Stocks Rebound To Start February On Right Foot
allpennystocks Newsletter
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http://ymlp311.net/z2MuSf ——————————————————————————– February 9, 2014 Week In Review…
Week In Review For February 3 to February 7, 2014 Spotlight Companies Mentioned This Week:
* Brazil Minerals, Inc. (OTCQB:BMIX) This week on AllPennyStocks.com:
* Article Published, February 4, 2014: InSite Earns One Million Dollar Milestone Payment from Besivance Sales (http://www.allpennystocks.com/aps_us/special-reports/425/InSite-Earns-One-Million-Dollar-Milestone-Payment-from-Besivance-Sales.htm) (U.S. Company) * Article Published, February 5, 2014: Questor Technologies Buys ClearPower Systems (http://www.allpennystocks.com/aps_ca/special-reports/403/Questor-Technologies-Buys-ClearPower-Systems.htm) (CDN Company) * Article Published, February 7, 2014: Contract Barrage Continues by CES Synergies (http://www.allpennystocks.com/aps_us/special-reports/426/Contract-Barrage-Continues-by-CES-Synergies.htm) (U.S. Company) Video charts for the week:
* February 7th Technical Video Chart For DRRX.The Durect Corporation chart has been in a strong uptrend since last June. The chart is consolidating from at recent high in January of $2.29, but bounced off a support level at $1.80 this week, giving hints that it could be ready for the next move upward. view: ( http://www.youtube.com/watchv=usCBrEFlIDE ) * February 7th Technical Video Chart For STE:CA.The Santonia Energy chart is a bottom play that has inched above a new support level at $1.17 on the back of two straight green closes. The pps faces some immediate resistance around $1.25, but a break above that should clear the way to try and move towards more resistance at $1.40.
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_________________________________________________________________ WEEKLY UPDATE – STOCKS REBOUND TO START FEBRUARY ON RIGHT FOOT Stocks in North America started the week selling-off, including a plunge of more than 320 points by the Dow Jones Industrial Average to continue a steep slide that saw the Dow lose more than 1,000 points in nine trading days. Soft auto sales in the US and manufacturing data from the Institute for Supply Management showing that factory activity expanded at its slowest pace since last May sparked concerns over growth in the world`s biggest economy. From a technical perspective, the Dow fell to a four-month low and below its 200 day moving average for the first time since December 28, 2012. The CBOE Volatility Index, so-called the “fear” index, spiked to over 21, it`s highest level since last June. Long-story-short, negativity was spiraling through the markets on Monday.
Oh, but how things can change in a matter of a few days. Equities stopped the fall to eke upward the next two days ahead of the much anticipated jobs reports coming from both the US and Canada on Friday.
As the Dow had lost about 7.5 percent from its record high at the end of December, traders turned to the idea that the “correction,” usually defined as a retracement in the area of 10 percent, was essentially completed. Optimism for a good jobs report from the US grew as ADP released a report showing a strengthening labor market in January compared to December and a report from the Labor Department showed first-time filings for jobless benefits decreased a week earlier.
Sprinkle in a few good earnings reports and the bullish sentiment was starting to kick into gear as investors shrugged off widening trade deficits and the fact that the ADP report still actually showed the slowest job growth since August.
As some more upbeat earnings reports were delivered, jitters about the economy calmed. About 350 of the S&P 500 companies have now reported earnings from the latest quarter, with about 69 percent topping Wall Street expectations. That`s better than the historic rate of 63 percent compiled since 1994 and even above the 67-percent rate for the past four quarters.
As job reports arrived Friday morning, there was at first a deep groan across Wall Street as January was another weak month for new jobs and December`s tepid report barely got an upward revision. Canadians, on the other hand, received a solid report to abruptly reverse course from a terrible month of December. After initially sinking in pre-market activity, investors parsed through the US data to filter out the bad headline figure and focus on the guts of the report that showed strength in construction, manufacturing and mining jobs, industries that should have been weak given the bitter cold and inclement weather that rolled across North America in January.
Further, the unemployment rate in the US declined to its lowest level in five years and not because more people gave up looking for work this past month as had been the pattern in recent months. With those rose-colored glasses on, the markets stormed ahead to finish erasing losses from earlier in the week and post a solid gain.
