Good news is often bad news. The Nov. jobs figures show that while the unemployment rate remained at 5%, some 211,000 new hires took place that month. Moreover, the Oct. figures were revised upwards. That means the Fed will raise interest rates for sure at its meeting in two weeks. That means Mexico and Canada must raise their interest rates too. This can hurt their economic growth and employment levels, ultimately because they are “too far from God, and too close to the United States”.

The same is not true of Europe. In anticipation of higher interest rates, their stocks were mostly up on Friday.

Gold and therefore our SPDR GLD ETF (GLD), are up a second day in a row. This is mainly because the rise of the euro and the resulting fall in the dollar make the yellow metal attractive for averaging down. Adrian Ash, head of research at our advertiserwww.bullionvault.com writes:

“Selling gold looks like a 'crowded trade' for hot-money hedgies and fund managers, the 6^th biggest 'short' position in US derivatives in at least 20 years.

“Analysts everywhere think the Euro is going down. Because the single currency is so weak, the only option everyone thinks is more QE and lower interest rates. That is exactly what the European Central Bank delivered on Thursday.

“But the extra money printing and the extra sub zero rates (minus 0.3% on ECB deposits) didnt meet what analyst, money manager, and traders wanted. Bang! Went the euro, jumping at its fastest pace since 2009 and erasing the last month of losses against the US$.

“To sell a currency you need to buy another. And even before the US CB, the Federal Reserve, gets around to raising its key interest rate from zero, history says the US dollar has now enjoyed its 3^rd longest rise in the last 4 decades.

“When everyone expects the same thing, they might get the opposite, especially with ham-fisted central banks desperately trying to ensure it happens too.

“Thursday's jump in the euro meant a huge drop in the dollar. That rescued gold and silver prices from new 6-year lows. For Eurozone investors, the surge in the single currency meant gold and silver became very much cheaper. Their central bank is, after all, trying to destroy the value of their cash savings.”

Adrian is careful to point out that just because shorting gold is a crowded trade it may not necessarily be a losing one. In early 2013 gold was a popular short and collapsed 25%.

Note that while the euro markets suffered from currency trends, this did not hit Britain, Switzerland, Norway, Sweden, and Denmark, which would have become subject to currency inflows out of the euro if the ECB had gone further in cutting rates and quantitative easing.

War

*I am resisting the urge to load up on defense stocks, beyond Canadian CAE which trains pilots for either civilian or military planes and Israel's Ituran (ITRN) (the Israeli car and truck location software system which has been used to create missile shields). The lesson from the horror-show in San Bernardino is that fighting IS and Al-Queda will take more than hardware.

But if you do want to buy into military hardware, look to Europe which has a cost edge rather than US firms. About half the German planes now being used to fight IS are inoperative because their spare parts cannot be procured. (Volkswagen is not the only technology failure in Germany.) Alas there are no longer any Euroland defense stocks with active ADRs. As the NATO countries cut defense spending the makers of weaponry dropped their sponsored US listings to save money.

*If you want to buy a military supplierm pick up Renishaw plc, (RSW) in London, which sells precision gauges and cutters to the aviation industry, as well as to Applewatch (for which we bought it.) It was up 40 pence on Friday and that is not related to Apple.

*Two ADR companies from France and collaborating over recycling to make war on carbon emissions, targeting waste of water and packaging. They plan on using recycled plastic and manure from dairy farms to make biogas energy. Veolia (VEOEY) and Danone, the dairy firm, will work together to achieve zero net carbon emissions, They plan on using recycled plastic and manure from dairy farms to make biogas energy and other alternative fuel. They will secure water access starting next year in France itself and then gradually applying what they learn globally. VEOEY is an MNC in water and waste management.

*The only defense contractor with an active ADR now is Safran (SAFRF), formerly Snecma,also of France, with ticker symbol SAFRF. It is down to its midsummer price levels in dollars mainly because of FX effects. It makes engines, powerplants for civil and military jet engines, and submarine navigations systems. Iits Q3 sales, up 15% to euros 4.14 bn, beat forecasts. It also makes the Morpho Desktop Itemizer to find trace amounts of explosives on passengers' skin, baggage, carried items, and clothing as well as narcotics. It also makes SIM cards. I will work on this some more.

Pharma & Biotech

*An increasing split in outlook between startup biotechs and the drug majors has become clearer. The biotechs are mostly down because their future success with new drugs is uncertain; and the drug majors are either rising or falling modestly. While takeover bids have reached a new multiyear peaks, the upfront payments for drug development are actually sinking, with most of the payback via milestones depending on future trial and market results.

