May 6, 2015

On Wednesday, the S&P 500 was down 0.5% and Toronto was down 1.0%.

Agrium was one of the few stocks on our list that rose and it was up 3.2% to $129.01 This was due to the dividend increase and the increase came despite a projection that earnings will be somewhat lower than previously expected. I like the company but would not be a buyer at the recent price.

Oil prices (which are measured by the next month’s price on futures markets – which tend to be somewhat lower than the spot physical price of the moment)┬áhave risen recently. In addition the discount for Alberta heavy oils in relation to West Texas has fallen. Despite this the Alberta oils sands companies were generally falling this week and today and most other Alberta stocks were down more than the overall markets. I suspect there has been some selling related to the NDP victory in Alberta. I am not sure that is rational in the face of higher oil prices. On that basis, I modestly increased my position in Canadian Western Bank and in the oil sands ETF CLO today.

Longer term interest rates in the U.S. are up noticeably in the past couple of week. Shorter term rates such as six months and one year have not increased. Still, the move in the longer term rates may suggest some hint of a modest return to higher rates, although there is no sign that that any increase will be more than quite modest.