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la fin, TK’s market wrap up

11/20/2020

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  • The S&P 600 is down by 0.28% & TSX20 up by 0.79% 
  • The Canadian 10-year bond up by 0.01% and the US 10-year bond down by 0.02%

The big move in copper prices can not be ignored and is usually used as an indicator of economic prosperity. This is due to how copper is fundamental to economic infrastructure and capital projects. Can this be seen as a leading indicator? Noticeably majority of the trades are from large investment firms and not corporate hedgers.

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Investors should be aware that when they invest in the small-cap industry they are exposed to more market risk; this should not be seen as a reason not to buy the common stock of these businesses but as an indication that there is great potential to make great buying choices and accumulate wealth.

The saying goes on Wall Street:

“To gain higher returns the investor should take on more calculated risk”

How true this is depending on the person asked, but most would agree. The Small Caps this week did well for their shareholders, the top gainers increased in value on average by about 102% & the “losers” lost about 19% for the day. This shows the “bullish” sentiment going into the end of the week in the Canadian market.

Economic data points

  • Personal Income MoM on Wednesday, November 25, 2020
  • Balance of Trade on Friday, December 04, 2020

Earnings

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Salesforce develops enterprise cloud computing solutions with a focus on customer relationship management worldwide.Table Description automatically generated

Salesforce earnings per share in 2019 were $1.43 per share and analysts forecast their earnings for the full fiscal year are expected to be 0.15 per share. This contraction in earnings is in line with the reduction in business spending due to the COVID pandemic. The stock has been tearing up the market and is up 55% year to date and closed today at 259 down 1.83% for the day.

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The Bank of Nova Scotia provides various banking products and services in Canada, the United States, and internationally
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Scotia’s earnings per share in 2019 were $6.68 per share and analysts forecast their earnings for the full fiscal year are expected to be 5.19 per share. This contraction in earnings is in line with the lackluster performance of the investment portfolios and the loan portfolio of the large Canadian banks due to the pandemic and economic slowdown. The stock has been lagging behind and is down 14% year to date and closed today at 63 up 0.71% for the day.


It goes without saying that analysts’ expectations are merely guesses and taking them at face value is a gambler’s game. But this information is not completely useless as it is a great indicator of where most of the securities analysts are expecting earnings to go in the foreseeable future.


The reality of the beauty contest that is the stock market is that if every stock is somebodies’ favorite, then every price should be viewed with skepticism even those that may seem like risk-free investments.

HAPPY HUNTING!

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