January 31, 2018

On Wednesday, the U.S. markets initially rebounded from Tuesday’s losses but were volatile. The indexes were negative in the afternoon before closing at a modest gain with the S&P 500 up 0.05%. Toronto was about unchanged.

CN rail was up 1.2%. Boston Pizza Royalties rebounded 2.0%. TFI Industries was up 1.4%. Fortis Inc. was up 1.8%. Linamar was up 2.5%.

Our penny stock, Ceapro, was up 6.6%.

Toll Brothers was down 0.9% to $46.58. This is now down from its recent high of $52.73. I had trimmed my large position selling some at around $45 in November and then more at $49.94 in December and $51.47 in January. With this decline, I am somewhat tempted to buy back some of what I sold.

Statistics Canada released data on Gross Domestic Product by industry for November and almost all sectors were showing good growth.

The Canadian Bankers Association today posted figures for 90 day delinquencies updated through November. Their figures are basically fore the larges six banks in Canada plus a couple of smaller banks (CWB, Laurentian Bank and Manulife Bank) . They do not include second tier lenders like Home Capital nor the credit unions. I find the delinquency figures, especially for Ontario to be literally unbelievably good. In Ontario the 90 day delinquency rate on mortgages is 0.09%. That isĀ  a record low in figures going back to 1990 (although 1990 also started out at just 0.11% in January of that year before rising rapidly to 0.70% by early 1992). A 0.09% delinquency rate means less than one in one thousand mortgages are more than 90 days past due. For a long time, I have been suspicious that banks legally “hide” delinquencies by making various arrangements to officially allow customers to change the terms of their mortgage. That might be quite appropriate but it could distort the delinquency figure. I also suspect that many home owners that would otherwise be delinquent simply borrow additional money from various sources to keep their mortgage current. If we get either a recession or a noticeable decline in home prices then I suspect these delinquency figures will rise. However, there is no indication that Canada will see anything close to the massive delinquencies that occurred in the U.S. around 2007.