On Monday, the S&P 500 rose 0.1% but Toronto fell 1.5%.
Canadian Western Bank fell 4.2% to $24.41. In part, this was likely due to a decline in oil prices which briefly dipped below U.S. $50. Also it may have been due to the overall decline in the Toronto market. It may be that “the market” suspects that Canadian Western Bank will face large loan losses. At last report, the Bank was not expecting that to happen. Canadian Western Bank actually has a very long history of earning money literally every day. Each day they accuse more interest income than they do interest expense. I will be holding firm to my usual practice of buying on dips. (I added to my position today) Unless the Alberta economy is in for a major economic down-turn, Canadian Western Bank will be a more valuable company in the years ahead. I note that house prices have not budged much to the downside in Alberta.
AutoCanada fell 4.8% today. This again could be due to a general fear of all things Alberta.
Canadian National Railway reported higher-than-expected earnings growth today. However that was largely due to the benefit of the lower dollar as U.S. earnings are translated back to Canadian dollars.
The two consumer-driven load categories auto and intermodal both had increased car loadings.
All five commodity load categories had lower car loadings (grain, coal, petroleum, metals and forest products)
While the commodity sector is weak, the consumer sector has not gotten the memo.
The question remains, will consumer consumption decline or at least fail to grow in the next six months?
I have been taking a look at Valeant Pharmaceuticals. It may be sour grapes on my part for not owning it, but I don’t like some of what I see. They seem to be very aggressive in adding back items to arrive at what they call cash earnings per share. They have a stated goal of getting the stock price higher. That might seem good but might not be so good it if the stock price is pushed up higher than is justified. Overall the stock is too rich for me. Not because it over $300 which matters not at all, but because I am not sure the earnings justify the stock price. However, I have more reading and analysis to do and so I have no actual rating on the stock at this time.