Mostly favorable economic and regulatory news helped stocks to another consecutive weekly gain. Technology stocks and the rising price of gold pushed North American stock markets to the top end of their recent trading ranges. Oracle posted strong quarterly earnings and Cisco surprised the market by announcing their first ever dividend will be paid sometime in 2011. The S&P500 had its third consecutive weekly gain rising 1 .4% helped by Info Tech (up 4.4% this week). Financials slipped in sympathy with Irish debt concerns.
In Canada, it was Gold that glittered helping to push the S&P/TSX up 0.6%. Bullion prices set all time record highs (US$1276 per ounce) as economic uncertainty and currency market intervention by Japan pushed investors in search of an alternative currency. Gold represents 11% of the S&P/TSX and propelled the index to its 5th consecutive weekly increase. Natural gas prices held steady around US$4/mmBtu, however crude slipped below US$75/bbl as the most recent Enbridge pipeline leak looked to be contained. Crude futures initially spiked as this is the pipeline that delivers Canadian crude to the important oil price settlement hub in Cushing, OK. The TSX energy sector fell 1 .0%.
The economic data this week was mostly indicative of an economy that is recovering very slowly. August retail sales were the best they have been in five months suggesting the death knell of U.S. consumer may be premature. Weekly jobless claims also fell this week to 450K; 1 0K lower than expected. On the softer side, the U.S. industrial production data for August and Canadaās July factory sales were below expectations due to slack auto export activity. The University of Michigan survey showed that consumer confidence slipped again at the beginning of September.
Speaking of death knells, Research in Motion has been hearing theirs of late. Weak product innovation, security concerns, and stiff competition from Apple and Google have turned analysts very negative on the Blackberry maker. RIM beat expectations on all fronts (sales, net income, cash flow, and guidance) with the exception of new subscriber additions. New subscribers were 10% lighter than expected. To fix that, RIM said new subscriber data would be on a need to know basis going forward. Apparently investors simply donāt need to know... RIM shares rose 4.6% this week.
