e-mail: debbie.lewis@canaccord.com
S&P/TSX COMPOSITE 11830.60 -184.37
CRUDE OIL $70.50 -1.11
A truly ugly day in the markets yet again, as the soaring American dollar affects virtually all commodity prices negatively, the Greeks with the massive budget deficit are saved in the nick of time by a European loan (and look at the size of those budget deficits of those European countries…many of them are going to have to seriously cut expenses which means big hurts to economies with services not paid and wages that have to be lowered) and if that’s not bad enough, the Chinese are suggesting they want to slow their economic growth. It’s ugly! While we have mentioned a few times not to have anything on margin, obviously cash looks like a great place to be for the next couple of months while the world sorts yet another crisis out.
We assume the European economies will slow, North America will stay steady and Asia will just keep chugging, thankfully with their demand for oil and other commodities making that sector still a place to be. Which gets us to this:
NATURAL GAS $4.39 +0.08
The only commodity we can find up is natural gas and we go back to Henry Groppe’s comments that we seem to be dwelling on as the legendary oil and gas guy suggests we will see gas prices double in the coming while. We can’t see a single other analyst coming anywhere close to that, but gas is up today and we suggest with the bust in some of the shale plays in the U.S., gas might be the place to be. We should point out that this is not universal as Raymond James today puts out an in-depth look at natural gas and they write, “The DOE thinks year-over-year U.S. dry gas supply will grow about 0.5 Bcf/day in 2010. Consensus expectations from Wall Street are similar. We think that both the DOE and consensus
expectations for 2010 U.S. gas supply growth are not just wrong but way wrong. After looking at the recently revised EIA-914 gas supply data, gas storage trends, public company results, and thE latest drilling information, we now believe y/y domestic gas supply
will be up a whopping 6 Bcf/day by this September. For the full year, 2010 gas supply should be up over 3 Bcf/day and summerover-summer gas supply should be at nearly 4Bcf/day!” There are always two sides to the argument and they are obviously negative players on natural gas.
To us, the fact that some of the shale plays aren’t working out and they won’t see the work that many had suspected, suggests that sooner or later the environmentally preferred fuel will see higher demand and if Henry Groppe is alone yet again with his opinion, we wonder if he is not right.
SLI.V ....BREAKOUT OR BREAKDOWN ? THE PIG RAN A FEW HIGHER PRICED SYMBOLS THROUGH THE SYSTEM TONIGHT AND LO AND BEHOLD AN OL FRIEND CAME UP AS THE BIG WINNER. SOME BIG NUMBERS ALL AROUND BUT THE BIGGEST COMES TO US FROM A DETAILED VOLUME COMPARISON WE RAN. NOT ONLY HAS THIS BEEN ACCUMULATED STRONGLY OVER THE PAST FEW MONTHS, THE MONEY HAS STUCK WITH IT. SO THE PIG FEELS THAT WITH THAT VALUE OF DOLLAR CAPITAL STICKING CLOSE BY, THERE MUST BE SOMETHING "UP"........POSSIBLY THE PRICE WILL BE SOON AS WELL. NIBBLE A FEW IF YOU WANT MIGHT MAKE FOR A NICE SUMMER PROFIT.....
GPO.V...IMPATIENCE KILLS.....CERTAINLY THATS THE TERM FOR THIS CHART. A PREVIOUS PIG PICK ALSO, ITS AWAITING SAMPLING IS THE STORY THE PIG HEARS. ACCUMULATORS APPEAR TO HAVE GOTTEN A LITTLE IMPATIENT WITH THE COMPANY. FEAR NOT ! THE SCANNER SAYS ITS "IN PLAY"...FOR THOSE PLAYERS OUT THERE THIS COULD BE A GREAT RISK REWARD RATIO AS THE SCANNER SAYS SIGNIFICANT UPSIDE WITH A JOLT OF NEWSWORTHYNESS. A GOOD TRADE.....
