1. Art and Diseño

AGF week in review
FOR THE WEEK ENDING JANUARY 30, 2015
S&P TSX
In this issue:
14,673.5
-105.9
-0.7%
> Week in review
15,000.00
 Canadian economy contracts in November; Canadian banks reduce prime rate
14,500.00
 U.S. consumer confidence reaches multi-year high, Fed stays patient on rates
 U.S. GDP growth slows in Q4 and misses estimates, new home sales continue to
14,000.00
rise
F
M
T
W
T
F
S&P 500
 AGF and CGI report quarterly results
 Boeing reports strong Q4-2014 results and a bullish 2015 outlook; Qualcomm
1,995.0
-56.8
-2.8%
reduces forecast
 Eurozone deflation rises, unemployment falls marginally, consumer confidence
rises
2,100.00
 Northrop Grumman reports Q4-2014 earnings
2,000.00
> The week ahead
1,900.00
F
M
T
W
T
F
W
T
F
MSCI World
1,267.9
-19.6
-1.5%
1300.00
1200.00
F
M
T
Sources: Bloomberg, Local Currency.
> Market data
AGF WEEK IN REVIEW
FOR THE WEEK ENDING JANUARY 30, 2015
Week in Review
Canadian economy contracts in November; Canadian banks reduce prime rate
Statistics Canada reported that real GDP contracted 0.2% month over month in November 2014, below
the rise of 0.3% in the previous month and expectations of no change. Year over year, the Canadian
economy grew by 1.9%.
The major components of the GDP calculation reflected generally weak results. Goods-producing
industries shrunk 0.8% month over month, led by manufacturing and mining and oil and gas extraction,
which experienced declines of 1.9% and 1.5%, respectively. The declines were partially offset by
increases in the utilities and agriculture and forestry sectors. Service-producing industries were flat month
over month after gaining 0.3% during the previous month. Increases in retail trade and the public sector
were offset by decreases in other industries.
Canada’s major banks reduced their prime rates to 2.85% from 3% in response to last week’s unexpected
move by the Bank of Canada (BoC) to reduce its overnight rate. Royal Bank of Canada was the first to
announce its cut, followed swiftly by Toronto-Dominion Bank, Bank of Montreal, Canadian Imperial Bank
of Commerce and Bank of Nova Scotia. National Bank of Canada reduced its prime rate as well.
While all the aforementioned banks reduced their prime rates, their reduction of 15 basis points (bps) was
short of the BoC’s cut of 25 bps, as the chartered banks were motivated to protect their profit margins as
the spread between what the banks pay for borrowed money and what they pay for money lent out has
narrowed considerably. The move by the banks followed RBC’s decision late last week to reduce its
benchmark five-year fixed-rate mortgage rate by 10 bps to 4.84%. In addition, TD announced last week
that they were going to hold their prime rate at 3%.
The prime rate across the banks has not moved since September 2010 and has never dropped by less
than 25 bps since the BoC began tracking such data in 1935.
Sources: Statistics Canada, The Globe and Mail, Reuters.
U.S. consumer confidence reaches multi-year high, Fed stays patient on rates
The U.S. Conference Board Consumer Confidence Index increased in January to 102.9, above
expectations of 96.0. December’s reading was revised upwards to 93.1 from 92.6. “Consumer confidence
rose sharply in January and is now at its highest level since August 2007. A more positive assessment of
current business and labor market conditions contributed to the improvement in consumers’ view of the
present situation,” the Conference Board stated.
The U.S. Federal Reserve Board struck a positive tone with its most recent monetary policy
announcement, stating that “economic activity has been expanding at a solid pace” and that it will remain
patient on when it will increase the benchmark federal funds rate from the current historical low of 0%0.25%. The Fed acknowledged the strength of the U.S. economy and that it remains on track to raise
rates later this year. The Fed centered its discussion of the economy on the labour market, focusing on
strong job gains and a declining unemployment rate. The central bank admitted that inflation has fallen
further below its long-term objective as a result of recent declines in energy prices, but it expects inflation
to rise closer to 2% over the “medium term” as factors related to lower energy prices fade and the labour
2
AGF WEEK IN REVIEW
FOR THE WEEK ENDING JANUARY 30, 2015
market continues to improve. The Fed reiterated that if the economic data that it is monitoring indicates
“faster progress” towards its dual mandate of maximum employment and price stability, it may raise
interest rates sooner than currently anticipated.
