Strategists unfazed as US$47 billion vaporized from Canadian stocks - BNNBloomberg.ca

With global stocks roiled by the U.S.-China trade brawl and a dimming outlook for global growth, strategists say one market should hold up better than most -- Canada.

The benchmark S&P/TSX Composite index has lost 0.9 per cent since the end of July compared with a 3.2 per cent slide in the S&P 500. While that’s wiped out about US$47 billion in market value, Canadian stock watchers remain relatively upbeat.

They have reason:

• The Canadian economy expanded for a third-straight month in May, reinforcing the view that the Bank of Canada can remain on the sidelines for now, though bets of a rate cut have risen along with those at other central banks
• More than two-thirds of companies that have reported earnings results have beat estimates, according to data compiled by Bloomberg
• The rally in the price of gold has lifted shares of miners, which make up almost 12 per cent of the benchmark index  

Global investors have become “too short-sided, too reactive, too fearful,” said Brian Belski, chief investment strategist at BMO Capital Markets.

Profit at companies in the S&P/TSX Composite Index has hit a record high and Canada’s “fortunes” are tied to the hip with the U.S. economy, which remains solid despite its trade issues, he said.

“We remain very bullish on Canada,” said Belski, who has a 17,000 year-end target for the key equity gauge, up about 4.5 per cent from Wednesday’s close.

A rally in commodity prices, economic and earnings growth, bullish sentiment about the burgeoning cannabis industry and its strong correlation with the U.S. stock market propelled Canada’s benchmark index to a record high in April. On Wednesday, the market snapped its longest losing streak since September 2018 to end up 0.7 per cent at 16,265. It’s still up 14 per cent for the year, compared with 15 per cent for the S&P 500.

The nation’s economy has strengthen since the beginning of the year, the labor market has been on a tear and Canada’s real estate market -- a bellwether of the economy -- has seen signs of stability with strong prices and increasing sales in major cities like Toronto.

To top it off, inflation of two per cent ties with the U.K. for the highest in the Group of Seven and right at the Bank of Canada’s target.

Technicals argue caution.

The intermediate moving average convergence divergence momentum indicator is trending on a sell signal, suggesting that the current correction needs more time to play out, according to Tina Normann, technical research analyst at Eight Capital.

“Therefore look for limited upside toward the 16,300 zone on any near term rally,” she said in a note.

Investors would need to see stabilization in bond yields before committing capital to the market, she said and added that a more attractive entry point will likely present itself in mid-September.

Canada’s 30-year bond yield reached a record low of 1.39 per cent on Wednesday and one segment of Canada’s government-bond yield curve reached its most inverted level since 2000 earlier this week as traders added to bets the nation’s central bank will wind up cutting interest rates. The Canadian Imperial Bank of Commerce moved forward its call for a Bank of Canada rate cut to the first quarter of 2020 from the second quarter on Wednesday.

So where can investors put their money north of the border?

“In light of stock market weakness, we believe that the positive attributes of regulated utility stocks could be attractive to a number of investors,” said Robert Kwan, an analyst at RBC Capital Markets said in an Aug. 7 report.

The S&P/TSX Utilities Index has climbed 23 per cent this year and investors flocked to safer sectors. “The allure of regulated utility stocks is driven by no material exposure to trade wars (e.g., no China exposure),” Kwan said. They also get a tailwind from environmental, social and governance considerations with respect to investment fund flows and long-term interest rates that are within striking distance of record lows, he said.

--With assistance from Michael Bellusci and Kristine Owram.

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August 09, 2019 at 06:38PM

Elizabeth Warren calls for higher taxes, NRA investigation as part of gun control plan - Fox News

Democratic 2020 hopeful Elizabeth Warren on Saturday unveiled a sweeping gun control proposal that would see higher taxes on gun manufacturers, waiting periods for guns and an investigation into the National Rifle Association (NRA).

The Massachusetts senator's proposal comes a week after the two mass shootings in El Paso, Texas and Dayton, Ohio that left more than 30 people dead and dozens injured. Warren begins her plan with a goal of dramatically reducing gun deaths and then proposing policies that would help achieve that goal.

WARREN SURGES, SANDERS SLIPS, BIDEN STEADY IN NEW POST-DEBATE POLL IN IOWA

“In 2017, almost 40,000 people died from guns in the United States. My goal as President, and our goal as a society, will be to reduce that number by 80 percent,” Warren said in a Medium post announcing the plan. “We might not know how to get all the way there yet. But we’ll start by implementing solutions that we believe will work.”

Warren proposes executive action to “rein in an out-of-control” gun industry and hold manufacturers accountable for gun violence. Those actions include background checks, extending bulk sale reporting requirements and raising the minimum age for purchase on certain guns.

She also promises to investigate “the NRA and its cronies.”

