May 20, 2018

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

Toll Brothers was up 1.8% to $43.18 which came after it had slipped under $41 earlier in the week.

Constellation Software was up 1.5% to $997.68. The stock seems expensive in relation to earnings but has continued to increase.

AutoCanada a rose 4.2% which is a welcome move but that comes after recent steep decreases. This is a company that now must convince the market that it can return to better profitability in Canada and that it can profitably run the recently acquired U.S. dealerships.

Couche-Tard was down 1.9%. It’s fiscal year ended on April 30 and I believe it will be July before it reports earnings. I would think it will report double digit earnings per share growth based on acquisitions. However volatile fuel margins can lower earnings growth in any given quarter. They are also spending to convert stores to the Circle-K brand.

On Friday, Statistics Canada reported the April consumer price index with a 2.2% year-over-year increase. If gasoline were excluded the average was up only 1.7%. This somewhat tame level of inflation caused market participants to lower their expectations for an increase in interest rates by the Bank of Canada.

Statistics Canada also reported retail sales for the month of March and new-car sales were strong that month. Possibly that bodes well for AutoCanada (which may be why that stock was up on Friday) although I don’t recall AutoCanada mentioning that its March sales were strong. Hopefully the strong new car sales have continued.

The Canadian stock markets will be closed on Monday but the U.S. is open and as of late Sunday evening it appears that the Dow is set to open higher by 223 points.