Stocks Sputter Ahead of FOMC Meeting
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http://ymlp294.net/zrD8OF ——————————————————————————– December 15, 2013 Week In Review…
Week In Review For Dec. 9 to Dec. 13, 2013 This week on AllPennyStocks.com:
* Article Published, December 9, 2013: Senseco Releases Optimistic Data from Third Cohort in Blood Cancer Clinical Trial (http://www.allpennystocks.com/aps_us/special-reports/413/Senseco-Releases-Optimistic-Data-from-Third-Cohort-in-Blood-Cancer-Clinical-Trial.htm) (US Company) * Article Published, December 10, 2013: LX Ventures and Mobio Announce Kim Kardashian as Newest Mobio INsider Social Media Influencer (http://www.allpennystocks.com/aps_us/special-reports/414/LX-Ventures-and-Mobio-Announce-Kim-Kardashian-as-Newest-Mobio-INsider-Social-Media-Influencer.htm) (CDN/US Companies) * Article Published, December 13, 2013: PokerTek and Las Vegas From Home Strike Licensing Agreement for Gaming Platform (http://www.allpennystocks.com/aps_us/special-reports/415/PokerTek-and-Las-Vegas-From-Home-Strike-Licensing-Agreement-for-Gaming-Platform.htm)(US/CDN Companies) Video charts for the week:
* December 12th Technical Video Chart For IVAN.The Ivanhoe Energy chart has steadily fallen across the past three months and is setting up a “pincher play” formation that can often signal a reversal for the chart. Support at 36 cents is holding as the indicators are giving early signs of a bounce for the pps. view:
( http://www.youtube.com/watchv=e54zP5rrobA ) * December 12th Technical Video Chart For CS:CA.The Capstone Mining chart has been making a strong move since July. The chart is holding over the 50 day moving average and trying to break out of a channel that could see the stock may a new 52-week high above $2.94.Click here to view: ( http://www.youtube.com/watchv_T_bS7wQE ) Featured Link: Try the AllPennyStocks.com Pro newsletter / member area free for 30 days. Members receive exclusive penny stock picks with specific buy / sell calls, monthly commodity and indices analysis allowing you to be the first to know what direction the markets will be heading as well as special reports and unrestricted access to the “Penny Stock of the Day” feature offering daily trading ideas for technical traders and ad-free viewing of AllPennyStocks.com. Take advantage of our limited-time pricing, and flexible monthly, six month and one year payment options. We pick the winners, you make the money! Click here: ( http://www.allpennystocks.com/allpennypro/ ) to view a sample stock pick and start your free 30 day trial.
WEEKLY UPDATE – STOCKS SPUTTER AHEAD OF FOMC MEETING Stocks in North America turned lower again last week with investors banking gains from previous months ahead of a key meeting of the US Federal Reserve this week. Followers of the stock market know that this is not a big shock as the central bank`s stimulus package has been without a doubt the largest market driver in 2013. All five major indexes that we track lost more than 1 percent as the Dow Jones Industrial Average and the S&P 500 continued to retreat from record highs hit two weeks earlier. The resource-heavy Canadian markets, which generally track US equities, saw some heavy volatility in commodities last week. This volatility took the TSX Composite to its lowest level since October 18 and the smaller Venture Exchange down to its lowest mark since July 11.
Economic data was relatively scant last week, so the markets were left to move almost exclusively on speculation about what the Federal Reserve will do at its meeting this coming Tuesday and Wednesday. The Fed has been buying $85 billion each month in Treasuries and mortgage-backed securities in an effort to stimulate the economy, lower the unemployment rate and bring inflation up near its two-percent target. While the stimulus has been largely attributed to gains in the stock market, inflation has remained muted and the labor market, while improving, is doing so at a slow pace. The consensus is that the Fed is going to start slowing its asset purchases in the near future, perhaps as early as next week, a move that the markets aren`t convinced that the economy can handle, lending to the recent volatility in stocks.
