Bear or bull trap?
The chase by Frances Horodelski:
Bear trap. This is a misnomer according to Sam Stovall at S&P Capital IQ. If you look to trap a mouse – it’s called a mouse trap, not a human trap. Therefore, a bear-trap should actually be a bull trap – because you want to trap the bull. Interesting.
They’re coming out swinging. This morning Canadian Oil Sands released its letter to shareholders highlighting 15 reasons why shareholders should reject Suncor’s offering of 0.25 shares of SU per COS share that highlight how that offer is undervalued, opportunistic and exploitive. The President and CEO of Canadian Oil Sands, Ryan Kubik, will join BNN at 9:35this morning highlighting these reasons. We will also provide Suncor’s response when received. COS also provided an updated outlook for the year including an increase in cost savings although mid-point of 95 million barrels of production in 2015 is below September’s low end of a 96-107 million range.
Here’s what matters today: China’s GDP, while continuing to soften (6.9%) came in slightly above expectations as did retail sales. Valeant reported Q3 results that came in ahead of expectations on both the earnings and revenue line. Merger Monday is true today with at least two deals – Microsemi upping Skyworks offer for PMC-Sierra (to $11.50 stock and cash), while Diebold has offered $1.8 billion for Germany’s Wincor Nixdorf (the stock is up 16% in Frankfurt trading). Earnings will also take centre stage. According to Thomson Reuters, 116 S&P 500 companies with report results including today’s reports from Halliburton, Hasbro, Morgan Stanley and IBM. The blended earnings results for Q3 (actual and estimates) are running at -4% with 71% of companies reporting results above expectations on earnings. TD (following what seems like a trend in the Canadian banking industry) is reducing cost through head-count reduction. We’ll focus in on this story. We’re also following Bombardier as the street discussions the options for the company (who will they deal with, when are orders coming, what about the voting-block of the Beaudoin family, and earnings are coming on October 29).
It is a big week for Canada. We have the election today, the Bank of Canada on Wednesdaywill release its rates statement, monetary policy report and press conference (no rate cut is currently expected and some expect the Bank to raise its growth forecast). Retail sales areThursday and CPI is on Friday. U.S. data will be loaded with housing related information. The ECB releases its rate announcement on Thursday. On the Canadian election, according to work done by RBC’s technical analytical team, the best performance, one year out from the election for the TSX has been when there has been a minority government. Caveats include the fact that there are only 15 data points since 1921 and that usually, what happens in the U.S. markets has a greater influence on the TSX than election results.