Investors with a more bullish view on natural gas prices might want to look to TransCanada Corp. (TRP) as a derivative play on the commodity. Higher natural gas prices would provide earnings upside for the company due to an expected improvement in power prices, particularly in Alberta, according to RBC Capital Markets analyst Robert Kwan.

He noted that in the past week, several coal plant outages combined with the recent uptick in gas prices, has pushed Alberta power prices above an average of C$100 MW per hour. Alberta power prices troughed in the second quarter and RBC anticipates an improvement going forward.

While the market’s strength is propelling assets under management (AUM) at Canadian money managers above expectations, investors are also responding to positive fundamentals for the group. Recent cost-cutting and streamlining efforts by Canadian asset managers appear to have positioned them well for healthy performances in the next few quarters.

GMP Securities analyst Stephen Boland is growing more bullish on several names in the sector as a result. In a normal market, the analyst might consider lowering his recommendations as stock prices approach his targets. However, due to increased investor optimism and a possible correction, Mr. Boland believes downgrading beta stocks in an increasingly positive market would be unjustified at this point.

CGI Group lnc. (GIB) [TSE:GIB.A] shares are getting a nice boost on Monday, rising 5% on the Toronto exchange and 2% on the NYSE after IT services competitor Perot Systems (PER) was snatched up by PC giant, Dell Inc. (DELL).

Dell will acquire all the outstanding shares of Perot for US$30/share in cash, representing a 67% premium to Friday's closing price. Dell indicated the Perot transaction will not be accretive until the fiscal year of 2012.

The rebound in equity markets over the past six months wildly exaggerates the economic landscape of the moment, says David Rosenberg, chief economist and strategist at Gluskin Sheff + Associates.

And with the S&P 500 now trading north of a 26x price-to-trailing earnings ratio, the next twelve months is shaping up to be a rough one for investors.

Is the rebound in base metal prices overdone? The jury is out, but RBC Capital Markets analysts Fraser Phillips, Adam Schatzker and Robin Kozar are still relatively upbeat on the long-term prospects for most of the metals. In a note to clients on Monday, they laid out their thoughts for each one.

Aluminum: Downside risk is limited from here, as the current spot price is at the 95th percentile of their 2009 cost curve, and is very low in real terms versus inventories as weeks of consumption. But high inventories and capacity could restrain any price increases. Their long-term price target is US90¢ a pound.

With Potash Corp. of Saskatchewan Inc. (POT) lowering its 2009 earnings estimates and 2010 outlook for demand last week, analysts are expecting downward pressure on the company's shares for the rest of the year.

Brian MacArthur, analyst with UBS, suggests U.S. and offshore buyers are still waiting to see if China will get an even lower contract price than India did when it agreed to US$460 a tonne with Russian producer Silvinit earlier this summer.

Despite the fact that equity markets continue to gather more steam, with global indices now trading near year-to-date highs and volumes having picked up nicely, retail and institutional portfolios are still positioned defensively, according to Vincent Delisle. However, the Scotia Capital strategists thinks improving news flow and market fundamentals are drawing more investors to the dance floor.

Mr. Delisle told clients:

Andrew Pyle
Wealth Advisor Scotia MacLeod

Q) When did you know this was no ordinary stock market correction?

It has been a tough slog for Inmet Mining Corp. (IEMMF.PK) as it tried to develop its Las Cruces copper project in Spain. But after overcoming some major permitting challenges, the mine is up and running.

After visiting the site, Canaccord Adams analyst Orest Wowkodaw is very impressed with what he sees.

AMR Corp.’s (AMR) plans to order 22 regional jets from Bombardier Inc. (BDRAF.PK) announced Thursday does little to change the current challenges the manufacturer faces in the aerospace market, according to Cameron Doerksen, Versant Partners analyst.

He said in a note to clients:

Try as it might, Microsoft's (MSFT) mobile media player Zune still can't touch Apple's (AAPL) iPod Touch. And it may not get the opportunity to. Ever.

Microsoft rolled out its latest iteration of its flagship music and media device recently with some decent hardware and software upgrades — including the ability to stream music over the Web to a PC. The Zune can also link to a television. Apple's Touch can do neither.

With the auto industry recovering from its brutal lows early this year, Citigroup Global Markets analysts Alan Heap and Alex Tonks have dug into the implications for commodities.

According to their research, the most levered commodities to the auto sector are platinum and aluminum, followed by steel and zinc. Autos make up 60% of platinum consumption and 35% of aluminum consumption, they wrote.

Despite the bearish backdrop for natural gas prices due to rising inventories levels, supply exceeding demand, and the emergence of prolific lower-cost shale plays that are flooding the market, the past couple of weeks has been surprisingly good for the commodity.

From its Sept. 4 low, Nymex natural gas futures for October have risen more than 35% to roughly $3.60 per Mcf. The Henry Hub spot price has done even better – up 75% to $3.21 per Mcf.

James O'Shaughnessy
Chairman & chief executive
Stamford, Conn.-based O'Shaughnessy Asset Management

If the S&P 500’s top 25 leaders return to their 2007 multiples, we should see another 33% gain for the index to 1,394, according to Birinyi Associates.

Analysts at the research firm looked into whether or not the market is truly expensive after the rapid recovery from its March 9 lows. The top 25 performers since then have accounted for 36% of the S&P’s gain.

More than 100 hedge funds had assets frozen in the Lehman Brothers bankruptcy. It really demonstrated how important it is to know where your assets are.

Many others, like Silvercreek Asset Management, had money with another major U.S. prime broker -- Bear Stearns. However, Silvercreek was prepared and had a backup where it quickly shifted its assets as soon as the rumblings of doom started to emerge, the firm's Bryn Joynt told conference delegates.

The rise in natural gas prices this month is a welcome sign for investors, especially after months of enduring a slow and painful drop in the value of North America's most exclusive commodity.

After falling as low as $2.50 per mmbtu on September 3, natural gas futures have risen to $3.65, an increase of 46%, that has given most natural gas stocks a huge lift over the past few weeks.

Noah Blackstein
Vice-president and portfolio manager
Dynamic Alpha Performance Fund

Q) When did you know this was no ordinary stock market correction?

The threat to TMX Group Inc. (TMXGF.PK) of losing market share to alternative trading platform, Alpha Trading Systems Ltd, has to date been an empty one, says Blackmont Capital analyst Richard McCormick.

While Alpha has accounted for 10% of TSX-listed volumes over the past six months, Mr. McCormick said the semi-annual volumes on the TSX are up 26% year-over-year, its highest growth rate in two years.

The raw numbers are huge.

On Monday, Exeter Resource Corp. (XRA) released an updated resource estimate for its Caspiche project in Chile of 19.8 million ounces of gold, 137 million ounces of silver and 4.8 billion pounds of copper. On an equivalent ounce basis, the project holds 33.7 million ounces of gold at a cut-off grade of 0.94 grams per tonne.