May 26, 2022

Thursday was a strong day in the markets as the S&P 500 was up 2.0% and Toronto was up o.7% 

West Texas Oil is at $114 U.S. dollars. That’s $146 Canadian dollars. Even with Western Canadian Select (a heavy oil) at $96 U.S. dollars (yes it’s discounted for more reasons than lack of pipelines) or $123 Canadian dollars, the money flowing into the Alberta treasury is massive. And the money flowing to  company bank accounts is even more massive.

Among the gainers today:

lululemon jumped 10.3%.

Toll Brothers was up 4.0%.

Costco was up 5.65% but then was down modestly after-hours after it reported earnings. Its earnings topped estimates but its gross margins were down 1.0% due to inflation. 

Canada reported March retail sales. What I took note of was that volumes were down 1% versus the prior month, seasonally adjusted,  and certain discretionary categories were down. 

Electronics and appliance stores were down 10.7%

Building material and garden equipment and supplies dealers were down 7.7%.

Convenience stores were down 9.2%.

Sporting goods, hobby, book and music stores were down 6.9%.

One month does not make a trend but it seems to me that if food and energy prices are way up then consumers have to cut back someplace. These declines did not seem to make the news today and so we see how it develops over the next few months. I would think that in this current month of May many consumers have no choice but to cut back to offset the higher cost of gasoline. 

 

 

 

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