“The NRA is accused of exploiting loopholes in federal laws governing non-profit spending to divert member dues into lavish payments for its board members and senior leadership,” she says. “I’ll appoint an attorney general committed to investigating these types of corrupt business practices, and the banks and third-party vendors — like Wells Fargo — that enabled the NRA to skirt the rules for so long.”

Warren goes on to propose a law that would impose criminal liability and jail time for gun company CEOS if their company “is found guilty of a crime or their negligence causes severe harm to American families.”

Her plan also says that a President Warren would push to end the Senate filibuster to make it easier for Congress to pass a package of gun reforms that she says she would sign within the first 100 days of her presidency.

Part of that package would include as assault weapons ban, a ban on “high-capacity ammunition magazines” and a ban on “deadly gun accessories.” Her legislation would also increase taxes on gun manufacturers, including raising taxes to 30 percent on guns and 50 percent on ammunition “to reduce new gun and ammunition sales overall and to bring in new federal revenue that we can use for gun violence prevention and enforcement of existing gun laws.”

Other proposals including prohibiting anyone convicted of a hate crime from owning a gun, and passing extreme risk protection laws to allow a temporary restriction of gun access for those in crisis or at higher risk of harming themselves or others.

The plan comes as Warren heads to Iowa with a number of other 2020 hopefuls, where they will be speaking at a gun safety forum in Des Moines.

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Typically gun control is an intensely partisan issue, but in the days since the shootings, President Trump and Senate Majority Leader Mitch McConnell, R-Ky., have expressed their openness to passing enhanced background checks into law.

“Guns should not be placed in the hands of mentally ill or deranged people," Trump tweeted Friday. "I am the biggest Second Amendment person there is, but we all must work together for the good and safety of our Country. Common sense things can be done that are good for everyone!”

Fox News' Paul Steinhauser contributed to this report.

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https://www.foxnews.com/politics/elizabeth-warren-taxes-nra-investigation-gun-control

2019-08-10 15:05:46Z
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The Trade War is Not a Game, it is Not Deal or no Deal - Kitco News

Editor's Note: Get caught up in minutes with our speedy summary of today's must-read news stories and expert opinions that moved the precious metals and financial markets. Sign up here!

Today as President Trump was leaving the White House and headed to New York for another fundraiser he said that there are open communications between the United States and China, and that we are talking although “We are not ready to make a deal. But we’ll see what happens.”

He also discounted the importance of the next round of face-to-face negotiations which is planned begin in September. This is evident when he told reporters that “it is fine if talks scheduled for September are canceled”. The cancellation of the upcoming negotiations in September could have a profound and negative impact on the global economy in that it will increase the probability of new tariffs of 10% being imposed on the remaining $300 billion of Chinese imports. These new tariffs are set to go into effect on September 1st. His words to reporters underscored his ambivalence to a quick resolution to the trade war saying, “We'll see whether or not we keep our meeting in September. If we do, that's fine. If we don't, that's fine."

Recent actions by President Trump have created a major escalation in the trade war. It is now become a tit-for-tat war of words, and more importantly war of actions, as each side retaliates against the actions of the other side. On Monday China retaliated by canceling the planned purchase of agricultural goods imported from the United States. This occurred during the week when the United States Treasury Department designating China as a currency manipulator. This was followed by Trump announcing that the United States government will no longer have any dealings with the Chinese telecom giant Huawei.

These most recent actions have effectively ended the cease-fire that was agreed upon by President Trump and the General Secretary of the Central Committee of the Chinese Communist Party; Xi Jinping during the most recent G-20 meeting, held in Osaka Japan.

According to many new sources including the Washington Post President Trump’s recent statements and actions are in conflict with advice of his aides. According to the Washington Post “Trump is trusting his instincts and ignoring the advice of his aides regarding issues surrounding the trade conflict with the world’s second largest economy, the report said, citing five people briefed on the action.”

Although the Dow Jones Industrial Average recovered from a tremendous drop in trading today, the index still closed off by almost 100 points, this following a volatile week with extreme selling pressure due to the trade war’s lack of any potential for a quick resolution. At the same time, we have seen both gold and silver respond as both metals have moved to a six year high earlier this week. Gold futures continue to remain above $1500 per ounce, strengthening the resolve that the key psychological level of $1500 is becoming an area of strong support.

Considering that gold futures basis, the most active December contract opened at $1451 on Monday and settled today up $0.10 at $1509.60 is an indication that market participants are re-balancing their portfolios as they seek the safety found in the safe haven asset class. Based on actions taken this week by both China and the United States one thing seems clear as far as a resolution to the long and extended trade war; and that is that there is - No Deal.

For those who would like more information, simply use this link.