Investors are also considering how the economic data will impact the US Federal Reserve and its plans to continue to reduce its monthly purchases of Treasuries and mortgage-backed securities that are aimed to stimulate the economy. In January, the asset purchases were cut from $85 billion per month to $75 billion and again trimmed in February to $65 billion. The general consensus amongst analysts is that the Fed will stay its course in tapering, even against the backdrop of soft data, as long as expansion is still being shown. With the markets climbing, most took these cues to look at the positive, rather than the negative.
Outside of North America, manufacturing data from Europe added to global optimism. Factories in the euro zone had their best month in January since June 2011 as new orders came pouring in to boost activity and promote hiring. China was a soft spot in Asia, but surrounding countries booked orders at a quicker pace, according to reports.
After getting routed in January and the first trading day of February, the Dow mounted a serious comeback, fueled by its best day of the year on Thursday. This perhaps could be the market tone that will carry-through the first quarter of the year as the markets grapple with central banks in emerging economies making moves to stabilize their respective currencies and the US Federal Reserve cutting-back on its monetary stimulus package. While key pieces of economic data were less than expected last week, they still showed modest growth in the US, which ultimately is what the markets want to see. This coming week will be void of market moving reports early in the week and the bulk of companies have reported earnings. That said, there will be few drivers other than the momentum from Thursday and Friday, so only time will tell how this somewhat fickle market is going to proceed ahead of key reports on retail sales and factory activity late in the week.
The Canadian dollar rebounded some after posting its worst month against the US dollar in more than 40 years in January. The loonie, as the Canadian dollar is often called, has gained against the greenback in seven straight sessions, albeit tiny gains on many occasions. The Canadian currency drew strength from the Ivey PMI shooting ahead in January and a much better than expected Labour Force survey in January that showed the country adding jobs after shedding nearly 46,000 in December. Although trade deficits in both the US and Canada were wider than expected and the US jobs report was worse than predicted, traders took focus on the positive and took to riskier currencies, as shown by the ICE Dollar Index, which measures the USD against a basket of six global currencies, declining by 0.78% for the past five days. On the week, the Canadian dollar added 0.89%, or $0.007975, against the USD, meaning next week will begin with one Canadian dollar buying US$0.906425.
Commodity Snapshot:
* Gold futures trickled lower to start the week, but put together three straight green closes to notch gains for the week to keep slowly rising in 2014 after losing 28 percent of its value in 2013. Soft economic data helped gold as investors began to more seriously wonder about how the mixed bag of reports on the health of the US economy this year will impact the Federal Reserve`s decision to maintain its tapering of economic stimulus each month. Following the January jobs report, gold shot up above $1,270 per ounce, but gave back about half of the day`s gains, suggesting that investors don`t think that the weak report will have much of an impact on the main bank`s future decisions. April contracts were the most actively traded for the week, advancing $23.10, or 1.86%, per ounce to $1,262.90.
* Silver futures have struggled compared to their higher priced cousin so far this year, but put together a much better last five days than gold, including hitting a two-week high on Wednesday before paring the gains. Silver has fallen out of flavor recently because manufacturing data globally has been somewhat soft, so the white metal has lost its luster for its industrial uses. Further, as a hedge against inflation as a precious metal, the Fed`s efforts to reduce stimulus has minimized the appeal for silver and kept it hovering between $19 and $20 per ounce for more than two months. March contracts for silver were the most actively traded, rising 81 cents, or 4.27 percent, to $19.936 per ounce.
* Copper futures fell on Monday to start the week by hitting their lowest level since December 4, meaning that the industrial red metal was down by more than 6 percent already this year at that point.
Rising prices in three out of the next four days, recuperated part of the losses to help copper post its first winning week of 2014. The increased appetite was primarily attributed to stockpiles declining and Chinese investors returning to work following the Lunar New Year holiday. March contracts were the most actively traded on New York`s COMEX exchange during the week; rising by 3.9 cents, or 1.22%, to $3.236 per pound.
* Oil futures inched ahead mid-week before exploding on Friday by more than 2 percent, including a brief rise over $100 per barrel for the first time since December 30. Traders took a risk-on approach for crude as it drew strength from rising equities and rising heating oil prices. Oil prices were also supported by investors looking passed the headline numbers of the non-farms payroll report to instead focus on underlying data that suggested there is strength in the American economy. Crude initially dropped to around $97 a barrel following the jobs report, but then surged shortly after to close at its highest level since December 27. February contracts for West Texas Intermediate Crude were the most actively traded; rising $2.39, or 2.45%, to $99.88 per barrel.
