Money Sense

[Anonymous]

Dow posts best week since March as traders shake off G-7 trade jitters.



For the week, the Dow advanced 2.8%, its biggest weekly gain since March. The S&P gained 1.6% and the Nasdaq rose 1.2%. Both posted their third straight weekly gain.



Investors have been wise to not trade on trade talk and drama; we're in a war of words, but not a trade war. If that persists, then I'm not inclined to adjust our GDP or earnings estimates. Next week could be a different story, as investors digest both the entirety of the G-7 summit and the ECB meeting.



The TSX ended the week higher as well closing at 16,202.69. Oil ended the week lower with WTI at $65.56.

[Anonymous]

U.S. stock benchmarks ended near session lows Wednesday as the Federal Reserve completed its second increase to benchmark interest rates in 2018, as expected, but signaled a slightly more aggressive plan to tighten monetary policy this year than had previously been projected.



The rate increase also had the effect of narrowing a closely watched gap between rates of two-year and 10-year Treasury notes, which has recently been one of a strong predictor of recessions.



The Dow Jones Industrial Average DJIA, +0.11% slumped 119.53 points, or 0.5%, to 25,201.20.

[Anonymous]

Facebook stock drops roughly 20%, loses $120 billion in value after warning that revenue growth will take a hit



On Thursday, Facebook FB, -18.96%  lost about $120 billion in market capitalization, after its earnings report after the market close on Wednesday missed expectations on revenue and showed slowing user growth. Weak guidance also rattled investors.



The stock closed down 19% Thursday to $176.26, which means that investors erased the entirety of the company's 2018 gains. Its market capitalization as of Wednesday: $630 billion. By the end of trading Thursday, it was worth $510 billion after close and 170 million shares had changed hands. Facebook's Thursday was the ugliest single-session decline since the company went public in 2012.



Facebook stock had recovered from a decline earlier this year in the wake of the Cambridge Analytica scandal, one of several controversies and warning signs that the company had managed to weather with little damage to its stock. But declining revenue and user growth, topped by a warning from executives that it will continue, seemed to end that run.

[Chuck Bronson]

Facebook had made some massive mistakes, so I'm not surprised...



Used to be when one browsed Facebook, posts would appear linearly, in the order that your 'friends' had posted them.  There was no algorithm in place to restrict these posts, to 'jumble' them up, or to 'hide' them.



It was a fairly simple and straight forward approach, not unlike how these forums work.



Then they wanted you to see what they wanted you to see...  Want to see more?  'Make' some new 'friends'...  Wonder why that post from your 'friend' doesn't appear anymore?  Don't think about that...  Just keep posting, and let our algorithms work our magic.



It's a turnoff for me, although I still do log on from time to time.  Nonetheless, I do not like, nor care for, any interference by any 'higher power.'  Not on this forum, and not on Facebook.



Luckily they are one stock that I do not own...  I already have a couple of stinker holdings, and don't need any more!

[Anonymous]

It was Twitter's turn today. Twitter's stock closed 20.5% on Friday after the company announced it lost 1 million active users. More user loss is predicted.

[Anonymous]

It was Twitter's turn today. Twitter's stock closed 20.5% on Friday after the company announced it lost 1 million active users. More user loss is predicted.

Oh my goodness..



I don't use Twitter, but it seems to be the main social media platform for news disemination or should I say disinformation.

[Anonymous]

Stocks fell, but finished off their session lows, to close the week as financial instability overseas raised anxieties about the disruption spreading to these shores. At the end of the day, the Dow Jones Industrial Average dropped 196 points; the NASDAQ declined 53 points; and the S&P 500 slipped 20 points. The broader market reflected the weakness in the major averages, as the number of declining issues outpaced gainers by nearly two to one on the New York Stock Exchange.



Turkey was at the center of the storm today, as its currency fell sharply and its bond yields skyrocketed. The Turkish lira had already faltered badly in recent months on fears that high inflation would not be properly addressed by monetary policy. Making the situation worse over the last day or so was the failure of talks between the United States and Turkey over the release of a political prisoner.



While Turkey in and of itself only represents a small portion of the global economy, the concern is that its difficulties are becoming symptomatic of other emerging markets. The strong, and rising, U.S. dollar is raising the specter of past unsettling currency moves.



The TSX ended the day down 90.47 points to close at 16, 326.41. West Texas Intermediate was up $1.05 US to close at $67.75.

[Chuck Bronson]

I had some Newalta shares, which recently were changed to Tervita, as they merged.  When this merge happened, I was also issued a small amount of Tervita Trust Warrants.



Now here's the interesting thing with these trust warrants...  They've gone up 63% in a matter of days, which was quite surprising to me.  I know trust warrants can be risky, so I just bought about $1,000 worth of them.  This should be good enough to get me in the game, without causing me too much grief should shit go south...

[Chuck Bronson]

This share went up 55% today.  Maybe I should've thrown more than just a grand into this holding.

[Anonymous]

The TSX closed 29 points higher today to close at 16,356.05. Pot stocks were the leaders.



In New York, the Dow closed 133.37 points higher to close at 25,790.35. The Nasdaq added 67.52 points, or 0.9 percent, to 7,945.98. Its previous all-time high was set on July 25. The S&P 500 index gained 17.71 points, or 0.6 percent, to 2,874.69. It has now finished with a weekly gain in seven out of the last eight weeks.



Benchmark U.S. crude gained 1.3 percent to settle at $68.72 per barrel.



The CDN dollar was up slightly to  close at .76749 US.