Wishing you as always, good trading,

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August 10, 2019 at 06:04AM

Inter Pipeline confirms takeover offer on regulator request after stock halted - Global News

Inter Pipeline Ltd. confirmed Friday afternoon it received a “proposal” to purchase the company, in a statement issued at the behest of regulators a few hours after executives refused to discuss the matter on a conference call with analysts.Story continues belowAt 3 p.m. EDT, about an hour after its stock was halted from trading pending news, the Calgary-based midstream company issued a brief statement in response to a request from the Investment Industry Regulatory Organization of Canada, or IIROC, confirming the offer had been made, but giving no details about the date, price or the identity of the bidder.“While it is the company’s policy not to comment on market speculation or rumours, Inter Pipeline confirms that it received an unsolicited, non-binding, conditional and indicative proposal to purchase the company,” the statement said, “but it is not in negotiations with any third party, nor is there any agreement, understanding or arrangement with respect to any such transaction.”It added it won’t say any more about the matter unless it determines that disclosure is warranted or legally required.An article in the Globe and Mail on Thursday quoted unnamed sources as saying Inter had rejected a $30 per share cash offer from an unidentified bidder. The story was linked by analysts to a nine per cent Inter stock price surge to $23.64 on the Toronto Stock Exchange on Thursday.READ MORE: Oilsands pipeline firm Inter Pipeline posts record Q2 net income of $260MWatch below: Some Global News videos about Canada’s energy sector.3 major oil firms ask voters to support energy industry

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August 10, 2019 at 05:22AM

Canada's jobs machine gears down on private-sector hiring plunge - BNNBloomberg.ca

Waiting for baby boomers to die is not effective housing policy - TVO

A few years ago, my neighbour died. For most of the preceding decade, we’d done the usual Toronto thing: acknowledged each other politely, usually through an exchange of nods, and courteously asked for or provided help when needed. His death wasn’t unexpected — he was elderly, and his health had obviously been failing for some time — but it was sad. Sadder still was the fact that, while his friends and family had obviously tried to care for him, he had never moved out of the home that shares a wall with ours. I try not to assume too much about other people’s stories, but what I did know suggested that his last years would have been more comfortable if he’d been living in a home better suited to his needs.

I thought of him again this week, after the Canada Mortgage and Housing Corporation released a report stating that GTA residents aged 65 and older are staying in their homes longer — and that that’s a problem. As the CMHC notes, it’s a complicated problem because it’s the result of a bunch of otherwise promising trends: seniors are generally healthier, wealthier, and getting more supports to help them age in place. Those may all be good things, but, according to the CMHC, they come with a catch: the plan was that the “demographic shift” of baby boomers aging into their autumn years would free up the homes they’re currently occupying. But that hasn’t happened.

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“The conventional view is that this demographic shift will likely help to increase the supply of housing to younger homeowners, since seniors typically downsize or leave homeownership,” the CMHC report reads. As the flow of resale homes is slowing, though, “ seniors might not be freeing up the expected number of dwellings for younger households thus limiting supply.”

Now, in one sense, this is a temporary hitch: absent someone finding the Holy Grail, we will all meet the Reaper’s blade someday. But when John Maynard Keynes memorably said, “In the long run, we are all dead,” he explicitly meant that policymakers need to do more than just wait for the economy to return to balance on its own.

This idea that a great downsizing would happen in the near future held some real sway in official circles — staff in Kathleen Wynne’s Liberal government told me that it was one reason they were exercising caution on the housing-policy front. The fact that it’s not happening the way it was supposed to is just the latest example of the housing system changing in unpredictable ways.

In his series on housing, TVO.org’s David Rockne Corrigan has shown that the housing system can change faster than policy. Nowhere is that more evident than in Prince Edward County, where, over the past decade, the share of homes priced under $300,000 has fallen from 78 per cent to 18 per cent. This is partly the result of well-heeled retirees decamping from Toronto for a part of the province where a bucolic setting is (or was) still relatively affordable. But some of it is also due to people turning homes into virtual hotels: the Airbnb effect. The effects of short-term rentals on the housing market are complex, but, for our purposes, it’s enough to say that a company that barely existed a decade ago is now very much a contributing factor in our housing chaos.

But it’s not just expats from the GTA, and it’s not just Airbnb. Kenora is very nearly as far as you can get from Toronto and still be in Ontario, and there, too, Corrigan found a community that’s been taken by surprise by a dire need for affordable housing.

As I’ve noted before, in relation to Toronto, our timid attempts to make change through policy have done little to address the housing problem. The only thing governments of all stripes and at all levels are doing comprehensively is not enough. In light of this week’s CMHC report, I would add that part of the reason nobody is doing enough is that we’ve been slow to recognize that certain features of the system — like mortality itself — aren’t doing the same work they used to.

Our housing system is broken in ways it’s taken us too long to understand, and it won’t fix itself. We’re going to need aggressive policies from all three levels of government — policies substantially more aggressive than anything we’ve seen to date. And we’ll need approaches more creative than “wait for the baby boomers to die.”

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August 10, 2019 at 02:06AM

CannTrust shares swing wildly after auditor pulls endorsement of 2018 numbers - Yahoo Canada Finance