Start soon enough and you won’t have to catch up
The chase by Frances Horodelski:

If you start soon enough, you won’t have to catch up.

Today will be one of catch-up for the TSX given the strong showing in U.S. markets yesterday. For example, TD, Royal Bank and Manulife were up 0.73%, 1% and 0.4%, respectively in New York trade yesterday and the S&P 500 was up 0.67% so watch for some fireworks at the open. Around the world, there is virtually no red with all markets higher as are the futures. Note that fertilizer stocks were lower yesterday however on the USDA report which could provide some pressure on that segment at the open (Potash Corp. was down 0.4% yesterday).

According to Howard Silverblatt at S&P Capital IQ, the market has made 23 new highs this year, with eight in the last month. His work shows that 60.8% of the time, we set another new closing high after we set the first one. The S&P 500 first crossed 1,000 in 1998 – 14 years later, will it cross 2,000? The Dow crossed 1,000 for the first time in 1972 and 10,000 in 1999. When will it cross 17,000 (almost there yesterday) or even 20,000? On continued low volume, it seems unstoppable.

Yesterday’s action was dictated by PMIs around the world which showed continued expansion (including in China) auto sales and which grew at the fast pace in eight years in June. Even GM saw sales rise 1% versus Ford’s 6% drop. Note that the U.S. economy is no longer recovering (and hasn’t been for about year) – it is expanding and now stands some 10% above the previous peak according to Ed Yardeni. In previous expansions, however, the economy would be some 21% higher than the previous peak. Meanwhile, U.S. households have added some $26 trillion in wealth since 2009. Other noteworthy items, non-revolving consumer credit debt (which includes auto loans) stands at a $2.3 trillion (with about half of that being student loans) and non-financial corporate debt currently at a record high.

On BNN today we will be focusing on opportunities for the second half (at 9 a.m., 10 a.m. and 4:30 p.m. ET). We’ll also hear directly from Kenneth Feinberg the GM Compensation Administrator. We’ll be covering the Scottish independence vote. And my favourite headline of the day from one of our regular guests “No boom, no bubble, no bust” (John Stoltzfus from Oppenheimer at 8:30 a.m.)

On the economics calendar there is the ADP report (8:15 a.m. – estimate 205,000) which could set the stage for tomorrow’s non-farm payroll report. It has been reported at a whopping 281,000. Also, some secondary items include ISM New York and Factor Orders. In Canada, the economy calendar is light. In Europe, it was producer prices for May which showed a 1% decline year over year. Oil inventories will also be released and after last week’s surprising 1.742 million barrel build (and two weeks in a row of builds at Cushing), these numbers could be market moving. Janet Yellen will be speaking at an IMF conference at 11 a.m. and Christine Lagarde will be questioning her at 11:30 a.m. – two of the most powerful women in the world.

On the research front, the restrictions are off the participants in the Prairie Sky IPO and I’ve seen at least three initiations this morning – two holds and one buy (RBC, Scotia and CIBC, respectively). The targets range from $43 to $41 to $43, respectively. Barclays has changed its weighting on U.S. pharmaceutical stocks to equal weight from overweight’ downgraded Bristol Myers to hold from buy and drastically reduced the valuation target to $46 $65; and upgraded Abbvie with a new $69 target (had been $44).

The IPO market has of course been hot (see GoPro up 20% yesterday – go figure) but who are the sellers? According to Pitchbook, private equity has been active in selling with 60 IPOs marking the most since Q4 2006. There have been a total of 317 “exits” from private equity investments in the second quarter totaling more than $91 billion in proceeds.

Items of note in the news include Jamie Dimon’s disclosure of his treatable throat cancer, Dov Charney’s ownership of American Apparel now at 43% up from 27%, Credit Suisse is joining Bill Ackman in his campaign to take over Allergan, Google buying Songza to compete with Apple and Pandora, and waiting for jobs and Mario Draghi’s ECB tomorrow. Tim Hortons is joining up with CIBC with a double-double Visa credit card.

Time to go -

Every morning Business Day Host Frances Horodelski writes a "chasenote" to BNN's editorial staff listing the stories and events that willbe in thespotlight that day.