Equity Market Snapshot:
(All percentages on a weekly basis unless otherwise noted) * Major gold miners were mostly in the green last week. Goldcorp (TSX:G, +1.62%), Kinross Gold (TSX:K, +4.31%), Newmont Mining (TSX:NMC, +0.04%) and Agnico-Eagle Mines (TSX:AEM, +2.91%) notched gains, although Yamana Gold (TSX:YRI, -3.07%) and Barrick Gold (TSX:ABX, -2.70%) ended in negative territory.
* Major energy plays found a bit of strength after going mostly unloved for over a month by investors. Suncor Energy (NYSE:SU, even) had a flat week, but Canadian Natural Resources (NYSE:CNQ, +4.64%), Imperial Oil Ltd. (NYSE:IMO, 1.74%), Chevron Corp. (NYSE:CVX, +0.38%) and Cenovus Energy (NYSE:CVE, +1.49%) advanced, while Exxon Mobil (NYSE:XOM, -1.02%) and Talisman Energy (NYSE:TLM, -1.58%) slipped lower. XLE, the Energy Select Sector SPDR, moved up 0.79 percent to put an end to a five-week losing streak.
* Exxon, who not long ago was swinging back and forth with Apple (NASDAQ:AAPL, +4.43%) as the most valuable US company, fell into third place this week behind search engine behemoth Google (NASDAQ:GOOG, -0.30%).
* Husky Energy (TSX:HSE, -0.51%) has approved a $300-million equipment upgrade at its refinery in Lima, Ohio, which will allow the company to process up to 40,000 barrels per day of heavy crude from Western Canada, starting in 2017.
* Baytex Energy (TSX:BTE, -2.31%) said that it is expanding its operations into the Eagle Ford oil shale basin in Texas by agreeing to acquire Perth, Australia-based Aurora Oil & Gas Ltd. (TSX:AEF, +53.38%) for $2.6 billion. The deal will give Baytex control of an additional 9,000 contiguous acres in the prolific oil region.
* The biggest of banks in the US helped the US markets climb.
JPMorgan Chase (NYSE:JPM, +2.28%), Bank of America (NYSE:BAC, +0.42%), Wells Fargo & Co. (NYSE:WFC, +0.74%), UBS AG (NYSE:UBS, +3.98%) and Citigroup (NYSE:C, +4.03%) all moved upward, although Goldman Sachs Group (NYSE:GS, -1.33%) faded down. XLF (NYSE:XLF, +1.09%), the financial select sector SPDR that tracks the financial stocks in the S&P 500, extinguished a three-week fire sale on bank plays.
* Canada`s biggest banks were boosting the Toronto Composite.
Toronto-Dominion Bank (TSX:TD, +0.87%), Bank of Montreal (TSX:BMO, +1.82%), Royal Bank of Canada (TSX:RY, +1.70%), National Bank of Canada (TSX:NA, +1.65%), Canadian Imperial Bank of Commerce (TSX:CM, +1.02%) and Bank of Nova Scotia (TSX:BNS, +0.98%) all tacked on points.
* Telecom giant BCE (TSX:BCE, -0.38%) posted adjusted net earnings of $540 million or 70 cents a share in the fourth quarter, beating estimates by a penny. The company also raised its dividend 6 percent to $2.47 a year.
* Shares of Green Mountain Coffee Roasters (NASDAQ:GMCR, +33.02%) shot ahead after news hit that Coca-Cola (NYSE:KO, +0.34%) bought a 10 percent stake for $1.25 billion. Coke said that it is going to help with the launch of Green Mountain`s new cold drink machine, called the Keurig Cold System, which is expected to be released later this year or early in 2015.
* Valeant Pharmaceuticals International (TSX:VRX, +0.82%) is maintaining its aggressive acquisition pace, saying last week that it agreed to acquire PreCision Dermatology, which makes a range of medical products treating a number of topical diseases such as acne and atopic dermatitis. Per the agreement, Valeant will pay $475 million in cash plus an additional $25 million if a sales-based milestone is reached.
* Microsoft (NASDAQ:MSFT, -3.38%) named Satya Nadella to be its new CEO, replacing Steve Ballmer. Nadella, who has led the company`s rapidly growing cloud software division, is part of a plan to help Microsoft become a bigger player in the always expanding cloud industry.
* Sony (NYSE:SNE, +6.79%) had its best week since early in November upon announcing a series of major changes, including selling its money-losing Vaio PC division, spinning out its television business and cutting 5,000 jobs. The shakeup overshadowed the company saying that it will likely lose $1 billion this year.
