MARQUEST WEEKLY COMMENTARY – NOVEMBER 16, 2015.
Liis Palmer, Cassels Investment Management Inc.
Global Balanced Fund
Last week the MSCI World Index was down 2.9 percent. The TSX was down 3.5 percent. The C$ was down 0.1 percent against the US$. Commodity prices were weak based on high supply numbers and low global demand concerns. Chinese economic data releases were disappointing. The Marquest Global Balanced Fund A units closed at $17.33 compared with $17.76 the previous week.
Significant contributors to performance were D.R. Horton (up 4.2 percent), General Electric (up 1.1 percent) and Time Warner (up 1.4 percent). D.R. Horton is one of the largest homebuilders in the US. They reported strong numbers in the prior week. Better than expected employment numbers (non farm payrolls and initial jobless claims) took the stock higher last week.
Laggards were CVS Health (down 7.1 percent), Sanofi (down 7.6 percent) and Crescent Point Energy (down 6.7 percent). With the impending purchase of Rite Aid by Walgreen, CVS will be one of two dominant players in the US pharmacy market. CVS is not just a retailer; it is one of the largest prescription benefits managers in the US. Recent price weakness is not reflective of the fundamentals of the company but rather, the move away from Healthcare indices by investors. Crescent Point’s share price fell with the energy complex as WTI oil fell 8 percent.