Sources: The Conference Board Inc., Bloomberg, Reuters.
U.S. GDP growth slows in Q4 and misses estimates, new home sales continue to rise
The U.S. economy slowed in Q4, as GDP increased at a seasonally adjusted annual rate (SAAR) of 2.6%
from Q3-2014 according to the first estimate from the U.S. Bureau of Economic Analysis. The figure was
well below Q3-2014 growth of 5.0% and expectations of 3.2%. A second, more complete estimate of GDP
will be released at the end of February 2015.
According to the Thomson Reuters/University of Michigan Surveys of Consumers, consumer sentiment
for January was revised downwards to 98.1 from the prior reading of 98.2, below estimates of 98.2 but
higher than December’s final reading of 93.6. January’s initial reading of 98.2 was the highest level since
January 2004. The survey is a gauge of how consumers feel the economic environment will change.
Higher values represent a greater degree of confidence among consumers.
U.S. sales of new homes for December 2014 were at a seasonally adjusted rate of 481,000, above the
consensus estimate of 452,000, the revised November rate of 431,000 and the December 2013 rate of
442,000. In addition, December 2014’s figure was above the high end of the range of estimates compiled
by Bloomberg. The median sale price of new homes sold during the month was US$298,100 and the
average price was US$377,800.
Sources: U.S. Bureau of Economic Analysis, U.S. Department of Commerce, Bloomberg.
AGF and CGI report quarterly results
AGF Management Ltd., one of Canada’s largest independent investment management firms with offices
around the world, reported its Q4-2014 results with revenues from continuing operations decreasing 4.9%
year over year to $111.7 million and earnings per share (EPS) from continuing operations increasing 75%
to $0.14. The large increase in EPS was driven by lower amortization expenses. AGF’s EPS fell short of
the consensus estimate of $0.16.
AGF’s assets under management (AUM) increased 2.0% year over year to $35.1 billion. The company’s
AUM was comprised of retail funds of $19.11 billion (down 2.5% year over year), institutional and subadvisory funds of $11.34 billion (up 4.3%), high-net-worth funds of $4.45 billion (up 12.1%) and alternative
asset management funds of $210 million. During the quarter, retail fund redemptions improved 33.6% to
$399 million.
CGI Group Inc. reported Q1-2015 results with revenues declining 3.9% year over year to $2.54 billion,
bookings increasing 52.7% to $4.3 billion and the backlog expanding 4.8% to $20.18 billion. The
information technology and business process services firm’s adjusted EPS were $0.74, which was $0.01
below the consensus estimate but $0.14 above the year-ago quarter’s EPS. CGI’s net debt-tocapitalization ratio declined to 25.1% from 38.9%.
CGI’s Board of Directors authorized the renewal of the company’s share buyback program with the
purchase of up to an additional 10% of the company’s public float.
3
AGF WEEK IN REVIEW
FOR THE WEEK ENDING JANUARY 30, 2015
Sources: AGF Management Ltd., CGI Group Inc., RBC Capital Markets, Bloomberg.
Boeing reports strong Q4-2014 results and a bullish 2015 outlook; Qualcomm reduces
forecast
The Boeing Co., the world’s largest aerospace and defense manufacturer, released Q4-2014 results with
a year-over-year increase in revenues of 3% to US$24.5 billion as a result of higher deliveries. Its
adjusted earnings per share were US$2.31, easily surpassing the consensus estimate of US$2.10.
Revenues in Boeing’s largest division, Commercial Airplanes, rose 15% to US$16.8 billion while revenues
in the Defense, Space and Security division fell by 14% to US$7.6 billion. The company released its 2015
full-year adjusted revenue guidance of US$94.5-$96.5 billion and EPS guidance to US$8.20-$8.40.
Analysts are projecting revenues of US$93.4 billion and EPS of US$8.65. The aircraft maker’s backlog
swelled to a record US$502 billion and included net orders for the quarter of US$37 billion. During the
quarter, Boeing delivered 35 Boeing 787 Dreamliners, up from 25 last year and 126 Boeing 737s, up from
110.
