A roundup of what The Globe and Mail's market strategist Scott Barlow is reading today on the Web
The Canadian trade delegation has presented its opening salvo ahead of NAFTA re-negotiations, but I strongly suspect there will be a lot of twists and turns before a deal is signed. Trade and foreign policy are the two areas where the U.S. president can act without a lot of legal restraint and, to put it charitably, his actions to date have not been overly predictable.
"Trump, NAFTA and Canada's mostly reasonable wish list" – Report on Business
"The Most Over-Hyped U.S. Trade Deal Is About to Get a Makeover" – Bloomberg
"Why Canada has a lot to lose in the NAFTA renegotiations" – Macleans
"Nafta exit will be 'destructive' for US, warns Cargill boss " – Financial Times
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BMO economists describes a sharp fall in Canadian home prices as "almost entirely a Greater Golden Horseshoe story,"
"Toronto (-41%), Niagara (-28%) and Hamilton-Burlington (-24%) have, not coincidentally, recorded the deepest sales declines in Canada versus this time last year … sales in the Greater Golden Horseshoe area (impacted by recent policy changes) were down 35.5% y/y, while the rest of Ontario was down a much tamer 9.6% y/y. In other words, buyers are still firmly in control. Indeed, benchmark GTA prices posted their biggest monthly decline in 17 years of history, down 4.6% in July alone, leaving the year-over-year rate at 'just' 18.1%"
"@SBarlow_ROB BMO on home sales: "sales in Greater Golden Horseshoe area were down 35.5% y/y, while the rest of Ontario was down a much tamer 9.6% y/y" – (research excerpt) Twitter
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Apple Inc. raised $2.5-billion Canadian dollars in a seven year bond offering yesterday at about 80 basis points above domestic government bond yields. The issue does represent a short position on the loonie for Apple's balance sheet but it doesn't concern me that much. The company's finance department was likely looking to diversify away from U.S. dollar debt, and Canadian dollars looked like a better deal than euros of yen.
"Apple takes $2.5-billion step into maple bond market" – Streetwise
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I mentioned yesterday that I was looking at U.S. corporate bonds as a leading indicator for equity markets and a cash raise by Amazon provides further reason for close attention,
"[Amazon is] a much better story for equity investors than debt buyers, who ostensibly are concerned with hard numbers, like continuing profits. From an operating perspective, Amazon continues to post notoriously puny profits, especially relative to Wall Street's hopes… this company's debt is rated near the lowest rung of investment grade by Moody's for a reason. It's somewhat risky, especially when considering a four-decade horizon that's pocked with unknown disrupters and technological advancements."
"Amazon is peddling its latest bonds with an equity story" – Report on Business
"Amazon Enlists Bond Market in Its Quest for Grocery Dominance" – Bloomberg
"Amazon seals $16bn corporate bond sale" – Financial Times
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Tweet of the Day: @chris1reuters World #oil stocks to build 100,000 bpd this year and 700,000 bpd in 2018, says @tchiling @BNPParibas @IEA #OPEC #OOTT #gas #shale #Nigeria " – (chart) Twitter
Diversion: "How your mind protects you against hallucinations" – Science
Scott Barlow