Recapping the Trading Day

21-Jul-2010 | kate | Agriculture Banks Canadian Investing Commodities Currency FX Market Outlook Oil & Gas Stocks US Markets USA

The TSX was down as the energy sector declined with news that there was an unexpected rise in oil inventories causing oil futures to decline against the news. Meanwhile a strong day of earnings from US financial companies caused Canadian Financials to have a tough day.

On the earnings sides, several companies released numbers with good and bad results. EnCana, our largest Natural Gas producer, declined 5.7% after they reported their 2nd quarter profits that missed the expectations. Wells Fargo and Morgan Stanley both released results exceeding street expectations, resulting in Bank of Nova Scotia and BMO slipping 2.37% and 2.18% on the day. Even RIM had a bad day falling 3.26% after their biggest rival Apple announce an 18 billion dollar forecast for fourth quarter sales, 5.9% larger than the average analyst expectation.

The good news is that since earning season started on July 12th, 83% of the S&P 500 companies that have released results have beat the street estimates for profits and 65% on sales.

The Canadian dollar hit it one week high before pulling back slightly and settling at 0.954 CDN Per USD.

Meanwhile, we have a new video for alliance grain traders on out website and a new investor presentation for Ithaca, make sure you stop by and check them out.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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$8 Natural Gas on the way?

20-Apr-2010 | Reggie | Oil & Gas

30 years ago many the price of Oil was $40/barrel and many thought $100 oil was right around the corner.  One analyst argued that demand would go bust and the price would retreat down below $15.  12 years ago oil dipped below $10 and many thought low oil prices were here to stay, once again an analyst spoke up and said the price was ready to take off.  That analyst is none other than octogenarian, Henry Groppe and he is at it again.

This time Mr Groppe is calling for the price of natural gas to take off once again.  With prices having been this low for some time drilling activity has come to a near standstill while demand for the gas has increased once again.  Henry Groppe seems to base his prediction on basic supply and demand and with the new supply coming on to the market screeching to a halt while demand picks back up, prices are sure to rise once again.

On the other side of the argument, many have been arguing that new discoveries found in shale fields will go above and beyond replacing lacking production.  Over the past few years a few shale discoveries have been absolute whoppers that showed initial production in the tens of thousands of cubic feet with reserves often in the trillions.  The amount of gas in reserve is basically unheard of from traditional sources.  However, the big criticism of these is the very quick depletion rate from the shale wells.  Conventional wells typically deplete around 25% per year while shale wells deplete closer to 50% in their first year.  Mr Groppe also argues that the production coming from these wells still makes only a small proportion of the total gas production in North America.

The other side of the picture is of course the big question of weather.  A very hot summer will go a long ways to helping deplete the huge natural gas reserves as countless folk get their air conditioners running full steam.  So far the consensus seems to be for a slightly above average summer for heat.

Will this be the year that Henry Groppe is wrong, or will he continue his streak of making the right prediction?

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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Stelmach is Going Retro

12-Mar-2010 | kate | Canadian Investing Commodities Economy Government Market Outlook New Announcements Oil & Gas

Alberta Premier Ed Stelmach announced yesterday that Alberta Job market trumps the need for royalty revenue, as he announce a new oil and gas strategy that will sacrifice hundreds of millions in revenue in hopes to spur the oil patch.

Effective in January 2011, the province will reduce the maximum royalty rate from 50% to 40% conventional oil and will also reduce the rates for conventional and unconventional natural gas to 35% (currently at 50%). The Stelmach government anticipates that the cut backs will stimulate the oil patch helping to create anywhere from 8 thousand to 13 thousand jobs for the economy, but will reduce the province royalty income by nearly 785 million dollars.

The Stelmach government has determined that cutting the royalty rates are necessary for Alberta to remain competitive, in the past few years, after raising the royalties; billions of dollars in energy investments have fled the province.  “ The piece of the pie may be smaller, but we’re growing a much larger pie. It is the economic activity that makes the difference” says Stelmach. “The world has change, the realities of the energy sector have changed, and Alberta must change, too, or risk losing its competitive edge in an industry that has given us so much.” Essentially, Stelmach is moving the Alberta Royalty regime back to 2009, when they implemented the current framework.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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Suncor Sells off Natural Gas Assets

06-Jan-2010 | Reggie | Canadian Investing Commodities Oil & Gas

In an effort to cut themselves free of all their natural gas assets, Suncor announced a deal that would see them sell off their Colorado properties for nearly half a billion dollars.  Last year, Suncor made an announcement that they would attempt to sell between $2 billion and $4 billion in natural gas assets over the next year.  The selling price was a 30% discount to what natural gas assets sold for last year, but Suncor was happy to be rid of the assets anyway.

This seems to be a recurring theme as investors largely seem to be avoiding buying natural gas oriented companies despite the price appreciating fairly significantly from its low.  We recently saw the 1 month anniversary since the oil side of Encana was split off into Cenovus.  The transaction was overwhelmingly supported by shareholders who are hoping to see significant appreciation in stock value over coming months.  Other companies such as Bellatrix, mentioned in the previous blog, are attempting to shift their production away from a Gas concentration to more Oil.  Currently at a 70/30 gas to oil split, Bellatrix is hoping to have their production down to a 50/50 split by next year.

Deals such as these should truly be scene as a sign that natural gas prices are destined to struggle for the foreseeable future.  These are companies that are used to the cyclical nature usually associated with selling commodities.  They have plans and strategies in place that they use to cope with the peaks and troughs.  Seeing these companies make major shifts to their operations, or even change their whole corporate structure is a sign that the current decline in gas prices is more than the usual cycle.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

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