On Thursday, the S&P 500 was up 0.8% and Toronto was up 0.5%.
American Express was up 5.9% after reporting Q1 earnings.
Stantec was down 2.4% and remains a company that I would Buy at this price. After the close SNC Lavelin announced a huge acquisition of U.K. company. This would seem to indicate that engineering services companies like Stantec are attractive to institutional investors.
Linamar was up 2.5%.
Trump increased his rhetoric against Canada today. Trump is likely aware that academics and economists believe that trade results in win/win situations where the populations of two trading partners can BOTH be better off (although not all citizens benefit and some are harmed greatly). But Trump is even more aware that his view of trade as a win/lose game get votes. He knows that protectionism gets votes. I would be very worried if I were a company that produced a product in Canada for sale mostly to the U.S.
The fact is that trade has never been as important to the U.S. as it is to Canada. It is important to the U.S. but I believe trade accounts for something like 12% or so of U.S. GDP while the figure is over 30% for Canada.
WestJet announced today plans to start a new ultra-low cost division. It seems to me that passengers are getting exactly the airlines that they vote for with their wallets. A lot of passengers will put up with very cramped planes with zero service as long as it is cheaper. The Airline business is an exceedingly tough business because most customers have no loyalty and simply choose the cheapest possible seat on every flight they book. And the various carriers have a history of competing viciously on price. Even when there are just two competitors on a route they have constant seat sales and such. A lot of new airlines have attempted to start in Canada only to be driven out by price competition in the industry. As one of the latest examples, I don’t particularly expect NewLeaf to last. How these low-cost carries expect to survive while often charging fares that are less than a cost of a taxi from downtown to the airport is beyond me. I understand it has worked in Europe. I don’t know how and I would not be eager to fly on an airline that charges under $100 for a flight. Do we really want pilots paid minimum wage or bare minimal wages or something like that?
Coincidentally, Statistics Canada reported today that the average base domestic fare in Canada is $174. That’s the average including first class and business class. Coach airfare in this country is actually pretty cheap.