Investors have also been fretting over incessant bickering in Washington, DC over a US budget and debt ceiling. Lawmakers stuck a deal in October that provided a short-term budget and raised the debt ceiling until early in 2014, but with December winding down, worries over another impasse and potentially another government shutdown (as happened in October) happening again were becoming amplified. A bipartisan budget deal was released late Tuesday, which added another arrow in the quiver of those hawkish on tapering and served as a driver for the market suffering its worst losses in more than a month on Wednesday. The agreement establishes spending levels for the next two years and changes some automatic budget cuts and serves as a starting point for some compromise in Washington, but it does little to cut into the nation`s $17-trillion debt. Still, though, another shutdown was a concern of the Federal Reserve and with that threat diminished the likelihood of a tapering sooner, rather than later appears certain.
Perhaps prepping the markets for taper news, Fed officials voiced their opinions again last week on scaling-back of asset purchases.
Dallas Fed President Richard Fisher backed the idea of reigning-in asset purchases as soon as possible. Richmond Fed President Jeffrey Lacker said that the Fed will discuss minimizing purchases this week.
St. Louis Fed President James Bullard saying he is in favor of a taper to start this month.
Outside of North America, retail sales were flat in China in November, but still climbed 13.7 percent from a year earlier, up from the 13.3 percent rise in October. Industrial output for the nation matched expectations with a 10 percent rise in November, following a 10.3-percent climb in October. The nation posted its largest trade surplus in nearly five years in November, increasing to $33.8 billion as exports jumped almost 13 percent compared to November 2012 suggesting that economies are improving globally. On the other side of the coin, Chinese leaders concluded their annual economic work conference, saying that the country still faces significant downward pressure and must be aggressive in reforms meant to reinvigorate their slowing economy. China had previously cut its growth forecast for 2013 from 8 percent to 7.5 percent. No guidance was given if a new revision is forthcoming, but another cut will cause investors to lose confidence in China`s growth initiatives.
All in all, the week was somewhat blunted by a dearth of economic data and a limited number of global happenings, leaving the markets to postulate on what the Federal Reserve is going to do. Although arguments can be made to continue or start tapering, there is a growing choir of voices that simply wish a decision would be made so the markets can return to some semblance of normalcy built upon economic activity and corporate earnings. Economic reports increase next week, but the clear market driver will be some concrete commentary from the FOMC on what it intends to do with its stimulus plan. Look for caution ahead of a sharp reaction Wednesday afternoon when the Fed concludes its two-day meeting.
The Canadian dollar broke a four-week losing streak against the US dollar last week, although it remains trading near three-year lows versus the greenback. Traders were cautious of the USD ahead of the upcoming meeting of the FOMC as the threat of the US Federal Reserve slowing its stimulus package is viewed as a weight on global markets.
Comments from central bank leaders, including Bank of Canada`s Stephen Poloz saying that interest rates aren`t going to change for a while and Australia`s central bank governor Glenn Stevens saying that he prefers a weaker Australian dollar to lower interest rates, added some modest strength to the USD in conjunction with the idea of Fed tapering QE3. The loonie, as the CDN dollar is often called, surprisingly found some strength despite net shorts on the loonie versus the USD reaching their highest level since early May and oil prices, Canada`s largest export, losing value during the week. In reality, the gain seemed more a matter of a little short covering as the USD was generally weaker against world currencies, rather than strength in the CDN dollar. The ICE Dollar Index, which measures the USD against six major world currencies, slid 0.08% last week, dropping for the fifth straight week. On the week, the Canadian dollar shed 0.14%, or $0.001345, to the USD, meaning next week will begin with one Canadian dollar buying US$0.939845.
Commodity Snapshot:
* Gold futures went through a topsy-turvy week, edging higher on Monday, then surging 2 percent ahead on Tuesday to close at a three-week high only to slip some on Wednesday when the US budget deal dulled gold`s luster and then nosedived by $32 per ounce on Thursday on (big surprise) worries that the Fed will scale-back tapering next week. Better-than-expected retail sales data in the States put the odds of the Fed starting tapering at their highest level on Thursday as traders attributed worse-than-expected jobs data as a product of seasonal volatility. A technical bounce from the previous two-day sell-off coupled with soft manufacturing data on Friday helped gold rebound almost 1 percent to salvage the week for a slight gain.
February contracts were the most actively traded for the week, rising $5.60, or 0.46%, per ounce to $1,234.60.
