April 19, 2021

Markets were moderately negative on Monday as the S&P 500 fell 0.5% and Toronto fell 0.8%

Shopify was down 5.2% and Constellation Software fell 3.6%

Melcor Developments was down 3.15%.

Melcor of course benefits from higher single-family home starts in Alberta. Unfortunately, Alberta was left rather behind in terms of the national jump in single family home starts for March which were reported today. Nationally single-family home starts were up 31% year-over-year. This was driven by a massive 44% gain in Ontario. But the gain in Alberta was only 5%. Better luck next month? March is not a peak month for housing starts. Perhaps April will show a better picture for Alberta.

In better news for Melcor, oil prices are higher with West Texas at U.S. $63.74.

The Budget…

Lots more borrowed money. Luckily we are in some strange world where massive government borrowing does not seem to lead to higher interest rates. Somehow, there is still a great willingness to lend to governments at paltry rates.

The budget contained no new or higher taxes on investors or corporations save a bit of luxury taxes on vehicles over $100k and similar things.

The budget did contain continued subsidies to businesses for wages and rent. This will help small businesses and will also be a benefit to RioCan and the Melcor REIT for example. 

All-in-all, the market will not likely react negatively to this budget.


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