* Canadian National Railways (TSX:CNR, +1.76%) reached a tentative agreement with the union representing 3,000 workers of its employees, including conductors and yard workers, following the union serving CNR with an intent to strike notice. Details of the deal have not yet been released.
* Shares of Twitter (NYSE:TWTR, -15.74%) performed a nosedive following the social media company disclosing its first earnings report as a public company. Shares originally plunged more than 25% to eliminate about $9.8 billion in valuation as net loss widened to $511.5 million in the fourth quarter from $8.7 million in the year prior quarter.
* Jos. A. Bank Clothiers (NASDAQ:JOSB, -5.53%) is reportedly in discussions to buy fellow clothing retailer Eddie Bauer, adding a new wrinkle to the storyline of Jos. A. Bank and Men`s Wearhouse (NYSE:MW, -4.18%) trying to buy each other.
* Michael Kors (NYSE:KORS, +17.88%) surged to an all-time high after once again raising its outlook for the year. The upscale fashion retailer said it now expects profits in the range of $3.07 to $3.09 on revenue of $3.18 billion to $3.19 billion. Michael Kors had previously guided earnings in between $2.77 and $2.81 per share on sales of $2.9 billion to $3.0 billion.
* CVS Caremark (NYSE:CVS, -1.89%) announced that it will no longer sell tobacco products, starting October 1, a health-conscious move that will cost the pharmacy about $2 billion annually in sales.
* Automakers reported their US sales for January, which showed that total auto sales fell by 2.1 percent compared to January 2013, with bone-chilling cold weather commonly blamed for the decline. Ford (NYSE:F, +0.07%) reported a drop of 7.1 percent. General Motors (NYSE:GM, +0.08%) said sales slumped 11.9 percent and Toyota (NYSE:TM, +%) reported a 7.2-percent fall in sales.
* Bombardier (TSX:BBD.B, +3.98%) rose for the second straight week after the British government said that it plans to award the transportation giant a $1.6-billion contract to supply trains and a depot for London`s transportation system.
Weekly Indices Results:
The S&P TSX Composite Index snapped a two-week down streak, stepping up 91.56 points, or 0.67%, to 13,786.50. The TSX-Venture Composite Index followed the lead of its bigger brethren, climbing 10.82 points, or 1.14%, to 962.50.
In the States, the Dow Jones Industrial Average staged a big recover to end up in the green, advancing 95.23 points, or 0.61%, to 15,794.08. The much-broader S&P 500 ended a three-week skid; rising 14.43 points, or 0.81%, to close at 1,797.02. The tech-rich NASDAQ Composite completed the green sweep in North America; tacking on 21.98 points, or 0.54%, to 4,125.86.
Canadian Economic Data:
* Statistics Canada said that the Industrial Product Price Index rose 0.7% in December, after advancing 0.2% in November. The rise of the index in December was the fourth in six months and the strongest since February 2013. Of the 21 major commodity groups, 13 were up, 6 were down and 2 were unchanged. The rise in the IPPI was mainly a result of higher prices for energy and petroleum products (+2.0%), which posted the first increase since August 2013 and paced by a 5.0% gain in diesel fuel compared with November. The IPPI rose 1.4% in the 12-month period ending in December, after increasing 0.3% in November.
* Stats Can said that the Raw Materials Price Index rose 1.9% in December, after three consecutive monthly declines. Of the six major commodity groups, three were up, two were down and one was unchanged.
The rise in the RMPI was mainly attributable to crude energy products (+3.3%), which posted its first increase since August 2013 and was led by a 3.6% hike in conventional crude oil. The RMPI excluding crude energy products rose 0.3% in December. The RMPI rose 2.1% during the 12-month period ending in December, after falling 2.6% in November.
* The total value of building permits issued by Canadian municipalities declined 4.1% to $6.5 billion in December, following a 6.6% decrease in November, according to the nation`s number-crunchers.
Lower construction intentions for commercial buildings and multi-family dwellings in Ontario and British Columbia were responsible for much of the decrease at the national level in December. The total value of building permits for 2013 edged down 0.1% from 2012 to $80.8 billion. The total value of permits in the residential sector fell for a second consecutive month, down 9.3% to $3.7 billion in December and the lowest level since March 2013.