* Silver futures also started the week with strong gains, including a rise of more than 3 percent on Tuesday before plunging with gold on Thursday to minimize the advance for the week. Jim Rogers, regarded by many as a commodities guru, said in a radio interview that he`s not buying gold or silver, but if he had to pick, he likes silver better because it has dropped in value more than gold. JP Morgan Cazenove left their 2014 and 2015 price targets for silver unchanged ($21.38 and $22), but lowered their gold forecasts slightly for the upcoming years, a move that is supportive of Roger`s view for the precious metals. March contracts for silver were the most actively traded, edging up 8.1 cents, or 0.41 percent, to $19.604 per ounce.
* Copper futures made a new six-week high on the back of six straight daily gains as traders started covering shorts when copper prices broke above their 200 day moving average, a technical sign of bullishness. The decline in the US Producer Price Index on Friday was oddly supportive of copper as it was viewed that it may give the Fed a reason to re-think tapering this month. China, the world`s largest copper consumer, was also a catalyst with tight supply against a backdrop of a steadily improving economy. Additionally, improving demand for financing in China helped boost appetite for the red metal as it is commonly used as collateral in financing deals. March contracts were the most actively traded on New York`s COMEX exchange during the week; advancing 6.35 cents, or 1.95%, to $3.312 per pound.
* Oil futures pulled back after storming ahead nearly 6 percent a week earlier. Inventory overload once again was a driver, but in gasoline, not crude oil, as the US Energy Information Administration reported a rise in gasoline inventories that was nearly three times larger than expected. Also weighing on oil prices were reports from the International Energy Agency that said Iran`s oil exports are starting to rebound following the agreement with the West to reduce sanctions in exchange for the country modifying their nuclear initiatives. On the bright side, many analysts aren`t convinced that increased production in Iran or three new ports opening in Libya are going to have much of an impact on supply. The IEA also noted that it expects oil demand to remain strong next year as production disruptions will remain persistent. The January contracts for West Texas Intermediate Crude were the most actively traded; fading $1.05, or 1.08%, to $96.60 per barrel.
Equity Market Snapshot:
(All percentages on a weekly basis unless otherwise noted) * Major gold miners were mostly ahead with the rise in bullion.
Barrick Gold (TSX:ABX, +8.42%), Yamana Gold (TSX:YRI, +1.43%), Kinross Gold (TSX:K, +1.04%), Agnico-Eagle Mines (TSX:AEM, +3.03%) and Newmont Mining (TSX:NMC, +1.31%) climbed, while Goldcorp (TSX:G, -0.58%) dropped lower.
* Iamgold Corp (TSX:IMG, -11.44%) disappointed in saying that it is immediately suspending its dividend citing the need to preserve cash as gold prices continue to fall.
* Also in the mining space, Joy Global Inc. (NYSE:JOY, -4.38%) moved lower after the company, which makes mining equipment, posted an 87-percent plunge in fourth-quarter profit. Adjusted earnings fell 47% to $1.11 a share from a year earlier as sales dipped lower.
* Major energy plays struggled to find traction. Canadian Natural Resources (NYSE:CNQ, +1.61%),and Suncor Energy (NYSE:SU, +0.63%) moved ahead, but Imperial Oil Ltd. (NYSE:IMO, -2.53%), Exxon Mobil (NYSE:XOM, -0.36%), Cenovus Energy (NYSE:CVE, -2.83%), Talisman Energy (NYSE:TLM, -0.76%) and Chevron Corp. (NYSE:CVX, -1.95%) moved lower.
XLE, the Energy Select Sector SPDR, shaved off 1.48 percent for its third consecutive red week.
* Equal Energy Ltd. (TSX:EQU, -1.22%) reported entering into a definitive agreement to be acquired by Petroflow Energy Corporation and Petroflow Canada Acquisition Corp. for $5.43 a share in a deal worth about $230 million. Heading into the week, shares were already above the proposal price.
* Also in the energy field, Encana Corp. (TSX:ECA, -5.22%) said it intends to raise production of natural gas liquids by 30 percent in 2014 as it concentrates spending on five resources in North America.
The company has been making moves to save cash, including cutting 20 percent of its staff, lowering its dividend and spinning out part of its company.