Things are made more fraught by the political stumbles of some smaller pharma firms. Victims of falling stock prices include Compugen (CGEN) of Israel in part because several other Israeli microcap bio firms like Bioline RX. Galapagos also fell (GLPG, sold) after being downrated to neutral by Crédit Suisse with a target price of $46.

*However GSK, Teva, Novartis, Toray, Novo Nordisk, Reckitt Benckiser, Indivior, Bavarian Nordic, Alkermes, and even Benitec are up. For TEVA, NVO, and RBGLY there are other reasons for the rise.

*NVO applied to the EU for marketing authorization for its fast acting insulin taken at mealtimes for glucose control, aspart, in both type 1 and type 2 diabetes. It will be sold in a prefilled delivery device called flextouch. The US FDA application will be filed before the end of this year.

*ALKS rose despite huge sales by its brass: CEO Richard Pops sold 51,000 shares, a new high even for him and was followed by other top executives selling another 29,000 shares, counting only those who had to report to the US SEC.

*Reckitt Benckiser (RBGLY) was again tipped as an overweight by JP Morgan this week. Also insiders have been buying, which means they know something that will make them money. (Insiders sell for many reasons, like portfolio diversification or to buy things or pay bills. But they don't sell without considering the chances of gain from the companies they run.)

*Guggenheim rates Teva a buy. We have been tipping TEVA foreva.

*Zacks cut Dr Reddy's Labs to strong sell, as bad as it can get. We told you first.

Other Soft Sectors

*Abhimanyu Sisodia writes that Finacle banking software from Infosys (INFY) was named one of the top 5 Q4 mobile banking platforms by the Forrester Research, a respected tech tracker. Sisodia and INFY are Indian.

*Canaccord, National Bank of Canada, and Royal Bank of Canada rated raised Bank of Nova Scotia (BNS) at buy, sector perform, and outperform respectively. Scotiabank (surprise, surprise) rated its parent a buy.

*Goldman Sachs raised BCE to a buy.

*Old Mutual was upped to outperform by Avios brokerage. We've reported on its future board chairman on Thursday, which may be why.

Heavy Industry

*Zacks rates Schlumberger Ltd (SLB) a buy. We have been tipping SLB forever. It was down slightly on Friday on the oil outlook however.

*Vale intends to reopen its Samarco iron ore facility, the one which flooded the Rio Doce, as it is the best way to fund the cleanup. It is not clear if its partnerBHP Billiton will remain its partner. The price of iron ore meanwhile has fallen to a 10-yr low, in dollars. In Brazilian reais it has fallen much further. Vale is also exiting an African mining investment and selling and leasing back its Valemax fleet (built to ship iron ore pellets to China which doesn't want that much now.) This could raise as much as $1.1 bn. VALE is back below where I averaged down 3 weeks ago. One way you can play VALE from abroad is to buy Vale Overseas Anleihe in Stuttgart at 14% off suggests Felipe Monteiro de Carvalho, a Brazilian software engineer living in Poland,writing in www.seekingalpha.com. I looked into whether we can buy it in Os Estados Unidos and the answer is não, unfortunately.

Fund News

*Canadian General Investments (CGRIF) closed Nov. having a YTD loss in its net asset value of 2.6%, substantially beating the Canadian index which lost 5.4%. Its largest holdings are Diorama (6.1%); cash (4.1%); Canadian Pacific Railway (3.7%); CCL Industries (3.4%); Element Financial, Bank of Montreal, and Enbridge Inc, (all at 3.1%); Franco-Nevada (2.9%); Gildan Activewear (2.8%); and Royal Bank of Canada(2.7%). Its NAV on Nov. 30 hit $25.81 and its stock price hit $19.26, meaning this closed end fund is a super bargain. It is managed by Vanessa Morgan CFA.

*Yoma Strategic Holdings (YMAIF) is selling 75% of its Digicel Myanmar Tower Co Ltd to a fellow Singapoean firm because Myanmar cellphone demand is shooting up beyond YMAIF's capacity to meet it. At the end the last fiscal year, March 2015, national cellphone coverage rose to 55% of the country vs 33% at the end of the prior FY, and a mere 11% the year before that. The rise of democracy means Burmese want to talk to each other.

*Another analyst has shown enthusiasm for Valeant, Chris Schott of JP Morgan whose target price for VRX of Canada is $225/sh. So our Bill Ackman at Pershing Square Holdings (PSHZF) is not alone. PSH.