TSX Ends Notably Lower As Commodities Lead Broad-Based Sell-Off
5/17/2010 4:54 PM ET
Canadian stocks slumped for a third session Monday as concerns about the long-term impact of the euro-zone debt crisis on the global economy outweighed continuing signs of recovery in the US. Heavyweight resource stocks were badly beaten as the greenback remained firm, and gold shares too weakened even as bullion prices resisted a fall. Banks and industrials too succumbed to selling pressure, making the decline broad-based. The S&P/TSX Composite Index closed down 201.97 points or 1.68% at 11,813.00, but well off its intra-day low of 11,695.61.
The main index has eased 382 points or just over 3% in 3 sessions, and is nearly 4% down from the 19-month high reached in late-April. Suncor Energy (SU.TO) fell 2.50% and Pacific Rubiales Energy (PRE.TO) gave in 6.12%. June crude oil settled down $1.55 at $70.06 a barrel on the New York Mercantile Exchange, after touching a five-month low of $69.27.
Among base metal stocks, Teck Resources (TCK_B.TO) eased 6.31% while Quadra Mining (QUA.TO) and FNX Mining (FNX.TO) surrendered over 9% each. The Global Gold Index shed 2.12%, with Barrick Gold (ABX.TO) down 2.57% and Kinross Gold (K.TO) down 2.91%. June gold settled up $0.30 at $1228.10 per troy ounce, after fluctuating in a tight range amid a tug-of-war between safe-haven buying and profit taking at higher levels. Bombardier (BBD_B.TO) lost 3.34% and Finning International (FTT.TO) gave in 2.93%, dragging the industrial sector down 1.67%.
In the financial sector, Scotiabank (BNS.TO) trimmed 2.66% and National Bank (NA.TO) dropped 1.60%. Canada's second biggest lender TD Bank (TD.TO) ended lower 1.92%. The bank announced plans to expand its presence in the US Southeast through the acquisition of South Carolina-based financial services firm South Financial Group, paying nearly $61 million in cash or stock for South Financial's common shares, and $130.6 million in cash to the US Treasury to buy the company's preferred stock.
News and information giant Thomson Reuters (TRI.TO), which revealed that it acquired Brazilian legal publisher Revista dos Tribunais, lost 0.90%. Aviation-training equipment and services provider CAE (CAE.TO) added 0.42%. The Montreal-based company secured a C$90 million contract from US aerospace and defense contractor Lockheed Martin, for providing maintenance training support for Canada's new fleet of 17 CC-130J Hercules transport aircraft. Copper and molybdenum miner Mercator Minerals (ML.TO), which reported a wider first-quarter loss of $11.5 million compared to $10.65 million for the year-ago period, fell 14.80%. Oilfield equipment and services provider High Arctic Energy Services (HWO.TO) surged 13.64% after reporting a first-quarter profit that doubled to C$3.8 million from the year-ago period.
In economic news from the US, results of the New York Federal Reserve's Empire State manufacturing survey for May showed that the general business conditions index fell to 19.1 in May from 31.9 in the previous month, a bigger decline compared to economists' estimate for the index to edge down to 30. However, a positive reading indicates growth in the manufacturing sector.
Results of the National Association of Homebuilders' May survey revealed that the index of home builder confidence rose for the second consecutive month, to its highest level in more than two years. The NAHB/Wells Fargo Housing Market Index rose to a reading of 22 in May from 19 in April, higher than an increase to a reading of 20 economists had expected.
Gold price keeps rising
Tuesday, 18/05/2010
The financial crisis in Greece, and the resulting uncertainty in Europe, has pushed the gold price up to more record highs. On Friday, the American price of the precious metal hit a record high of $US1250 an ounce. While it's an all-time high in US currency, the price is still around $150 below the Australian record. Surbiton Associates analyst Dr Sandra Close says when markets are turbulent, investors flock to gold. "It has intrinsic value but it's a physical thing," she says.