* The biggest of banks in the US were mostly lower. Bank stocks fell under pressure after federal regulators approved the Volcker Rule (part of the 2010 D0dd-Frank financial reform law), which tightens restrictions on trading by federally-insured banks. Goldman Sachs Group (NYSE:GS, +0.71%) and JPMorgan Chase (NYSE:JPM, +0.20%) inched ahead. Wells Fargo & Co. (NYSE:WFC, -0.85%), Citigroup (NYSE:C, -1.01%), Bank of America (NYSE:BAC, -2.44%) and UBS AG (NYSE:UBS, -2.87%) moved downward. XLF (NYSE:XLF, -1.22%), the financials select sector SPDR that tracks the financial stocks in the S&P 500, dropped for the third straight week.
* Canada`s biggest banks were also weak. National Bank of Canada (TSX:NA, -1.24%), Bank of Montreal (TSX:BMO, -2.65%), Toronto-Dominion Bank (TSX:TD, -0.85%), Royal Bank of Canada (TSX:RY, -1.19%), Bank of Nova Scotia (TSX:BNS, -1.63%) and Canadian Imperial Bank of Commerce (TSX:CM, -1.71%) all lost points.
* American Airlines Group Inc. (NASDAQ:AAL, +9.52%) began trading as a new company after the $18-billion merger with American Airlines was finally completed. The company said that it inked agreements with Bombardier Inc. (TSX:BBD.B, -3.74%) to purchase 30 CRJ900 NexGen airplanes with an option for 40 more. The contract is worth up to $3.38 billion if all the options are exercised. American also agreed to buy 60 E175 airplanes from Bombardier rival Embraer S/A (NYSE:ERJ, +4.78%) with an option for 90 more in a deal that could be worth up to more than $6 billion.
* Air Canada (TSX:AC.B, -5.42%) was also in the buying mood, agreeing to purchase 61 Boeing (NYSE:BA, -1.00%) 737s as it replaces its older Airbus and Embraer narrow body aircraft in a deal worth about $6.5 billion U.S. With options, the agreement could expand to up to 109 new planes being purchased.
* Chorus Aviation (TSX:CHR.B, +7.30%), which flies most of Air Canada`s regional flights in North America, said that it has increased its dividend by 50 percent to 11.25 cents per share after winning its arbitration case with Air Canada.
* MasterCard Inc. (NYSE:MA, +3.89%) ended its chances of joining the rare group of companies trading in excess of $1,000 per share after approving a 10-for-1 forward stock split. The company also authorized a new share repurchase plan for up to $3.5 billion of its Class A common stock and raised its quarterly dividend by 83 percent to $1.10 per share.
* Shares of CytRx Corp. (NASDAQ:CYTR, +127.89%) skyrocketed after the company announced positive interim data from a Phase 2b clinical trial that showed patients taking its aldoorubicin drug have far better outcomes than patients receiving doxorubicin, an approved cancer drug commonly used today.
* Shares of BlackBerry Ltd. (NASDAQ:BBRY, +3.40%) recovered from all-time lows despite getting a downgrade from Citigroup to a “sell” rating. Blackberry will be in focus this week as it reports earnings from the latest quarter. Separately, BlackBerry announced that Rocky Mountain Human Services have selected the company`s Enterprise Service 10 platform and Z10 smartphones for employees.
* Element Financial Corporation (TSX:EFN, -1.71%) announced that it has signed a definitive agreement with a subsidiary of GE Capital in the US to acquire a portfolio of finance assets secured by individual helicopters operated by a diversified base of customers across a variety of industries for a purchase price of approximately $245 million. The acquired portfolio of assets consists of 59 individual helicopters operated by more than a dozen customers in various commercial lift applications including oil and gas resource development and medevac services.
* Shares of Scripps Networks Interactive (NYSE:SNI, +9.11%) got a lift after it was reported that Discovery Communications Inc.
(NASDAQ:DISCA, -3.07%) is considering putting in an offer to buy the company.
* Medical testing services provider Laboratory Corp. (NYSE:LH, -10.87%) shares sank after the company released a 2014 profit outlook that fell short of Wall Street’s expectations. In part, the company blamed uncertainty related to Obamacare, the name given to the revamping of the US healthcare system, that other medical testing services are also attributing for weak outlooks next year.
