October 7, 2017

On Friday, the S&P 500 was down 0.1% and Toronto was down 0.3%.

Stock markets, especially in the U.S. have been very strong indeed this year. But I would say that Donald Trump could do something at any time that would drive markets down. It’s not a bad idea to maintain balance in portfolios and to maintain some cash to take advantage of lower prices should they occur. At the same time, getting out of the market in anticipation of declines does not seem to be viable since there are always many many more scares than actual big declines.

Costco was down 6.0% to $157.09 despite posting a strong earnings report. This stock is never cheap but it is a power house. I added modestly to my position on this dip even though my last rating was only Weak Buy at $157.  I would add more on a bigger dip such as below $150.

Penny stock Ceapro managed to hang onto its gain of Thursday and added another 2 cents or 2.9%.

Statistics Canada reported employment figures for September. I don’t pay much attention to the monthly job gains and losses since they seem to be volatile and after all are subject to statistical error including seasonal smoothing calculations. The unemployment percentage rate however is fairly stable. It would surprise a lot of people to know that at 6.2%, the unemployment rate in Canada is almost at record lows in data going back to 1976. It did get to 5.9% and around 6% for much of 2006 through 2008. But other than that it is has usually been quite a bit higher than 6.2% and was over 10% all through 1982 to 1985 inclusive, peaking at 13.1% in January 1983. (This is when the youngest boomers were entering the labour force and supposedly had it so easy!).

Alberta’s unemployment rate is 7.9% which appears to be close to the historical average. It’s far higher than the lows of under 4% that happen in boom years but also far better than the 11 and 12% rates of 1983 and 1984.

The unemployment rate in the U.S. is 4.2% which is at the very low end of rates going back to the 1970’s. These low rates confound the many people who are certain that we live in terrible times and that the America economy is broken. Many of them will simply choose not to believe the official figures.