(Apologies as this post was meant to be published Thursday evening and I seem to have run into a technical issue)
On Wednesday, the S&P 500 was down 0.4% and on Thursday it declined 0.7%.
Toronto was down 0.5% on Wednesday and a further 0.7% on Thursday.
(I believe I wrote a comment here on Wednesday including mentioning the 7% or so gain in AutoCanada as it purcahsed a dealership in Montreal but I must have failed to upload the comment).
The wonder is that the declines were not steeper given what seems like escalating tension in the world and also continued developments the inquiries into the Trump campaign / Russia ties. I feel good having about a 30% allocation to cash which I can deploy if bargains arise.
Oil at $52.91 remains a positive factor for Alberta.
Canadian Western Bank is down to $28.33 and I am tempted to add to my already large position at this price. Linamar and Stantec are also names that I would be tempted to add to. But I am also inclined to just maintain my cash position.
In terms of interest rates, the Bank of Canada is not signalling any near-term rise. But it is often said that the bond markets can move rates higher independently of central banks. So far, this is not happening in 2017. The yield on the government of Canada five year bond is 1.04%. That is higher than the levels around 0.75% and sometimes as low as 0.50% that prevailed in 2015 and through October 2016. But spikes up as high as (a still low) 1.31% have failed to hold and the bond market does not appear to be signalling increased interest rates. I suspect interest rates will be somewhat higher a year from now but the market does not appear to be pricing in much of a rise. The rate reset shares seem to react somewhat slowly to the changes in the 5 year Canada yield. At the moment the rate reset preferred shares seem likely to fall if the five year Canada stays at 1.04%.
Statistics Canada reports that oil production in Canada is at record highs. With record production, the economy in Alberta is stronger than might be expected with oil prices down so much since 2014. When oil prices decline provincial royalties and income taxes are almost immediately very hard hit. And corporate profits are hard hit. But wages and employment are not as hard hit if production continues to be strong.