* The nation`s trade deficit with the rest of the world widened to $1.7 billion in December from $1.5 billion n November as imports increased by 1.2 percent to $41.4 billion and exports only expanded by 0.9 percent to $39.7 billion. Exports to the U.S., Canada`s largest trade partner, rose by 1.2 percent to $30.0 billion, while imports from the U.S. declined by 0.4 percent to $27.1 billion, equating to a trade surplus of $2.9 billion in December, following a $2.4 billion trade surplus in November.
* The Ivey Purchasing Managers Index rose to a three-month high of 56.8 in January from 46.3 in December, a sign that business activity picked-back up in Canada. Readings above 50 indicate expansion and below signal contraction. Analysts were expecting a reading of 51.0 for the month. In January 2013, the Ivey PMI stood at 58.9. A soft spot in the report was the employment index, which registered a 45.1 reading, indicating that more businesses were losing employees than were gaining.
* The monthly Labour Force Survey showed that employment rose by 29,000 in January, the result of an increase in full-time work and that the unemployment rate declined 0.2 percentage points to 7.0%.
Economists expected an increase, but only 20,000 jobs. Employment increased in transportation and warehousing (+15,000), while it declined in business, building and other support services (-25,000) as well as public administration (-16,000). Employment increased in Prince Edward Island (+1,000), while it fell in New Brunswick (-2,400) and was little changed in the other provinces. Over the past 12 months, employment increased 0.8% or 146,000 and the number of hours worked rose 0.7%.
This week, major economic data will include Housing Starts on Monday; New Housing Price Index on Thursday; and the Monthly Survey of Manufacturing on Friday.
U.S. Economic Data:
* Cold and snowy weather was blamed for the Institute for Supply Management`s Manufacturing Index declining at its weakest pace in eight months during January. The index slid from 56.5 in December to 51.3 in January, missing even the bleakest of economists forecasts.
On the bright side, the measure of factory activity was still above 50, a level that indicates expansion in the industry, while readings below signal contraction. The New Orders sub index paced the declines as it plummeted from 64.4 in December to 51.2 last month, marking its largest one-month fall since December 1980.
* The Commerce Department reported that the U.S. trade deficit widened by 12 percent to $38.7 billion in December from $34.6 billion in November. Economists expected the deficit to expand to $36.0 billion. Petroleum exports again hit a record high, but overall exports declined by 1.8 percent to $191.3 billion. Imports, on the other hand, rose by 0.3 percent to $230.0 billion as imports of consumer goods hit a record high. For all of 2013, the trade deficit was $471.5 billion, the smallest gap since 2009.
* The Labor Department said that initial jobless claims declined to 331,000 in the week ended February 1 from a revised 351,000 the week prior. Economists were expecting a fall to 335,000 claims. The four-week moving average, a less volatile measure of jobless trends, eked up by 250 to 334,000.
* The Labor Department also reported that the U.S. added only 113,000 new jobs during the month of January, the second straight month of poor jobs growth in the country. Economists were predicting 180,000 new job additions. December`s terrible growth of 74,000 was upwardly revised by only 1,000 to 75,000 new jobs. The shining point of the Employment Situation report was that the participation rate – the number of people with a job or actively seeking employment – inched up from roughly 30-year lows from 62.8% to 63.0%. Coupled with the tepid job additions, the unemployment rate dropped to a post-recession low of 6.6% from 6.7% in December.
This week, data in the States will include Initial Jobless Claims and Retail Sales on Thursday and Industrial Production on Friday.
AllPennyStocks.com Corporate Spotlight News:
Our latest corporate spotlight, Brazil Minerals, Inc. (OTCQB:BMIX), a diversified Brazilian mining company with revenues from sales of both polished and rough diamonds, as well as gold, and ownership interests in projects in gold, titanium, vanadium and iron was on a rollercoaster ride this week trading as high as $0.103 and as low as $0.0765, to end the week, the stock looks to be stabilizing around the $0.09 level.
The company announced that because of interest in its projects from the region, it has added an advisor with business presence in Beijing, Hong Kong, and Shanghai, and is in the process of finalizing an agreement for a representational office for BMIX in Beijing. BMIX has been building business relationships in China, including Chinese entrepreneurs that have access to China`s international mining sector, both in private-owned and state-owned enterprises. China is the number one trading partner of Brazil, having surpassed the U.S. in 2008. To read more about BMIX, investors are encouraged to read the full AllPennyStocks.com profile on the company located here: (http://www.allpennystocks.com/aps_us/company_spotlights/archives/bmix.asp).
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