**January 29th Issue of The JMRD Market Observer**
In This Week’s JMRD Market Observer
- JMRD one of the Top 50 Advisors in Canada
- NBFM Monthly Economic Monitor – February 2016
- JMRD Insurance Corner
- JMRD Basket Corner
- Retirement Corner
- Week at a Glance
- Reads of the week
- Economic Calendar
- Earnings Reports
JMRD one of the Top 50 Advisors in Canada!
The JMRD Wealth Management Team has been named in the Top 5 of the annual Wealth Professional Magazine ranking of the Top 50 Advisors in Canada. This is the third year in a row that JMRD has been included in this Top 50 list.
The Team is pleased to share this news with you, our valued clients. This is also a great opportunity for us to tell you what this means for JMRD’s clients in terms of what you can expect from us.
Keeping you informed: Communication is a top-priority and below are ways we strive to keep you up to date:
- We continued to improve our website – www.jmrdwealth.com – here you will find back issues of the weekly Market Observer plus snippets of JMRD events and Team members out and about in the Community.
- We are working on ‘YET’ another update on the website and that will be rolled out in the first half of 2016 – as always, your feedback is appreciated.
- Electronic statements. – Year TWO is in the ‘bank’ with the e-statements and several clients signed up to receive monthly reports this way. We expect further improvements to the on-line experience in 2016.
- If you are not currently set-up for online access to your accounts please contact Faith Hatt at firstname.lastname@example.org or any one of the Admin team to get started.
- 2015 was a huge year for social media – the main reason for the focus is our industry is finally embracing this form of communication and clear guidelines are being introduced.
- “We got LinkedIn” over the past few years and are making it a larger focus in 2016
- Most of the Team can now be found on LinkedIn which is a tool to stay connected with our clients and colleagues and share updates and timely information. Please feel free to “Link up” with us!
- Twitter became a new tool for the JMRD Team and we plan on fine tuning how to use it more effectively in the coming 12 months – follow us at: @JMRDwealth
Financial Planning: We can do this for you
- The foundation of our practice is based on financial planning and giving clients peace of mind for their financial future
- We focus on offering and creating financial assessments and projections reflecting client goals and aspirations
- Have our Certified Financial Planner, Marie Blanchet build you a concise, in depth financial plan that will help you achieve your financial objectives
- All clients should have a plan of some sort and this plan needs to be reviewed and updated over time as client situations change
- All clients are set up with an annual financial review
- All clients are set up with a two year update to make sure all account information and contact information is current
- Contact Matt if interested in creating a financial assessment and discovering your current and projected financial future
Retirement Planning: We can do this also
- We work with clients on cash flow needs and analysis
- We can create retirement projections to give clients a picture into their current or future retirement
- See the ‘Retirement Corner’ in our weekly Market Observer for timely articles
- Contact Matt to explore a retirement projection and see what your retirement goals can look like
Insurance Planning: Let us know if you want to review your current insurance as well exploring new strategies
- Steve Lockner provides insurance strategy within the Team for JMRD clients
- Steve works with the financial plan to identify client needs around asset and income protection, tax minimization, and estate preservation and transfer
- Taxation changes around permanent life insurance are coming in 2017; this year is key to implementing personal and corporate strategies
- See the ‘Insurance Corner’ in our weekly Market Observer for timely articles
All of these services are available to JMRD clients and we encourage you to reach out with any comments or questions.
We want to thank all of our clients for helping the JMRD Wealth Management Team reach this milestone.
NBFM Monthly Economic Monitor – February 2016
- The global economy is set for another difficult year. Economies, particularly in emerging markets, will continue to adjust to the challenges brought by China’s rebalancing, resulting in slower growth. In the advanced world too, growth won’t be spectacular, with ongoing struggles in the Eurozone and Japan, and a likely deceleration in the US courtesy of a surging dollar. The greenback’s surge has also raised the odds of world corporate debt turning sour. The sizable amount of USD-denominated debt issued outside of the US has indeed become harder to service after the greenback’s historic surge. On a positive note, however, low oil prices will help keep inflation low, allowing central banks in most major economies to assist growth by keeping monetary policy highly stimulative. All in all, 2016 GDP growth is unlikely to be much better than last year.
- The US economy is starting to feel the brunt of the dollar’s surge. Exports are declining and that’s leading to bloated inventories and production cutbacks by factories. The persistence of USD strength had us trim our 2016 growth forecast to 2.0%. While trade will continue to act as a drag on the economy, domestic demand will again contribute thanks largely to consumers, although not to the same extent as before. Indeed, employment growth is set to moderate from the red hot pace of the last couple of years, while the benefits of low pump prices will also fade for consumers. With slower growth than it had expected and inflation capped by USD strength, the Fed won’t be in a hurry to tighten monetary policy.
- The persistence of low oil prices means the worst may not be over for Canada. Lower projections for oil prices should lead to further cuts to investment spending and hurt growth. We have accordingly downgraded our 2016 growth forecast to just 0.9%. With monetary policy becoming less effective, the federal government can play a more significant role to support the economy. However, we’ll need to see a more forceful and timely fiscal policy response in the upcoming federal budget than what was promised during the election campaign to paper over oil-induced weakness and put off the broader stall in Canadian growth we now fear. Failing an added fiscal boost, the onus for supporting growth would once again fall squarely back to the Bank of Canada.
