Skip to main content

A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the Web

Bloomberg's Luke Kawa posted a chart showing that selling of the U.S.-traded MSCI Canada ETF has been the heaviest since the oil sell-off began in 2014.

On its own, this wouldn't be a deal – a bit of investor nervousness doesn't have to lead to a market sell-off, and could be a buying opportunity – but Societe Generale foreign exchange strategist Kit Juckes also noted that the loonie was the weakest major currency against the greenback over the past 10 days,

Story continues below advertisement

"the weakest currency of all over that period is the Canadian dollar. If anything, USD/CAD looks too low relative to short-dated yield spreads, at the same time as looking too high relative to oil prices (and too high on valuations but that won't matter). The Bank of Canada left rates on hold yesterday and the policy statement, while dovish, was no more so than universally expected. "

The list of potential reasons for the skittishness on Canadian assets includes a potential rate increase by the Federal Reserve (which would boost the USD against the loonie) , the continuing oil glut that threatens crude prices, and profit-taking on Canadian bank stocks.

"@LJKawa MSCI Canada ETF hasn't seen outflows like this since oil was cratering in late 2014" – (chart) Twitter
"SocGen on the CAD (via @kitjuckes )" – (research excerpt) Twitter
Related: "Cyclical or defensive stocks? How your strategy hinges on economic growth forecasts" – Barlow, Inside the Market

=====

The good news for domestic investors today is that yet another bank reported strong quarterly earnings and raised the dividend. This time it's TD,

"TD (TD.TO) said earnings per share in the first quarter ended Jan. 31 rose to $1.32, compared with $1.17 a year ago. On an adjusted basis, TD earned $1.33 per share. Analysts had on average forecast earnings of $1.27 per share during the quarter, according to Thomson Reuters I/B/E/S…TD increased its dividend by $0.05 compared with the previous quarter to $0.60 and announced plans to buy back 15 million of its common shares."

"TD closes big banks' earnings with profit beat, dividend boost" – BNN

Story continues below advertisement

=====

West Texas Intermediate crude price is 1.4 per cent lower at time of writing. There are two current issues for the commodity price at present. One, weekly U.S. Department of Energy reports on U.S. oil inventories continue to signal rising inventories. Two, crack spreads – the average amount of profits refiners make on each barrel of oil – continue to fall. Refiners are likely to buy less oil in the future as their profit margins decline.

"Oil prices under pressure after historical high for U.S. crude stocks" – Marketwatch
"Five Things You Need to Know to Start Your Day" – Bloomberg (includes energy commentary)
"@OilSheppard Opec has a crack problem: US refining margins tank, RBOB -2%. "Crude oil cannot rally against the gasoline crack," @petromatrix says #OOTT" – Twitter

=====

CNBC reports that U.S. insiders are dumping stocks at a frantic pace,

"Chief executives and other corporate insiders are selling stock hand over fist now that the quarterly earnings season is over, a report from Vickers Weekly Insider shows. Transactions by insiders are restricted around a company's report. 'Insider selling has jumped again, and this time to levels rarely seen,' analyst David Coleman wrote in Monday's note. In the last week, insiders' sale transactions on the NYSE outnumbered their purchase transactions by more than 11 to 1, according to Vickers, a publication of Argus Research. The 11.47 reading is 3.5 standard deviations above the mean, according to Coleman."

Story continues below advertisement

"Company insiders are dumping stock at levels 'rarely seen,' report indicates" – CNBC

=====

Tweet of the Day: "@SBarlow_ROB "This map shows the most popular routes for private jets" #finance #feedly businessinsider.com/knight-frank-w… " – Twitter

Diversion: "Classified documents reveal Canada's planned response to 9/11-style attack" – CBC

Report an error Licensing Options
About the Author
Market Strategist

Scott Barlow is The Globe's in-house market strategist. He is a 20-year veteran of Canadian investment banks, including Merrill Lynch Canada, CIBC Wood Gundy and Macquarie Private Wealth (MPW). He was a highly ranked mutual fund analyst for 10 years and then, most recently, the head of a financial adviser support team at MPW. More

Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at privacy@globeandmail.com.