If you’re feeling the pain of the Canadian equity markets, these comments might explain. According to Scotia Capital’s strategist, on a market cap basis, the TSX is down 9.2% year-to-date and 21% year-over-year.
However, the difference between this performance and the equal weight is -4.2% and -18%, year-to-date and year-over-year, respectively, is the widest in 15 years (Nortel?). Today, this reflects the weight and performance of Valeant.
So if you own Valeant, you’re happy (or for that matter most everything else that isn’t energy, materials and even some financials). As for pain, breaking down the Dow Jones can show how skewed performance is this year.
The index is down about 3% on the year but there are big winners (United Health, Nike and Home Depot) but there are nine components down more than 10% YTD including Intel (-20%), Dupont (-23%) and Chevron (-23%) although the latter did break a 15-week losing streak last week.
Breaking into the top ten in terms of performance, and beating the market, is McDonalds (+6% year to date). For reference in 2014, the best performing stock YTD was Intel (+31%).
Full Article
Monday, August 17, 2015
Canadian equity markets OUCH!
Bull to bear?
Sublimity: “It’s the instant when one thing is about to become something else. Day to night, caterpillar to butterfly. Fawn to doe. Experiment to result. Boy to man.” - Dr. Hauptmann, All the Light we cannot see. Bull to bear(?).
Here’s the news that might be important to you. Barron’s has a bullish review on Potash (5.8% yield and potential upside to $34 U.S. in the next year and a $52 replacement value). On the negative side, oil could see $20 with a fast snap back after citing CFTC speculative long positions as a big negative (although net long positions of the speculators have declined over the past few months while the net short position of the commercials has also been declining – i.e. less short). In a summary of the 13F filings by major investors, position changes that stand out include Bridgewater exiting Potash, Fairholme adding to Sears Canada and Imperial Metals, The Gates Foundation reducing its position in Berkshire and adding BP, Kyle Bass added to Valeant, Paulson lowered his position in GLD, Pershing exited Actavis, Soros bought TimeWarner, Facebook and Dow.
If you’re feeling the pain of the Canadian equity markets, these comments might explain. According to Scotia Capital’s strategist, on a market cap basis, the TSX is down 9.2% year-to-date and 21% year-over-year. However, the difference between this performance and the equal weight is -4.2% and -18%, year-to-date and year-over-year, respectively, is the widest in 15 years (Nortel?). Today, this reflects the weight and performance of Valeant. So if you own Valeant, you’re happy (or for that matter most everything else that isn’t energy, materials and even some financials). As for pain, breaking down the Dow Jones can show how skewed performance is this year. The index is down about 3% on the year but there are big winners (United Health, Nike and Home Depot) but there are nine components down more than 10% YTD including Intel (-20%), Dupont (-23%) and Chevron (-23%) although the latter did break a 15-week losing streak last week. Breaking into the top ten in terms of performance, and beating the market, is McDonalds (+6% year to date). For reference in 2014, the best performing stock YTD was Intel (+31%).
For the week, the big stories will centre around the consumer and retail sales. In Canada,August 21st will see retail sales for June (estimate +0.2%). In the U.S., we’ll get a slew of companies reporting including WalMart, TJX and Home Depot tomorrow with Target, Lowes, American Eagle and Staples (among others). The big industrial name for the week will be Deere on Friday. The big corporate story this morning is Liberty Interactive (owner of QVC) buying Zulily (ZU) for $18.75/share which is a 49% premium to Friday’s close. As well, Jeff Bezos reacts to the New York Times description of how Amazon treats its employees – he says he’d quit the Amazon described in the article noting also that he doesn’t recognize the Amazon described in the article.
The week will likely continue volatile as the street waits for the Fed in September (last month’s FOMC meeting minutes will be released on Wednesday). The futures calculated probability of a hike in September remains a coin toss although most strategists would say it is a done deal. In other economic data, Japan’s economy contracted in the second quarter, but at a slightly less aggressive pace than the street had been expecting.
From analysts this morning Trican downgraded to sell at BMO (new $2 target), GDI integrated downgraded to Hold at TD ($21 target). Lots of downgrades to hold on the street including Cisco (at Morgan Stanley), Fresh Market (at BMO), Micron (at Wedbush). Imperial Metals upgraded to buy at M Partners with $12.50 target.
On BNN today, we’ll try to get to the heart of the oil story in Canada and the world. If you’re wondering why gasoline remains at such a high price relative to the collapse in crude,
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