JMRD Market Observer for August 19th, 2016

August 19, 2016

 **August 19th Issue of The JMRD Market Observer**

 

With the dog days of summer now behind us and a few well deserved vacations still ahead, we hope that you will excuse our lean Market Observer this week. Furthermore, as it has been a heavy news and event driven summer we thought a lighter themed Market Observer would supplement your summer reading and Olympic watching.

 

In This Week’s JMRD Market Observer

  • Follow-up to the Fed Minutes
  • A Brief Market Update
  • Canadians Doing Well/But so are others!
  • What We are Reading this Summer
  • Economic Calendar
  • Earnings Report

 

 

Followup to the FED Minutes

 

Global stocks fell ahead of the release of minutes from the Federal Reserve’s July meeting Tuesday at 2pm EDT, a day after hawkish comments from two Fed officials – Dudley and Lockhart – that said the central bank could raise rates at its September policy meeting. U.S. stocks pared early losses to trade flat and the dollar weakened after the release of the minutes showed the Federal Reserve wanted to keep their options open at the July meeting, leaving the door open rate increase this year. Canada’s TSX Composite Index took direction from its U.S. counterpart. The index fell at the open on Wednesday, led by losses in energy and mining stocks as they tracked commodity prices lower. Stocks erased their earlier losses following the Fed minutes, led by a rally in the heavily weighted financials sector Fed officials were split on the economic outlook and when to raise interest rates and will need to see more economic data before pulling the trigger. Some officials wanted to wait until they were more confident inflation would rise to the Fed’s 2% objective; whereas others thought the strong labour market indicates a rate increase should be sooner. Following the minutes Fed fund futures imply traders see a 12% chance of a hike in September and a 47% chance of a hike in December compared to a 24% chance of a hike in September, and 58% chance for a hike in December before the minutes.

 

 

A Brief Market Update

Market Update

 

(Articles attached)

Dollarama Inc.

Canada – Record foreign demand for securities

 

 

Canadians Doing Well/But so are others

 

It has been hard to not notice that the TSX has performed well this year, despite a lot of “noise” in the media and a number of global events that have shaken investors. Still, despite all these potential headwinds the TSX is the best preforming index so far in 2016.

With our Canadian Athletes doing so well at the 2016 Summer Olympics it has almost been possible to forget about the volatility in the markets, almost.  As we watched Penny Oleksiak and her Canadian swimming compatriots reaching new highs it was hard not to cheer. Luckily, the excitement was not over as a few days later Derek Drouin flew over the bar in high jump capturing another Gold medal for Canada. Also, don’t forget that one of our own and the sister of a past employee, Melanie McCann, will be competing in the Modern Pentathlon this Friday. We hope you will be cheering her on like we will be!

We also have to mention that the strength of the American Olympic Team and the excitement surrounding Usain Bolt has provided for an enjoyable and competitive games as always. In fact, an analogy on diversification can easily be formed while thinking about what makes an Olympics so enjoyable. A well-diversified portfolio is greater than the sum of its parts just like the Olympics is greater than one athlete, and putting together the best investment pieces will provide for the best result for all. Stay tuned to your regular quarterly reviews for more on diversification and successful portfolio management.

 

 

What we are Reading This Summer

 

As there are not many more relaxing things to do than read enjoyable book and bask in the sun while lounging; to wrap things up, we thought we would share what’s on our reading lists this summer.

 

Paul Manders

“Living with a Seal – 31 Days Training with the Toughest Man on the Planet” – Jesse Itzler – A quick and funny read and really illustrates the power of pushing physical limits.

“The Happiness Equation” – Neal Pasricha – My wife suggested this one and I figured out why.  It says to never retire.

“Out of the Rough” – Steve Williams (Tigers Woods’ long time caddie).  A great behind the scenes look at the golf world.

“The Habit of Labor” – Stef Wertheimer – Founder of Iscar, a company purchased by Warren Buffett.  Recommended by Warren and I do what he says.

 

Zach Davidson:

“Before the Fall” – Noah Hawley-  Many terrific reviews but when Malcolm Gladwell said he stayed up until 3am to finish and was the best novel of the year, I had to read

“Being Right or Making Money” Ned Davis – Using unbiased objective rules is an important start for investors and tuning out the noise

“All The Light We Cannot See” – Anthony Doerr – Won the 2015 Pulitzer Prize for Fiction and the 2015 Andrew Carnegie Medal for Excellence in Fiction.

“Defender of the Innocent: The case of Martin Ehrengraf” – Lawrence Block- By one of my favorite writers, the witty collection of short stories of a defense attorney who never sees the inside of a courtroom despite how guilty his clients may seem.

 

Joe DiBrita:

“The Road to Little Dribbling” – Bill Bryson- One of my favorite authors. Who know a book about a walking in England could be so funny.

“Shoe Dog” -Phil Knight- This story of how Nike became one of the most recognizable brands should be an enjoyable read.

 

Faith Hatt:

“Harry Potter and the Cursed Child”- J K Rowling, Jack Thorne, John Tiffany- Much anticipated and It is going to be a smash hit I’m sure!

 

 

Economic Reports

 

Monday August 22th – Wholesale Trade Sales June

Tuesday August 23th

Wednesday August 24th –

Thursday August 25th – Average weekly earnings June, Corporate Profits Q2

Friday August 26th

 

 

Earnings Reports

 

Monday August 22th

Tuesday August 23th – Bank of Montreal (BMO)

Wednesday August 24th – Royal Bank Of Canada (RY)

Thursday August 25th – TD Bank (TD)

Friday August 26th

 

 

Have a good weekend and Go Canada!

 

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