OPEC, Thanksgiving and Jimi Hedrix
Excuse me while I kiss the sky – Happy Birthday Jimi (born on this day in 1942, died 1970)
ON THE NEWS AGENDA TODAY
Finance Minister Joe Oliver is holding a media conference following meetings with private sector economists for pre-budget consultations; at 10 am we will hear from OPEC following their consultations in Vienna (the broad consensus is that no cut in production will be made). The President of OPEC in his opening address said there is “ample, supply, moderate demand, a stronger U.S. dollar and uncertainties about global economic growth” - nothing that would encourage enthusiasm for oil . The price is trading down to $72.30 right now. There were a number of European data points out overnight German unemployment at a record love and surprisingly strong European economic confidence number (although industrial and consumer confidence were both negative numbers). European markets are to the upside right across the region and bond markets continue to soar (with Spain the best performer) although Greek bonds under some selling pressure (a country paralyzed today by anti-austerity protests.) Finally, Doug Ford, brother of former Toronto Mayor Rob Ford, is making an announcement at 11 am which many expect to be related to a run for leadership of the provincial Ontario Conservative Party.
CORPORATE NEWS
Fairfax Financial (which is the best performing financial services stock this year) has filed a prospectus with provincial securities regulators to offer shares in Fairfax India. According to the release, this is the first time in the company’s nearly 30-year history that a new company has been sponsored and promoted by Fairfax Financial. The company is “focused purely on the potential of India and Indian businesses.”
As flagged last week by the CEO of Rio Tinto, the company is out today with itsannounced $350 million investment in expansion of the North Western Canadian Diavik Mine (60% owned by RIO with 40% owned by Dominion Diamond). In a recent interview Sam Walsh said “I love diamonds.” Production is expected to start in 2018 and the expansion is to “ensure output at Diavik continues at existing levels.” Others love diamonds too as DDC is up 20% year to date and 40% from the May lows.
Bonterra Energy (BNE) has announced the resolution of issues with Canada Revenue Agency relating to the company’s conversion to a corporation from a trust. Sticking with energy CIBC has a note out this morning highlighting energy stocks under a variety of conditions based on a reading of the technical picture. Under a “shock & awe” reversal kind of environment, the analyst focuses on high WTI correlation stocks like Cenovus, Baytex, Trican, Husky, Athabasca and others.
THE OTHER STUFF
In another energy sector, the EIA announced a 162 bcf withdrawal from storage of the recent week – above the 150 expected but well ahead of the 4 bcf average and last year’s 13 bcf last year. That’s what cold weather will do. Weather forecasts for the U.S. over the next six to ten days calls for above-average temperatures in the majority of the lower 48 states but below-average in the north according to BMO.
For those keeping track (like Howard Silverblatt at S&P Capital IQ), here are the stats on yesterday’s closing high (the 47th of the year). In 2013, there were 45 new closing highs and this year’s 47 ranks fifth historically (but there are still 23 trading days left). The all-time winner was 1995 with 77 closing highs. November (and there is one U.S. trading day left) is the best November (in terms of number of closing highs) since November 1961 – a record that could be tied if another new high is made tomorrow.
Impossible to beat the 14 new highs set in 1928. On a money basis, the market has gained $1.92 trillion in market value so far this year (total value $17.74 trillion). Appleaccounts for 11.8% of the market’s return since the stock split on June 6). The S&P is 6.57% higher since then.
And so it begins – 2015 forecasts. “There are a few out there already (isn’t that early) and here’s an FX outlook from RBC on the Canadian dollar: We have been bearish on the longer-term prospects for CAD for quite some time, and continue to be so as we look to the year ahead. Our outlook for the currency by the end of 2015 has been unchanged since the beginning of 2014 (USDCAD at 1.18), but importantly, recent developments in the commodity complex—energy in particular—have raised therisk that CAD slides beyond that forecast.” $1.18 USD/CAD equates to one Canadian dollar being valued at $0.8475. With respect to the U.S. currency, the bank is “long USD but conditionally – looking for U.S. rates to drive the next leg higher in DXY” but they note it is a crowded trade.
Finally, if you want to know what Saskatchewan thinks about the Energy East pipeline, see Mark Bunting’s interview with Brad Wall on BNN.CA. If you want to know what the CEO whisperer has been saying to some of the top money managers and corporate executives in the U.S. and how to become a money master, join us at 11 am for my interview with life coach Tony Robbins. We’ll also have an interview with Joe Oliver as he plans for the budget (what does it mean for your tax bill). We have the Morningstar domestic equity fund manager of the year, Black Friday shopping strategy “dos and don’ts as well as a thanksgiving trading strategy. There is lots to do even if the Americans are watching football and eating turkey.
Every morning Business Day Host Frances Horodelski writes a "chase note" to BNN's editorial staff listing the stories and events that will be in the spotlight that day. Click here to have it delivered to your inbox before the trading day begins.
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