(Full report attached)
JMRD Insurance Corner
JMRD Basket Corner
Hydro One (H) – Hydro One announced on Friday that it entered into a purchase agreement to acquire from Brookfield Infrastructure various entities that own and control Great Lakes Power Transmission LP, an Ontario regulated electricity transmission business operating along the eastern shore of Lake Superior, north and east of Sault Ste. Marie, for $222 million in cash, subject to customary adjustments, plus the assumption of approximately $151 million in outstanding indebtedness.
Also, Metro reported Q1 result this week that were considered “relatively good”. Q1/F16 EPS was $0.56, ahead of both NBF at $0.54 and consensus at $0.53; last year was $0.45 (adjusted). EBITDA margin expansion is notable given that Metro has already annualized margin benefits from its Première Moisson acquisition. Contribution from Metro’s investment in Alimentation Couche-Tard (ATD) aided results, but even without ATD, EPS growth would have been higher by 16% y/y versus 26% y/y reported.\
(Full research note attached)
TD Banks (TD) – With Canadian bank earnings season ahead and a bleak economic outlook, BNN gets perspective on the health of Canadian bank stocks with Peter Routledge, managing director, financial services research of National Bank Financial.
All-Cap Growth Basket
CGI Group (GIB.a) – CGI to Use Cash Pile on Buybacks, `Transformational’ Acquisition – Also, story attached on CGI Group after its recent breakout to new highs, following this week’s earnings release. CGI Group
U.S. Growth Basket
Facebook (FB) – Facebook traded higher by 16% on Thursday after they reported fourth-quarter earnings and revenue that handily beat estimates. Facebook’s sales rose 57% from a year earlier to $5.6 billion — the fastest growth rate since the third quarter of 2014. Mobile advertising was 80% of total advertising revenue, up from 69% in 2014’s fourth quarter. In addition, Facebook’s average revenue per user was $3.73, a 33% year-over-year increase, even as its monthly active users climbed 14% to 1.59 billion.
Lockheed Martin (LMT) – Lockheed Martin said on Tuesday it plans to start carving out its big government information technology unit to focus on the more profitable business of building military jets, helicopters, missile defense systems and munitions.
The world’s largest military contractor by revenue will combine the IT business with Leidos Holdings Inc. in a tax-driven $5 billion transaction that will give it initial control of the national security solutions specialist, as well as ammunition to pay down debt and continue its share buyback plan.
Nasdaq (NDAQ) – Nasdaq said its fourth-quarter revenue rose 3.7% with a boost from the exchange operator’s non-trading businesses, while currency impacts masked growth in its market services segment. For the three-month period ended Dec. 31, revenue increased to $536 million from $517 million a year earlier. Excluding currency impacts and acquisitions, revenue rose 5%. Analysts polled by Thomson Reuters expected revenue of $530 million. Per-share earnings, excluding certain one-time items, also beat expectations.
Week at a Glance
Full report attached.
Reads of the Week
- Musk vs. Buffett: The Billionaire Battle to Own the Sun – Warren Buffett controls Nevada’s legacy utility. Elon Musk is behind the solar company that’s upending the market. Let the fun begin.
- NBF Economic Monitor: Fed stands still, March hike unlikely: The Fed left monetary policy unchanged at its meeting today. The upper bound of the fed funds rate remains at 0.50%, and the Fed will continue reinvesting principal payments (from its holdings of agency debt and agency mortgage-backed securities) in agency mortgage-backed securities. The Fed acknowledged that economic growth slowed late last year but it was encouraged by continued improvement in the labour market. Market-based measures of inflation compensation declined further. The Fed expects inflation to remain low in the near term in part because of further declines in energy prices, but remains confident it will rise to 2% over the medium term “as the transitory effects of declines in energy and import prices dissipate and the labor market strengthens further”. The Fed also said it is closely monitoring global economic and financial developments and is “assessing their implications for the labor market and inflation, and for the balance of risks to the outlook”. The decision to stand pat on monetary policy was unanimous. Bottom line: There was no surprise in the statement. There was an acknowledgement of the risks to the US economy posed by the deterioration in global economic conditions. On the inflation front, while the Fed remains confident it will eventually hit its 2% target, it left the door open to a change of stance by saying it will carefully monitor actual and expected progress toward its inflation target. Following the statement, markets remain quite skeptical about a potential rate hike in March (just 25% probability according to the OIS). We share the market’s skepticism as far as the March meeting is concerned. Given the challenges ahead, i.e. slower growth than last year and persistence of low inflation and dollar strength, we expect no more than two rate hikes this year. (See Attached) Policy Monitor
- Mohamed El-Erian: “The Fed in a Bind” (Bloomberg)
- “Who’s afraid of cheap oil?” (The Economist) Low energy prices ought to be a shot in the arm for the economy. Think again
Monday February 1st – U.S. Personal Income/Spending
Tuesday February 2nd – None
Wednesday February 3rd – U.S Mortgage Applications
Thursday February 4th – U.S. Initial Jobless Claims
Friday February 5th – U.S. Nonfarm payrolls, Unemployment Rate; Canadian Unemployment Rate
Monday February 1st – Alphabet (Google)
Tuesday February 2nd – Exxon Mobil Corp, Pfizer, Imperial Oil Ltd, Yahoo! Inc
Wednesday February 3rd – General Motors Corp, Suncor Energy Inc.
Thursday February 4th – Philip Morris International, BCE Inc.
Friday February 5th – Moody’s Corp
Have a good weekend!