"It's nobody else's. They're not going to change the bank notes or something. "There's a real certainty and there's a very human aspect to it. "I think over the millennia, humans have relied on gold." One West Australian mining analyst believes the gold price will reach $1500 an ounce within the next three months. Peter Strachan says the current demand for physical gold will push prices up by around 10 per cent. "I would say that's a very doable target over the next two or three months, sort of $150 an ounce on where we are currently in Australian dollar terms, and virtually put the glasses down on that one, I would say."
WORLD CUP 2010: South Africa prepares for turn in world spotlight
By The Associated Press
Posted: Tuesday, May 18, 2010 12:43 am
JOHANNESBURG — The World Cup kicks off in South Africa in a less than a month, and what awaits hundreds of thousands of visitors is a nation of contrasts. A country once defined around the globe by its brutal, institutionalized racism will be the showpiece of Africa, the first nation on the continent to host the top tournament of the planet’s most popular sport. A region beset by poverty, crime and AIDS is hopeful that its moment of worldwide attention — from the opening game June 11 to the final on July 11 — will propel it up the ranks of global competitors in business and tourism.
“I think South Africans want to celebrate this event,” said Udesh Pillay, who oversaw research looking at what the World Cup could mean to South Africa, resulting in the book “Development and Dreams.” “They want to use it to showcase their country, its beauty, its ability, its competence.” The World Cup is a chance “to re-brand and give our country a new image,” Greg Fredericks, chief of staff for tournament organizer Danny Jordaan, told lawmakers in Johannesburg who summoned him for a month-to-go update on preparations last week. “We know that Africa is seen as a dark continent,” he said, citing stories by foreign journalists who have focused on unemployment, inequality and high crime in reporting on South Africa and the World Cup.
“I don’t think they could believe that a country here on the tip of Africa could organize an event as big as the World Cup,” Fredericks said. “This World Cup will definitely help people to change their perceptions of Africa.” Visitors will be warmly welcomed by black and white South Africans, who traditionally place great importance on showing hospitality to strangers and who have been admonished by tournament organizers to be on better than best behavior during the World Cup.
Fans will see five new stadiums and one — Johannesburg’s Soccer City — that was so completely overhauled it might as well be new. South Africa spent $1.3 billion to get 10 stadiums ready for the World Cup, while road and airport construction was speeded up for the tournament.
South Africa’s scars also will be on display.
Tourists will be wary of crime, and there’s no guarantee the country’s famously restive work force won’t use the World Cup platform to strike for more pay. The April death of a white supremacist leader, Eugene Terreblanche, focused attention on racial tensions, though police blame black farm workers they say had been involved in a wage dispute with Terreblanche. South African police have announced they had confiscated weapons and arrested suspects linked to white right-wing groups, but stressed there was no threat to the World Cup. Blacks for the most part still live in poverty, and the gap between rich and poor has only grown since 1994. The end of apartheid was also the beginning of a national experiment in building unity. Sport has been used to move the process. Recalled by last year’s Oscar-nominated film “Invictus,” black President Nelson Mandela made a statement at the 1995 rugby World Cup final by wearing the green and gold jersey of the Springboks, the country’s national rugby team many blacks associated with the most racist whites. Pillay, a researcher at South Africa’s Human Science Research Council, said the World Cup “now is the emotional glue that holds the country together.”
While soccer fans might be shocked to see beggars — black and white — outside gleaming shopping malls, South Africans are used to living in two worlds at once. Think of the legions of black maids who leave shacks without running water or electricity, boarding buses before dawn to travel into white areas to clean palatial homes. Johannesburg businessman Mandla Sibeko summed up the contrasts: “South Africa, we’re a crazy nation. “The world is going to be amazed at how hopeful and how patient South Africans are.” He began planning for the World Cup soon after South Africa won the bid in 2004. In 2008, he went into partnership with a British company that specializes in advertising at stadiums, and together won the bid to coordinate ads at the World Cup venues. The World Cup, Sibeko said, “is the moment when we stand on a platform and show the world how far we have come.”
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