Qualcomm Inc., a manufacturer of chipsets for mobile devices, reported Q1-2015 revenues of US$7.1
billion, a 7.2% year-over-year increase, beating expectations of US$6.9 billion. The company’s adjusted
EPS were US$1.34, above the average estimate of US$1.25. However, Qualcomm downgraded its fullyear 2015 revenue guidance to US$26-$28 billion from US$26.8-$28.8 billion and its adjusted EPS
guidance to US$4.75-$5.05 from US$5.05-$5.35. Meanwhile, for Q2-2015, the company expects
revenues of US$6.5-$7.1 billion (with analysts expecting US$6.7 billion) and adjusted EPS of US$1.28$1.40 (with analysts predicting US$1.28).
Sources: The Boeing Co., Qualcomm Inc., Bloomberg.
Eurozone deflation rises, unemployment falls marginally, consumer confidence rises
According to Eurostat, eurozone inflation was -0.6% in January, below -0.2% in December. Inflation was
worse than the consensus estimate of -0.5%. The main driver of the fall in consumer prices was energy
prices, which fell 8.9%, greater than the fall in the prior month of 6.3%. The European Central Bank
targets inflation of just below 2%.
Eurozone unemployment was 11.4% in December, a decline from 11.5% in November and better than
expectations of no change. According to Eurostat, this is the lowest unemployment rate in the currency
bloc since August 2012. The nations with the highest unemployment rates were Greece (25.8% in
October 2014) and Spain (23.7%), while the nations with the lowest rates were Germany (4.8%) and
Austria (4.9%).
Eurozone consumer confidence increased in January to 101.2, slightly below expectations of 101.6.
December’s reading was revised to 100.6. January’s consumer confidence was the highest since July
2014.
Sources: Eurostat, CNBC.
Northrop Grumman reports Q4-2014 earnings
According to Northrop Grumman Corp.’s Q4-2014 earnings report, adjusted EPS reached US$2.26, an
increase from the year-ago quarter’s US$2.00 and above the consensus estimate of US$2.25. Total sales
4
AGF WEEK IN REVIEW
FOR THE WEEK ENDING JANUARY 30, 2015
of the aerospace and defense company declined by 0.8% to US$6.11 billion. Northrop Grumman’s
backlog at the end of the quarter was US$38.2 billion, greater than the backlog of US$37.0 billion at the
end of last year.
For 2015, Northrop Grumman expects revenues of US$23.4-$23.8 billion and EPS of US$9.20-$9.50,
while the prevailing consensus estimates were US$23.5 billion and US$9.11, respectively.
Sources: Northrop Grumman Corp., The Wall Street Journal.
5
AGF WEEK IN REVIEW
FOR THE WEEK ENDING JANUARY 30, 2015
The week ahead

Canadian economic releases – Building permits (Jan.), unemployment (Jan.)

U.S. economic releases – ISM manufacturing (Jan.), unemployment (Jan.)
The commentaries and other information contained herein are provided as a general source of information based on information
publicly available as of January 30, 2015 and should not be considered as a forecast, research, personal investment advice,
recommendation or an offer or solicitation to buy, sell or hold any securities or other financial instruments. Every effort has been
made to ensure the accuracy of the commentaries and other information at the time of publication. However, market conditions
may change. In addition, the accuracy and completeness of the commentaries and other information contained herein cannot be
guaranteed. The manager and its affiliates may from time to time invest in hold or sell securities or other financial instruments
relating to companies or other entities referred to herein. Reliance on the commentaries and other information herein is at the sole
discretion of the reader. The manager accepts no responsibility for individual investment decisions arising from or in any way based
on the reader’s reliance on the commentaries and other information contained herein. Past performance may not be indicative of
future results.
