March, 2016 11 am eastern

Stocks are mostly down modestly to start the week.

Statistics Canada has reported new auto sales for January.

For Canada, new auto sales were up a hefty 9.2% versus January last year. (I don’t know if weather played a role in either year).

Ontario was up 18%. This supports the notion that the Ontario economy is strong.

B.C., another strong economy, was up 11%.

In recession-ridden Alberta, new auto sales were down 11%.

Given the low expectations for AutoCanada I would view these results as positive. Certainly AutoCanada’s sales with a heavy (43%) concentration in Alberta must be running lower than the prior year but given that they have 19% of their dealers in B.C. and have a small percentage in Ontario, the situation certainly does not look disastrous. AutoCanada will report earnings this week. I believe they are a well-managed company. The outlook may be more important than the recent sales.

Last week Statistics Canada reported that: “Canada produced 20.2 million cubic metres of crude oil and equivalent products in December, up 3.5% compared with the same month in 2014.” To my mind, the increased production shows that the Canadian oil and gas industry collectively has been completely unable to curtail production in response to low prices. This is not surprising. Every individual company wishes that others including OPEC would curtail, while they themselves find that they need to pump more to pay their bills. It may take bankruptcies to curtail production. But reduced capital spending also eventually leads to production declines.

This morning Teranet released its latest figures for sale prices of existing homes. Prices were up 3.2% versus January in Vancouver. Most other markets were little changed with Toronto and Edmonton about unchanged and  Calgary down 1.2% in February versus January.