March 21, 2018

On Wednesday, the S&P 500 was down 0.2% and Toronto was up 0.4%.

Linamar was up 2.5% to $73.52 after some positive news on the NAFTA front that the U.S.A was dropping its proposal that all cars coming into the USA under free trade arrangement would need 50% American content to qualify for free trade status.

BHP Billiton was up 3.6% (the BBL version) and 2.6% (the BHP version).

Couche-Tard slipped another 2.1%

Toll Brothers was up 2.1%.

West Texas Oil futures are trading at just over $65. That is positive for Alberta… if it lasts.

The U.S. FED raised overnight lending rates by 0.25% to a target range of 1.5 to 1.75%. Many (uninformed) people had said that the FED could not raise rates due to the damage it would cost – especially to U.S. government interest charges. Yet rates have gone up six times since late 2015 when the target range was 0 to 0.25%. The markets were apparently a bit relieved that the FED signaled it will raise only twice more this year. But they apparently signaled another three hikes in 2019 and some in 2020 as well.

The Canadian dollar was up approximate a full U.S. cent today or 1.3%. This was apparently related to positive news on the NAFTA front. This goes to show how very difficult it is to predict the exchange rate. I recently converted some U.S. dollars to Canadian at rates better than had existed in some months. I had been patiently waiting and the patience paid off in that case. But I also sat on some more waiting to see if the Canadian dollar would drop even more. That was perhaps a mistake. If you have currency you want and especially if you NEED to convert, it is probably best to just to just do it rather than get cute hoping the rate will improve. Unlike the case for most stocks there is no particular valid expectation that currency will move in a given direction over time. (Non-valid expectations are another matter.)

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