6
AGF WEEK IN REVIEW
FOR THE WEEK ENDING JANUARY 30, 2015
Market data
CANADIAN EQUITY INDEXES ($CDN)
S&P/TSX Composite PR Index
S&P/TSX Composite TR Index
Energy TR
Materials TR
Industrials TR
Consumer Disc. TR
Consumer Staples TR
Health Care TR
Financials TR
Information Technology TR
Telecom Services TR
Utilities TR
S&P/TSX 60 TR Index
MSCI Canadian Small Cap PR Index
Close
14,673
44,836
3,683
2,706
3,039
2,570
4,789
3,022
3,506
209
2,384
3,921
2,116
331
Return (% )
Week
YTD
-0.7
0.3
-0.7
0.5
-0.2
-2.0
3.1
15.7
-0.7
-0.9
-0.1
0.1
3.8
3.0
1.7
18.8
-3.2
-5.4
0.7
5.5
-1.3
5.8
1.4
6.5
-0.8
0.6
-0.2
-1.0
WORLD EQUITY INDEXES (local)
CAC 40 PR Index
DAX 30 PR Index
DJIA PR Index
DJIA TR Index
FTSE 100 PR Index
FTSE 100 TR Index
FTSE/Xinhua A200
Hang Seng PR Index
Hang Seng TR Index
MSCI EAFE TR Index
MSCI Emerging Markets TR
MSCI Europe TR Index
MSCI Far East Free (ex-Japan) TR
MSCI World TR Index
MSCI World AC TR Index
NASDAQ Composite PR
Nikkei 225 PR
Russell 2000 TR
Russell 2000 Growth TR
Russell 2000 Value TR
S&P 500 PR Index
S&P 500 TR Index
Shanghai Comp PR
Close
4,604
10,694
17,165
34,374
6,749
5,100
9,051
24,507
59,206
6,436
1,932
8,149
1,092
6,267
756
4,635
17,674
5,500
4,841
8,447
1,995
3,588
3,210
Return (CAD, % )
Week
YTD
2.1
10.1
3.3
11.0
-0.3
5.5
-0.3
5.6
1.4
8.6
1.4
8.7
-2.4
4.4
1.2
13.8
1.2
13.8
2.4
10.1
-0.4
10.2
2.0
9.5
1.0
11.7
0.8
7.6
0.7
7.8
0.0
7.2
3.9
13.0
0.6
6.0
0.9
7.0
0.3
5.0
-0.2
6.1
-0.6
6.2
-2.1
7.9
Interest Rates
Bank of Canada Overnight Lending Rate
Bank of England Repo Rate
European Central Bank Min bid rate at refi tender
Federal Funds Target Rate
7
Current
0.75%
0.50%
0.05%
0.25%
1 YR
6.8
9.9
-6.5
2.8
21.8
28.8
51.1
29.4
10.2
32.9
20.3
20.0
11.9
-4.2
Annualized Return (% )
3YR
5 YR
10 YR
5.7
5.8
4.8
8.9
8.8
7.8
0.6
2.8
6.0
-12.0
-2.4
5.8
23.3
19.7
12.7
29.6
19.1
9.1
33.3
23.0
10.4
47.0
51.6
18.5
14.9
11.9
8.7
21.3
-3.6
-0.9
16.6
19.3
11.7
7.6
9.9
8.9
9.8
8.8
8.3
-2.0
3.6
3.1
Annualized Return (CAD, % )
1 YR
3YR
5 YR
10 YR
4.6
15.4
3.6
0.5
8.3
21.8
13.1
8.5
23.4
19.8
15.3
5.4
26.3
22.8
18.3
8.1
7.2
13.0
7.8
1.3
11.0
17.3
11.7
5.1
68.1
19.7
6.5
15.3
27.0
15.5
7.8
6.3
32.2
19.9
11.6
10.0
13.4
19.0
10.7
5.5
20.4
9.7
7.1
9.2
10.9
20.1
11.1
5.7
26.7
16.3
11.8
10.1
21.9
23.0
15.4
7.0
21.7
21.3
14.3
7.0
28.1
27.8
20.8
8.8
17.5
18.3
9.8
3.5
18.1
24.8
19.8
8.3
19.0
26.0
21.5
9.3
17.3
23.6
18.1
7.3
26.7
24.4
17.3
5.7
28.7
26.9
19.7
7.9
74.5
21.6
7.0
13.6
ECO_RELEASE_DT
Next Meeting
04/03/2015
05/02/2015
05/03/2015
18/03/2015
52 wk high 52 wk low
15,685
13,450
