D&D Securities - blog

The Morning Boxscore: Monday, August 31, 2009

Today vs. Yesterday

US Libor – Overnight      .229 vs. 227

US Libor – (3 Mo)           .348 vs. 361

Euro Libor – Overnight   .282 vs. 269

Euro Libor – (3 Mo)        .799 vs. 796

TED Spread                    .21             –

US 10 yr Yield                 3.414         -3.00

US 2 yr Yield                   .992           -2.00

S&P                               1020.9         -6.50

OIL                                 71.07           -1.70

NATG                            3.024           -0.011

GOLD                            955.3           -3.50

VIX                                 24.76           +0.08

Baltic Dry                       2421           -4.00

Rig Counts as of Aug 21, 2009                          

US                                      999 vs. 985        

CA                                     184 vs. 164

MX                                     30 vs. 29

CDN/USD                        0.9061      -.0099

EUR/USD                        1.4276      -.0027

 As of 7:20 AM

 Investment Headlines

-          Leverage Rising on Wall Street at Fastest Pace Since ‘07 Freeze

-          German Bonds Rise for Third Week on Concern Optimism Misplaced

-          Japan’s Output Rises at Slowest Pace in Four Months

-          Yen Rises After Japan’s Opposition Party Wins General Elections

-          Baker Hughes buys BJ Services for $5.5B

-          Consumer prices in Europe declined less than economists forecast in August

-          China stocks slump most since June 2008, capping year’s first monthly loss

-          Shipping rates may drop 50% as China cuts coal imports amid fleet overrun

-          UK Home prices post first gain since 2007 on low supply

-          Fed will miss inflation target over next decade, economists say in survey

-          UK is closed for its Summer Bank Holiday

-          Chicago Purchasing Manager reading due out @ 9:45

* Source Bloomberg

D&D Securities Company

The Morning Call:  Thursday, August 27, 2009

We agree with Capital Economics that the Recession is all but over and probably ended mid year. New homes sales were an impressive 9.6% while the median price dropped 11.5% year over year. Durable goods were a little light at 4.9% but New Orders were up 18.4%, ex transportation 0.8%. Capital goods was up 9.5% and shipments up 2% from 0.7% in June. A poll of senior accountants in Canada shows they are positive on the economy. So what more can one need?

The question is: What now? Obviously, the market has priced all this into the stock market. -The Merrill survey of advisors has 51.6% bulls to 19.8 % bears.  We found this was a very good indicator while we were doing our obligatory stint at Merrill in Canada. The trader sentiment is volatile but more upbeat.  Barrons’ online headline was about converting the Bernanke Put into a Bullish Call. We’ve broken out and should pull back to test this new support. The US$ still could rattle the markets and certainly the next round of G20 rhetoric will have concerns.

However, we continue to believe that this market is driven by Funds Flow. The market has decoupled from the economy and is, as ever, driven by fear and greed. With only a third of Managers surveyed being overweight stocks, there’s a lot of performance fear out there. As far as we can see, there’s also an extra wide spread between the quartiles of performance measurement.

September and October are often bad months… Does anyone forget last year? No, and never will. It could happen again but where would you have gone to if you had sold in May and went away? Tough calls and, really, no history to act as a guide. The market is paying for taking a risk – which is the Bull’s call. The risk for them is complacency. One client put it very well yesterday saying that he’s being paid to be paranoid.

The truth will out.

Invest the money.

Quote of the Day:

“You don’t want another Enron? Here’s your law: If a company, can’t explain, in ONE SENTENCE….what it does….it’s illegal.”
Lewis Black

Ed Pennock, CFA, Managing Director
416-369-6921, epennock@dominick.ca

Graham Farrell, Institutional Equity Trading
416-369-4208, gfarrell@dominick.ca

Gordon Wright, Institutional Equity Trading

416-369-6924, gwright@dominick.ca

The above note is prepared by an Institutional Salesperson based on morning meeting comments and general Institutional desk discussion and should not be construed as a research report or a solicitation. For information purposes only. D&D Securities, its clients, and principals may have positions in these securities.

The Morning Boxscore: Thursday, August 27, 2009

Today vs. Yesterday

US Libor – Overnight      .227 vs. 227

US Libor – (3 Mo)           .361 vs. 372

Euro Libor – Overnight   .269 vs. 269

Euro Libor – (3 Mo)        .803 vs. 811

TED Spread                    .22             -0.01

US 10 yr Yield                 3.451         +2.00

US 2 yr Yield                   1.055         +1.00

S&P                               1025.2         -1.40

OIL                                 71.01           -0.42

NATG                            2.844           -0.066

GOLD                            948.2           +2.40

VIX                                 24.95           +0.03

Baltic Dry                       2427           +39.00

Rig Counts as of Aug 21, 2009                          

US                                      985 vs. 968        

CA                                     164 vs. 170

MX                                     29 vs. 30

CDN/USD                        0.9117      +.0004

EUR/USD                        1.4259      +.0004

As of 7:20 AM

Investment Headlines

-          Housing prices in UK increase at fastest pace since 2006, nationwide says

-          European retail sales drop for 15^th month as unemployment rises

-          Federal Reserve says loan disclosures will hurt banks and the US economy

-          Yen funding-cost spread widest since 1993 as Fed cash flows into the economy

-          Pessimism on US stocks declines to lowest level since 2007, survey

-          S&P is approaching 200-Month moving Average

-          Toll Brothers posts 8^th straight loss as recession saps demand for luxury homes

-          Treasuries advance before report that may show GDP shrank at faster pace

-          Royal Bank Q3 profit rises to record, reports EPS of 1.21(ex-items) vs. 93c estimate

-          Dollar risks falling through “established lows”, Goldman Sachs

-          CIBC considering acquisitions to expand outside Canada

-          Alberta’s deficit to soar to $6.88B on lower Nat Gas prices

-          US Economic Data: GDP QoQ; Personal Consumption; GDP Price Index; Initial and Continuing Jobless Claims

* Source Bloomberg