August 11, 2022 8am eastern

Wednesday was another strong day in the markets with the S&P 500 up a hefty 2.1% and Toronto up 1.6%.

Some will argue this shows the benefit of staying invested while others will claim it’s a dead cat bounce. For most people a balanced approach is probably best. Stay invested but include cash and fixed income to cushion possible equity losses and provide funds for bargains and rebalancing.

Many stocks were up 2 to 3% or so and Shopify bounced up 9.7%.

This morning Canadian Tire reported earnings. The headline is lower earnings than last year. Normalized earnings were down 22% blamed on higher expenses including higher foreign exchange costs. But same-store sales excluding petroleum were up 5%. This demonstrates strength though it was likely down a little in volume considering inflation. There was also higher credit card write-off and that is something to watch. As of now the stock appears set to open down at $166 from $171. As an owner, I will not be selling and in fact would consider adding (if cash available) if it happens to dip below $160. I think it remains a good long term hold. We shall see what the analysts say today. Will they focus on the positive or the negative?

Metro Inc. also reported higher sales this week. But given inflation it appears their volumes were down. I suspect Costco and probably Walmart are picking up volume. Metro said people are switching to its discount brands versus its traditional stores.

AutoCanada has reported record second quarter results.

Stantec also just reported higher-than expected earnings.

Linamar reported lower earnings.

So lots of news to move individual stocks today. 

Melcor Developments reports after the close. It is frustrating that this has not been a higher profit business. Everywhere I look (traveling in the Maritimes currently) I see lots of development and one would think that someone made a lot of money on those developments. But it is a cyclical business and land development ties up money for years such that a big gain on sale is needed to create a double digit ROE over the entire period from land purchase through development and sale.

Scroll to Top