Stockscom Report for
Publisher: Colin Alexander Editor: Ken Wilson (450-691-4617)
Subscriptions and Administration: Pierre Fichaud (toll-free:
·
Employment report for Aug:
128K jobs
Market Synopsis
It was a quiet week leading up to the holiday weekend with one exceptional piece of economic data that was released Friday morning. The August employment report stated that non-farm payrolls were higher by 128K and revisions tacked on an additional 18K jobs to the June and July reports further emphasizing that the economy may not be producing large increases in employment however it retains a perspective of growth. More importantly, these figures and those showing that wages in August only inched higher were instrumental in convincing analysts that the Fed is likely to go easy on investors by choosing not to raise interest rates when they meet Sept 20. A pause is now widely discounted in pricing ahead of the FOMC meeting although the inflation numbers will be released in the days leading up and may give the Fed governors a reason to think twice.
One notable statistic was the increase in construction employment of 17K. Despite the gains in construction, the numbers hide a definite shift in the makeup of employment in this sector. Over the past seven months, residential specialty trade contractors have shed 41K jobs while non-residential specialty trade contractors have gained 59K jobs. Evidently, this is one more statistic that supports the thesis of a sharp slowdown in the home-building industry and carries with it a decidedly negative outlook for those companies either associated to renovation or building materials.
Technically Speaking
Technically, the markets remain strong though many would be of the opinion that the sole reason for the rise in markets this week was that it is a prelude to a holiday weekend and as holidays go, they are often preceded by increases in stock prices. With summer holidays now behind us, investors and financial management firms alike return to work tomorrow and consequently there could be some continuation in the buying that we’ve seen.
Looking further into the month of September however, there is reason to believe that the rally will hit a wall of resistance and need some retracing before continuing this rally. Given the market breadth since the July lows, there is a convincing argument that could be made to predict achievement of significant gains after this period of retracement has been completed.
New Buy Recommendations (in order of preference):
US Global Invest (
New Short Sales
None.
Stock Positions to Sell/Exit:
None.
Portfolio Comments:
New stops have been added to the list while others have been modified. Those that have blanks, are being carried unstopped for now. Please see our complete list of stops in the table below.
List of Current Stock Recommendations:
Action Ratings. The following is the legend for designating immediate action
for our stock recommendations. The first is B, meaning the stock is timely
to buy but the case for doing so right here is not overwhelming. Either the
stock may have gotten ahead of itself and may be vulnerable to a retracement or
else the stock has been performing disappointingly but may simply be
regrouping. B+ and B++ indicate stocks for which there is a technical case
to buy now, with plusses adding weight according to how many there are, up
to a maximum of two. Stocks rated H are ones to hold, awaiting confirmation
to buy more or to sell. SELL, of course, means what it says. It seldom pays
to override this designation. In the case of stocks held short, the rating is S
where positions should be retained. S+ and S++ indicate stocks for which there
is a technical case to add to the positions with plusses adding weight similar
to long positions. The maximum number of plus signs is 2.
N.B. There are no longer restrictions on foreign stocks held in Canadian retirement savings accounts.
|
Date of Entry |
Name |
Symbol |
Entry Price |
Current Price |
Stop |
Action Rating |
|
08/21/06 |
Brush Engineered |
BW |
26.36 |
27.53 |
24.00 |
B
|
|
08/21/06 |
Nu Horizons Elect. |
NUHC |
13.20 |
13.94 |
12.00 |
B
|
|
07/03/06 |
Seabridge Gold |
SA |
12.11 |
14.46 |
12.00 |
B
|
Short Sales:
|
Date of Entry |
Name |
Symbol |
Entry Price |
Current Price |
Stop |
Action Rating |
|
08/21/06 |
Caterpillar |
CAT |
68.25 |
67.27 |
74.00 |
S
|
|
07/10/06 |
Getty Images Inc |
GYI |
57.60 |
45.19 |
46.50 |
S
|
|
08/13/06 |
US Steel Corp |
X |
57.08 |
59.56 |
62.00 |
S
|
New stops in BOLD
* Stop on a closing basis
** Buy if above entry price
*** Split-adjusted price