The Santa Claus Rally Continues...Ho Ho Ho!

The Santa Claus rally arrived right on cue, with US stock markets reaching new highs, and the 10 year US Treasury yield touching 3% for the first time in a long time. On top of that, the US dollar has just gotten stronger against many major currencies. One has to wonder how much more room is there for the market to rally in 2014, and will this rally finally run out of steam? On a local note, we have been struck with quite a storm, for all of you affected by the lengthy power outages, we hope you and your families have been able to find somewhere safe to enjoy the holidays. 2013 has seen many disasters for us: floods, power outages and the Fed hints of tapering. Let’s hope 2014 is less eventful!

The dreaded taper finally arrives…and the market approves!

By Justin Turner CIM, DMS®, CFP®

On Chairman Ben Bernanke’s final meeting, the Federal Reserve decided to finally taper their bond buying program by 10 billion, which came as a surprise to many market participants.  For many, the bigger surprise was that the market reacted positively to the news and has had a huge rally which has continued and may continue through to the New Year.  Despite fears of the potential negative implications of the Fed tapering, the fact that they decided to go ahead with it shows that the economy is most likely on its way to being able to stand on its two feet without the massive amount of liquidity currently being injected into the US economy.  Only time will tell if their decision was the correct one, but for now the market is content evidenced by all of the major US stock indices reaching new highs.

On behalf of the Orgil Wealth Management group, I want to wish our clients, friends, colleagues and readers Happy Holidays and a safe and Happy New Year.  Let’s hope 2014 brings us positive markets once again.

Is the Fed finally going to taper?

By Justin Turner CIM, DMS®, CFP®

The market seems to think so.  Stocks have pulled back over the past week with investors taking profits and perhaps heading to the sidelines to wait out the US Federal Reserve’s announcement next week.  On top of weak markets, we have also seen a rise in 10 Year rates, with the 10 Year US Treasury topping out at about 2.90%.  While still low in historic terms, it is dramatically higher than anything we have seen over the last few years, and is cause of concern in the eyes of some analysts.  In Canada, bank stocks had shown signs of life following a sell-off over the last couple of weeks, but have since continued their downward move eating heavily into 2014 YTD gains in the process.

Will the Fed bring us an early present next week or will they trigger a rare end of the year sell-off and a gloomy start to 2014?  The only sure thing is that next week will be a volatile one and not only will it set the tone for the end of the year, but it could give valuable clues as to where the market might be headed in 2014.

Disappointing Bank Earnings Slow Financial Sector Rally

By Justin Turner CIM, DMS®, CFP®

A strong multi-month rally in the Canadian financial sector was halted abruptly as the latest round of bank earnings disappointed, giving investors an excuse to take profits from a sector that has delivered superior returns in 2013.  The earnings weren't necessarily bad, but after a rally that had seen banks up over 20% year to date, expectations were higher for this batch of earnings and banks were unable to deliver.  

A number of noteworthy pieces include Bank of Montreal, National Bank and in a surprise TD Bank all raised their dividends.   TD Bank also announced a stock split for shareholders of record on January 23^rd, 2014.  Finally, Royal Bank CEO Gord Nixon announced that he would be retiring in 2014.

The TSX ended the month up a modest 0.31% and up about 8.11% year to date.  The US market has been stronger than just about any market in the world in 2013, and November was no different with the Dow Jones Industrial average returning another 3.42% bringing its year to date total to over 20%.  The Nasdaq has been even better, returning 3.57% in November, and bringing its year to date total to a whopping 34.46%.  

What will December have in store for us and will we get yet another Santa Claus rally?  We'll have to wait to find out, but if history is any indication, then we probably will and these impressive 2013 numbers will look even more impressive by year's end.

Preparing for Year End

By Yaron Orgil CIMA®, FCSI®

When we flip to the final page of the calendar, we’re often preoccupied with the holiday season and many times forget to tie up loose ends, especially regarding our finances.  With that in mind, please click the link below for our year-end checklist which includes some useful ideas and strategies.  Some of these include taking advantage of tax harvesting opportunities prior to the end of the year, maximizing your TFSA and RESP contributions, and making charitable donations. 

2013 Year-End Tax Planning Checklist

We invite you to call our office anytime to discuss in more detail.