Morning Call: Tuesday, May 26, 2009
Good morning. Starting yesterday, we've added the CRB to our Boxscore. The definition is included below. We intend to offer something that is quick, relevant and has a broad reach. For Canada, the rest of the decade and beyond is going to be full of commodities and so a daily benchmark is a good idea.
As we wait for the US to open, we are awaiting a flood of data points this week, including the GDP, Consumer confidence and Home sales. Topping that off is the $110B Treasury sale, where there is a level of fear that it may fail. It’s in the interest of everyone that it does not fail. The Chinese are by far the largest holders of treasuries. And, like some hedge funds, need to keep buying to defend the price. They've got the classic export economy so they need to make sure that their #1 customer is funded up. Also if you don't want dollars, then which currency do you want? For those that say Gold, remember who has the largest stash of gold in the world.
The Chinese may get to their growth target of 8% this year. If their biggest customer, the US consumer, would get going even a little bit, it would make it some much easier. As many pundits point out about the economy, the consumer just being less bad would do the trick.
We are waiting for the BMO to report and it would look like anything over 90 cents will be good. Seeking Alpha is talking about Enbridge for safety and growth. We read about Canadians lack of an "urge to splurge".
Nuclear Tuesday
The UXprice will come tomorrow because of the yesterday’s US holiday.
Kazakhstan's KNB (used to be called KGB) arrested the President and other executives of Kazaktomprom “in connection to a large scale theft". Kazakhstan is the third largest producer of Uranium and has 20% of global reserves.
So until we know………………………………………Stay on the sidelines.
CRB CMDT INDEX (Bloomberg): The Spot Market Price Index is a measure of price movements of 22 sensitive basic commodities whose markets are presumed to be among the first to be influenced by changes in economic conditions. As such, it serves as one early indication of impending changes in business activity. The commodities used are in most cases either raw materials or products close to the initial production stage which, as a result of daily trading in fairly large volume of standardization qualities, are particularly sensitive to factors affecting current and future economic forces and conditions.
Quote of the Day:
“The genius of a good leader is to leave behind him a situation which common sense, without the grace of genius, can deal with successfully”
-Walter Lippmann
Ed Pennock, CFA, Managing Director
416-369-6921, epennock@dominick.ca
Kris Fisher, Institutional Equity Trading
416-369-6924, kfisher@dominick.ca
416-369-6921, epennock@dominick.ca
Kris Fisher, Institutional Equity Trading
416-369-6924, kfisher@dominick.ca
The above note is prepared by an Institutional Salesperson based on morning meeting comments and general Institutional desk discussion and should not be construed as a research report or a solicitation. For information purposes only. D&D Securities, its clients, and principals may have positions in these securities.
