Volatil­ity keeps in­vestors guess­ing

Times Colonist - - Business - ALEK­SAN­DRA SA­GAN

Ma­jor North Amer­i­can mar­kets ex­pe­ri­enced steep drops Fri­day fol­low­ing weeks of de­clines and volatil­ity.

This week is “one for the his­tory books,” said James Robert­son, se­nior port­fo­lio man­ager at Man­ulife As­set Man­age­ment. “In­tra­day volatil­ity has been so ex­treme.”

The S&P/TSX com­pos­ite in­dex re­treated 141.87 points to 14,795.13 de­spite be­ing in pos­i­tive ter­ri­tory ear­lier in the day.

The in­dex opened on pos­i­tive em­ploy­ment data, he said.

Canada’s un­em­ploy­ment rate last month was the low­est since Statis­tics Canada started mea­sur­ing com­pa­ra­ble data more than 40 years ago as the job­less rate fell to 5.6 per cent for Novem­ber, ac­cord­ing to the agency. The coun­try also added 94,100 net jobs, which is the largest monthly in­crease since March 2012.

En­ergy stocks also helped boost the in­dex early on as oil prices rose. The Jan­uary crude con­tract rose US$1.12 to US$52.61 per bar­rel.

The com­mod­ity price in­creased on news that OPEC coun­tries reached an agree­ment to re­duce global oil pro­duc­tion by 1.2 mil­lion bar­rels a day — 800,000 by OPEC coun­tries and 400,000 by Rus­sia and other nonOPEC mem­bers — for six months start­ing in Jan­uary.

The en­ergy sec­tor fin­ished the day on a pos­i­tive note, but it wasn’t enough to lift the TSX as the mar­ket tone de­te­ri­o­rated over the course of the day.

“The mar­ket al­ways gets par­tic­u­larly ner­vous in that last hour of trad­ing on a Fri­day when it’s been a weak week,” Robert­son said.

The day be­fore, the TSX closed at its low­est level in five weeks — down nearly 246 points for the day.

In New York, mar­kets also ended the day in the red. The Dow Jones in­dus­trial av­er­age plunged 558.72 points to 24,388.95. The S&P 500 in­dex shed 62.87 points to 2,633.08 while the Nas­daq com­pos­ite fell 219.01 points to 6,969.25.

Mar­kets are con­cerned about growth, trade wars and geopo­lit­i­cal risk in Europe, among other things, Robert­son said.

“The mar­kets are re­spond­ing as they typ­i­cally would when there’s a lot to worry about, which is that they’re ex­tremely un­nerved and very volatile.”

Still he ex­pects that as long as the econ­omy con­tin­ues to per­form rea­son­ably well, in­vestors will look back on this in six months as a buy­ing op­por­tu­nity.

The Fe­bru­ary gold con­tract gained US$9.00 to US$1,252.60 as the pre­cious metal is con­sid­ered by in­vestors to be a safe haven dur­ing tur­bu­lent mar­ket times.

Else­where in com­modi­ties, the Jan­uary nat­u­ral gas con­tract in­creased 16 cents to roughly US$4.49 per mmBTU and the March cop­per con­tract ad­vanced nearly two cents to about US$2.76 a pound.

Sonic sold to Arby’s par­ent for $2.3 bil­lion

OK­LA­HOMA CITY — Share­hold­ers have ap­proved the sale of drive-in burger chain Sonic to the par­ent com­pany of Arby’s in a $2.3 bil­lion US merger.

Sonic share­hold­ers rat­i­fied the pend­ing agree­ment with In­spire Brands Inc.

The com­pany’s in­vestors voted on two pro­pos­als. The first was to au­tho­rize the merger and the other was to com­pen­sate Sonic’s ex­ec­u­tive of­fi­cers in con­nec­tion with the deal. Fol­low­ing the merger, Sonic will no longer be traded pub­licly.

When Cliff Hud­son be­came CEO in 1995, the Ok­la­homa-based com­pany had 1,400 drive-ins and $880 mil­lion in sys­tem-wide sales. He’s now de­part­ing the busi­ness with 3,600 drive-ins and $4.5 bil­lion in sales.

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