June 10, 2018

On Friday, the S&P 500 was up 0.3% while Toronto was up 0.1%.

AutoCanada recovered 3.2%.

Dollarama recovered 3.5%

Toll Brothers was up 3.0%

The trade spat between Canada and the U.S. appears to be at risk of developing into a significant trade war as well as a diplomatic spat (to say the least). It’s hard to know what the implications are but they are not good. For now, markets may not react much but they likely will if further tariffs are imposed.

In other news, CMHC reported housing starts for May. These are of interest regarding Melcor. Single family starts in Alberta were down 4% which is obviously somewhat negative. But single family starts were up 5% in the Edmonton area which is where Melcor has been more active. It’s hard to say how these figures relate to Melcor’s lot sales in Q2. I don’t know how far in advance of a housing start that lot sales to developers typically occur. The actual starts may be linked more closely to the time that Melcor gets paid for the lot sale as opposed to when it makes the sale.