Mark Leibovit: Bulletin

Posted by Mark Leibovit - VRTrade Platinum Newsletter Clip

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The markets are trading sideways to lower, awaiting Fed Chairman Bernanke’s Jackson Hole speech on Friday. Asian stocks today closed mostly lower: Japan +0.40%, Hong Kong -0.12%, China -1.05%, Taiwan +0.40%, Australia -0.07%, Singapore +0.05%, South Korea +0.65%, India -0.80%, Turkey +0.14%.


Bearish factors for stock market include high expectations from Bernanke and Draghi, Japan’s downgrade of its economy and the sharp 5.3 point drop to 60.6 in the Aug U.S. consumer confidence index from the Conference Board, which was much weaker than market expectations for a 0.1 point increase to 66.0. Slightly on the flip side the 8 point rise in the Richmond Fed index was roughly in line with market expectations and the June Case-Shiller Composite-20 home price index rose +0.9%, which was stronger than market expectations of +0.5%.

I wrote this morning:

“September is normally a bad month for the market, but selling does not have to begin September 1. It could begin now or September 15. Why tempt fate? Are you counting on a Bernanke bailout of the stock market? Are you considering Israel has pushed against the wall by a less than friendly Barack Hussein Obama? Are you ignoring that Spain, Italy, Portugal, Ireland and possibly France may be the next dominoes to fall in an imploding European financial system? Are you considering the fact that volume has dried up on in the U.S. markets and most of trading is by professionals and not the public with the public looking elsewhere away from the banksters, thieves and vermin that control Wall Street who in turn have the regulators under their thumb?”

(Ed Note: To find out how Mark is trading this scenario Mark offers a VRTrader Trial Offer  HERE. Mark also offers  his Annual Forecast Model @ for a 50% discount to those who call 928-282-1275 or email HERE. For the VRGoldLetter there is also a Trial Period HERE


Less than a week after Bank of Canada governor Mark Carney lambasted corporate Canada for sitting idly on its cash, data have emerged that suggest Canadian companies experienced one of their worst quarters for profit – the financial engine that allows businesses to generate a financial war chest – since the recession.

Corporate earnings fell 4.9% in the second quarter to $71.9-billion, according to data released Tuesday by Statistics Canada, a signal that many firms may have had at least some justification for wanting to behave in a miserly fashion.

Canadian companies have been posting record profits since the recession wore off in 2009 and a good portion of that haul has been cautiously diverted to cash reserves as managers look to add a layer of cushioning against a shaky global economy.

But last week, Mr. Carney lashed out at the penny pinching, saying companies need to deploy their hoarded capital to help the domestic economy – or give it to shareholders to do that for them.

Tuesday’s data show that a hoarding mentality may be justified, said Leslie Preston, economist with Toronto-Dominion Bank.

“Canadian corporations have seen their profit growth slow over the past year and in that kind of environment, without it being clear when things are going to get better, it’s perfectly understandable for corporations to be building up cash reserves as a cushion,” she said.

TORONTO – A new Labour Day survey suggests Canadians are more optimistic this year about their job security as well as hiring and growth prospects at their companies – and many expect a raise.

The Bank of Montreal poll finds nearly two-thirds, or 64%, of respondents are comfortable with their job security.

The survey suggests 41% believe their company is growing and will be hiring.

Both measures are up 13 percentage points from the number of employees who expressed confidence last Labour Day.

And 39% expect a promotion or raise this year, up 11 percentage points from last year.

The results come despite lingering economic uncertainty, a still high unemployment rate and a disappointing report showing the economy shed jobs in July.

The Canadian economy shed a surprisingly steep 30,400 jobs last month, which pushed the unemployment rate up a tenth of a point to 7.3%. It was the first major hit in nearly a year for what had been a mostly positive employment record.

And the economy has been growing at a rate below 2% since last fall.

But Canadian workers are relatively well-off compared to their American and European counterparts, as the Canadian unemployment rate is one percentage point lower than in the U.S. and four percentage points lower than in the eurozone, said BMO senior economist Sal Guatieri.

“Canadian job security is fairly good, with our 7.3% unemployment rate below historic norms,” he said.

“Canadians should expect wages to rise modestly faster than inflation, supporting household purchasing power, with the strongest gains in Alberta and Saskatchewan,” added Guatieri.

Meanwhile, 22% of respondents to the BMO survey said they expect their company will be downsizing and laying off employees, while 24% expressed concern about their job security.

Another one-in-five said they felt they were working in a “dead-end” job, indicating that their company would not be in a position to dole out promotions, raises or bonuses.

By region, respondents in Alberta were most optimistic, with 60% feeling their employer will hire this year.

Atlantic Canadians were most likely to believe their company would lay off employees, with 28% expressing that sentiment.

The survey was completed online from July 31 to Aug. 3 by Pollara Strategic Insights, with a sample of 1,000 Canadians. A probability sample of the same size would yield a margin of error of plus or minus 3.1% 19 times out of 20.

Earlier this week, a survey report by global business consultancy Mercer suggested non-union workers across Canada can expect wage increases of 3.2% on average next year.

The projected wage increases would match actual increases in base pay reported for 2012. They would also be up slightly from the average of 3% in 2011 and 2.9% in 2010.

Earlier this week, Finance Minister Jim Flaherty became the latest official to call on Canadian businesses to invest some $525 billion of dead cash back into the economy.

Last week, Bank of Canada governor Mark Carney told Canadian companies that are holding on to piles of cash because of global economic instability to give it back to their shareholders.

The bank governor was responding to a question about a previously released Canadian Labour Congress study that suggests Canadian businesses are sitting on some $500 billion in cash assets.

And Prime Minister Stephen Harper has said, on a global scale, there is “money sitting on the sidelines” that can revive the world economy.