J. Zechner Associates Inc.
130 Adelaide St. West, Suite 1701
P.O. Box 100, Toronto, Ontario
M5H 3P5

Main Line

(416) 867-8945

Toll Free

1 (866) 259-6482
Privacy

For privacy concerns, please contact:

Jeff Herold, Chief Privacy Officer

(416) 867-8832

E-Mail

jherold@jzechner.com
Institutional Services

For further information regarding Institutional Investment Services, please contact:

David Cohen, President

Connect on

Direct Line

(416) 867-8649

E-Mail

dcohen@jzechner.com
Private Client Services

For further information regarding Private Wealth Services, please contact:

John Zechner, Chairman

Connect on

Direct Line

(647) 501-0606

E-Mail

jzechner@jzechner.com

Summary

  • The stock market in Canada rose again in September with a monthly gain of 4.1%, pushing the 3rd quarter total return to 10.3%.  Year-to-date the Canadian market has gained 7.5%.  Foreign markets were even stronger as the S&P500 had its best September since 1939 with a monthly gain of 8.8%.
  • The Canadian bond market returned 0.6% in September bringing the year-to-date gain to 7.5%.  The strength in bonds came from a decline in long-term bond yields.
  • Commodity markets were strong again in September as base metals, oil, lumber and silver all gained more than 10%.  Gold prices moved up by 4.7% to another all-time high of US$1309 per ounce, putting its gain in 2010 to 19.4%.  
  • The Economic data in the US and Europe has softened somewhat in 2010 but remains positive.  Consumer spending has weakened again in the US but overseas industrial growth remains strong while corporate profit growth remains exceptional.
  • In terms of stock sectors, the strength in September was fairly wide spread with all ten sectors positive.  Market capitalization was a bigger differentiator last month as the TSX60 gained 3.3% but the smaller Completion Index (the Composite Index less the TSX60) was double that with a monthly return of 6.6%.
  • Our Stock Market Outlook is still extremely bullish at this point as low interest rates, steady economic growth, moderate stocks valuations and strong corporate profit growth have combined to make an extremely friendly backdrop for stocks.  Our expectation remains that economic growth is moderating but will continue to be strong enough to generate good earnings growth.  Meanwhile, the worries about growth will keep central banks from raising interest rates anytime soon.  Although sentiment indicators have improved, we still believe that the bulk of investable funds are still not back in the market, meaning a potential absence of sellers in the short-term.  Within our portfolios we have an emphasis on the Basic Materials, Energy and Technology sectors but are also looking to increase our position in Financial stocks, where we have been under weight during the recovery. (more…)