47,242
40,044
4,834
3,271
2,893
2,156
3,193
2,445
2,579
1,948
4,789
3,137
3,032
1,839
3,821
3,109
209
151
2,415
1,912
3,921
3,244
2,196
1,856
400
312
52 wk high 52 wk low
4,679
3,789
10,811
8,355
18,103
15,341
36,210
30,023
6,905
6,073
5,187
4,558
18,144
5,575
25,363
21,138
60,784
49,338
7,135
6,124
2,197
1,791
9,286
7,728
1,150
954
6,520
5,722
792
691
4,815
3,946
18,031
13,885
5,750
4,934
5,009
4,225
8,927
7,792
2,094
1,738
3,627
2,676
3,407
1,974
AGF WEEK IN REVIEW
FOR THE WEEK ENDING JANUARY 30, 2015
Total Ret (% )
Commodities ($US)
Copper
Corn
Crude Oil
Gold
Natural Gas
Nickel
Platinum
Soybeans
Silver
Wheat
Zinc
Bond Yields
Canada
2 Year Treasuries
10 Year Treasuries
30 Year Treasuries
ECB
2 Year Treasuries
10 Year Treasuries
30 Year Treasuries
Japan
2 Year Treasuries
10 Year Treasuries
30 Year Treasuries
US
2 Year Treasuries
10 Year Treasuries
30 Year Treasuries
Currencies
CAD / EURO
CAD / USD
CAD / UK POUND
USD / AUSTRALIAN $
USD / BRAZIL REAL
USD / EURO
USD / MEXICAN PESO
USD / UK POUND
USD / YEN
8
Close
249
370
48
1,284
2.69
15,118
1,241
961
17.26
503
2,119
CPN
Coupon
1.500
2.250
3.500
0.000
0.500
2.500
0.100
0.300
1.500
0.500
2.250
3.000
Close
0.70
0.79
0.52
1.29
2.68
0.89
14.98
0.66
117.49
Week
-0.3
-4.3
5.8
-0.8
-9.9
5.7
-2.1
-1.2
-5.7
-5.1
1.5
MATURITY
Maturity Date
01/02/2017
01/06/2025
01/12/2045
16/12/2016
15/02/2025
15/08/2046
15/02/2017
20/12/2024
20/12/2044
31/01/2017
15/11/2024
15/11/2044
Historical Prices
YTD
-11.7
-6.8
-9.4
8.6
-6.9
0.2
2.8
-5.7
10.2
-14.8
-2.3
1 YR
323
434
98
1,244
5.01
13,768
1,383
1,275
19.16
554
1,974
Current
Price
102.20
109.67
139.15
100.35
101.96
142.09
n/a
0.27
1.27
100.10
105.48
116.86
Total Ret (% )
Week
YTD
-3.17
-2.21
-2.37
-8.81
-2.77
-5.50
1.81
5.28
3.98
0.95
-0.69
7.25
2.18
1.56
-0.48
3.44
-0.24
-1.88
1 YR
0.66
0.90
0.54
1.14
2.41
0.74
13.37
0.61
102.72
3YR
383
632
99
1,730
2.71
21,258
1,613
1,185
33.51
645
2,113
5 YR
305
357
73
1,081
5.13
18,447
1,505
914
16.21
474
2,090
10 YR
144
196
47
427
6.26
14,465
872
514
6.78
290
1,286
52 wk high 52 wk low
332
242
520
318
108
44
1,392
1,131
6.49
2.61
21,203
13,805
1,521
1,177
1,537
904
22.18
14.29
735
466
2,414
1,936
10 YR
0.62
0.81
0.43
1.29
2.65
0.77
11.25
0.53
103.28
52 wk high 52 wk low
0.73
0.64
0.94
0.78
0.57
0.52
1.29
1.05
2.76
2.18
0.90
0.71
15.06
12.82
0.67
0.58
121.85
100.76
Yield to
Maturity
0.39
1.25
1.83
-0.19
0.30
0.95
n/a
0.27
1.27
0.45
1.64
2.22
Historical Prices
3YR
5 YR
0.76
0.67
1.00
0.93
0.64
0.58
0.94
1.13
1.75
1.90
0.76
0.72
12.98
13.10
0.64
0.63
76.35
90.27