[Anonymous]

The Dow close the week up at 26,154.67

The Nasdaq at 8,010.04

Gold at $1,198.30

West Texas Intermediate was $68.98

The Canadian  dollar was $.7673

[Anonymous]

According to Tim Shufelt Trump's trade war proves costly for investors, except in the United States. This is exactly what I have said what would happen. The US is winning the global investment race.

[Anonymous]

All North American indices performed well today on news of the new USMCA deal. WTI oil closed up over two dollars barrel at $75.52 mostly because of Iran sanctions.

[Anonymous]

I have  beenrather skeptical of mary jane stocks.



The pot stock boom is about to bust

October 17 may be the beginning of the end for high-flying cannabis stocks





It's going to be an exciting month for pot smokers, cannabis companies and government tax collectors, but one group should temper their legalization day expectations: Canadian investors.



As everyone knows by now, pot stocks have soared over the last few years. The Marijuana Index, an index that tracks the shares of several cannabis companies, is up by about 573% since October 2015. That's been great for people who bought into the sector back then, but it's a problem for those who are thinking about getting in now or continue to hold stocks today.



Until now, most of the sector's gains have been driven by expectation – people think the cannabis industry is going to be huge, much like how people in 1999 were betting on an Internet boom. Unfortunately, there's going to be a lot of disappointed folks when, on October 17, the promise of pot becomes a reefer reality.



Sky high expectations

Whether the cannabis industry is going to be massive is not in question. Grand View Research estimates the legal marijuana industry will be worth $164 billion by 2025. What's problematic for investors is that it will still be years before these operations see any meaningful results.



Canada may be the first major country to legalize weed, but no company would bet their business on serving the Great White North alone. Statistics Canada expects $1 billion worth of legal marijuana to be sold in the fourth quarter this year, which is a fraction of the global sales potential. And, at this point, export potential is nearly non-existent.



Scott Willis, head of research at Grizzle, a cannabis-focused investment analysis firm, thinks that Canadian sales estimates are also too optimistic. He says people will continue buying their goods on the black market for at least another year. Why? Because dealers deliver, their product will be less expensive than what's sold in stores and with edibles still illegal until later in 2019, users still need their own supplier to access certain goods. "The black market already has this stuff and will deliver the same day," says Willis.





Then there's basic supply and demand fundamentals. For companies to make money – and not one is turning a profit – they must get this balance exactly right, which will be impossible to do in an industry that doesn't yet exist. It's lose-lose for producers, says Willis. If they don't ramp up production fast enough and can't make as much as planned, then earnings will fall. If they grow too much and demand isn't as great, then there will be oversupply and earnings will drop, too. "Everyone's promising that it will go perfectly," he says.



A cannabis crash

This wouldn't be such an issue if pot stocks were trading at reasonable valuations. Willis points out that booze companies are trading at about 10 times 2019's enterprise value-to-EBITDA, while tobacco operations are trading at 14 times 2019 EV-to-EBITDA. Cannabis companies, which he says should trade in line with other sin sectors, have a 2020 EV-to-EBITDA of between 20 and 45 times.



While these stocks could continue to climb higher in the days after legalization, they will eventually fall – by about 60%, he says, which is what has happened in the past. "The government has set expectations of what they think demand will be in the first three months," says Willis. "They'll then put out a press release in January saying what demand really was and if that misses, which is pretty likely, all the stocks will tank. People will be worried that the market isn't converting to legal as fast as they thought."



Once these stocks drop, it could take years before they rise again. After legalization investors will be – or should be – focused more on fundamentals than expectation and the fundamentals don't look so hot right now. Producers won't start turning a profit until at least the end of 2019, says Willis, and most need to find a way to get their cost of production down. The ones that can't will go out of business. As well, like other commodity industries, supply and demand must get in balance. Valuations, which have become so stretched, will overshoot on the downside.



All that said, if you're thinking about getting into this sector to ride the legalization wave, then you're too late. "If you see a stock going up 100% in one month probably then you probably don't want to be buying it," says Willis. "A lot of those gains have been realized."



While there is long-term potential, investors should wait at least a year before even considering buying into the sector. It's important to see how the industry evolves, how the demand picture looks, what other countries plan to legalize – this is key because, again, Canada can't be the only market – and how quickly people go from dealer to dispensary.



Wait until valuations drop to at least that 20 times level, says, but lower is even better. "It's going to be harder for expectations to be exceeded," says Willis, "but easy for people to be disappointed."

https://www.moneysense.ca/save/the-pot-stock-boom-is-about-to-bust/">https://www.moneysense.ca/save/the-pot- ... t-to-bust/">https://www.moneysense.ca/save/the-pot-stock-boom-is-about-to-bust/

[Anonymous]

Another strong year for Canada's second largest railway.



CALGARY - Canadian Pacific Railway Ltd. is raising its full-year financial guidance following what it called a record-setting third quarter and a strong outlook for the remainder of the year.



The railway says it now expects its adjusted earnings per share to grow by more than 20 per cent for the year, compared with earlier guidance for low-double digit growth.



In its preliminary third-quarter results, the company estimates revenue grew by 19 per cent to a record high of about $1.9 billion.



CP also expects its reported diluted earnings per share to be about $4.35 for the third quarter, while adjusted diluted earnings per share are expected to be about $4.10 — the highest in the company's history.



According to Thomson Reuters Eikon, analysts on average had expected CP to earn $3.64 per share in the quarter.



The railway's operating ratio for the quarter — a key measure of efficiency where a lower number is better — is expected to be under 58.5 per cent.