* Sysco (NYSE:SYY, +5.74%) had shares initially soar more than 16 percent after saying it plans to buy rival US Foods in a deal with $3.5 billion, merging the two biggest food distributors in the US.
* Canadian utility Fortis (TSX:FTS, -4.11%) reported that it is acquiring UNS Energy Corp. (NYSE:UNS, +23.56%), a provider of electricity and natural gas to more than 650,000 customers in Arizona for $2.5 billion as well as assuming $1.8 billion in UNS debt.
Weekly Indices Results:
The S&P TSX Composite Index dropped for the fourth straight week, losing 155.02 points, or 1.17%, to 13,125.70. The TSX-Venture Composite Index fell for the fifth time in six weeks, unloading 22.18 points, or 2.42%, to 894.47.
In the States, the Dow Jones Industrial Average slid for the second straight week, giving up another 264.84 points, or 1.65%, to 15,755.36. The much-broader S&P 500 matched the losses; declining by 29.77 points, or 1.65%, to close at 1,775.32. The tech-rich NASDAQ Composite was nearly as weak; subtracting 61.54 points, or 1.51%, to 4,000.98.
Canadian Economic Data:
* Canada Mortgage and Housing Corp said that the seasonally adjusted rate of housing starts slowed in November to 192,235 units from a slightly downwardly revised 198,161 in October (originally estimated at 198,282). Analysts were expecting an annual rate of 195,000 for November. Although slightly lower than expected, the markets have remained resilient, suggesting that the nation`s housing market is headed for a soft landing, not the crash-like bubble pop that many expected.
* Statistics Canada reported that the price of a new house in Canada increased by 0.1 percent in October compared to September, in line with expectations. The index does not include prices for condominiums. On a year-over-year basis, prices were up 1.5 percent, the slowest rate of increase since February 2010. Calgary paced the gainers with a 6.1-percent jump in prices, as the combined Oshawa/Toronto region saw prices climb 1.5 percent, the slowest annual increase since March 2010.
This week, major economic data will include Canada`s International Transactions in Securities and CREAstats/MLS sales on Monday; the Monthly Survey of Manufacturing on Tuesday; Wholesale Trade on Wednesday; Employment Insurance on Thursday; and Retail Trade and the Consumer Price Index on Friday.
U.S. Economic Data:
* The Labor Department reported that first-time filings for jobless benefits swelled to a two-month high amid volatility related to the holiday season in the week ended December 7. Initial jobless claims climbed to 368,000 from an upwardly revised 300,000 the week prior (originally estimated at 298,000). Economists expected a rise in claims to 325,000. The four-week moving average, regarded as a better measure of the labor market because it eliminates weekly volatility, climbed 6,000 to 328,750. Figures tend to bounce around a lot in December and the beginning of January because holidays fall on different days each year, making it difficult for number crunchers to make seasonal adjustments.
* The Commerce Department said that retail sales rose by 0.7 percent in November, topping expectations of a 0.6-percent gain. These figures included Black Friday, one of the busiest shopping days of the year, but did not include Cyber Monday (another crazy busy day) because it fell on December 2. High-dollar items performed especially well, with car sales posting a 1.8-percent gain. The rise in sales bodes well for fourth quarter GDP, according to some economists, but others express caution over the fact that big-ticket items are selling, but lower-cost items, such as clothing, food and services, are lagging behind.
* The Labor Department said that the Producer Price Index for finished goods, which measure prices paid to factories, refineries and farms, declined by a seasonally adjusted 0.1 percent from October against economist calls for a flat month. Energy prices led the decline with a drop of 0.4 percent month-over-month, following a 1.5-percent drop the month earlier. In October, the PPI contracted by 0.2 percent and in September it fell by 0.1 percent after registering four straight months of gains.
This week, data in the States will include the Consumer Price Index on Tuesday; Housing Starts and the FOMC Meeting Announcement on Wednesday; Initial Jobless Claims, the Philadelphia Fed Survey and Existing Homes Sales on Thursday; and Gross Domestic Product on Friday.
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