will allow for more people to be treated in those states as the company expands, which would result in exponential revenue growth in the months and years ahead.
The company also announced that the second clinic in California that will be offering the Fresh Start Program will open in mid-November. A location has been secured within a medical building located at 108 La Casa Via, Walnut Creek, CA 94598 which is right across the street from John Muir Medical Center. The lease has been signed and the clinic build-out is almost complete. The territory of Northern California was licensed to Fresh Start NoCal, LLC earlier this year and under the terms of the agreement, they will pay Fresh Start Private Management running royalties on revenue generated in the territory from all clinics that use the Fresh Start Private program. Walnut Creek is located in the San Francisco Bay Area which is home to over 7 million people. CEYY has been a volatile stock lately but overall the trend is up. With the very strong news this week, hopefully the momentum can continue for this $0.04 penny stock. For more information on this company, investors are encouraged to read the full AllPennyStocks.com write-up located here: (http://www.allpennystocks.com/aps_us/company_spotlights/archives/ceyy.asp).
————————- Forward Looking Statements This report includes forward-looking statements that reflect the mentioned companies current expectations about its future results, performance, prospects and opportunities. the mentioned companies has tried to identify these forward-looking statements by using words and phrases such as “may,” “will,” “expects,” “anticipates,” “believes,” “intends,” “estimates,” “plan,” “should,” “typical,” “preliminary,” “we are confident” or similar expressions. These forward-looking statements are based on information currently available and are subject to a number of risks, uncertainties and other factors that could cause the mentioned companies actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, without limitation, the Company`s growth expectations and ongoing funding requirements, and specifically, the Company`s growth prospects with scalable customers, and those outlined above. Other risks include the Company`s limited operating history, the Company`s history of operating losses, consumers` acceptance, the Company`s use of licensed technologies, risk of increased competition, the potential need for additional financing, the terms and conditions of any financing that is consummated, the limited trading market for the Company`s securities, the possible volatility of the Company`s stock price, the concentration of ownership, and the potential fluctuation in the Company`s operating results.
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