Tuesday was the second day in a row of headline-grabbing losses in the markets. The DOW was down 879 points or 3.25%. The S&P 500 was down 3.0% and Toronto was down 2.0%.
Some of the bigger losses included: Aecon Group Inc. – down 3.6%, Apple Inc. – down 3.4%, Shopify – down 5.0%, and FedEx down 6.0%, Visa Inc. – down 5.2%, America Express – down 5.7% and CRH Medical – down 8.0%.
Interest rates dropped and the U.S. ten-year Treasury yield fell to a record low of just 1.3%.
I added just a few Canadian Tire shares today. I will be looking to deploy cash slowly if the markets keep declining.
After the close, Toll Brothers reported Q1 earnings. Depending how you look at it they were terrible or quite stellar. Earnings per share were down a whopping 46%. But Home Builders are relatively unique in that their quarterly earnings are driven by home deliveries that they contracted for an average of 9 to 12 months earlier. In this quarter their contracts were up 31% in units and up 28% in dollars. That means that an increase in earnings down the road is pretty much guaranteed. They may have another quarter or two of losses but earnings are almost certain to rebound sharply later this year due to the strong recent pace of signed contracts. The company has been buying back shares at a voracious pace, reducing the share count by 8% in this latest quarter alone! They paid an average of $40.73 per share. I am now quite tempted to add to my position in Toll Brothers.