On Wednesday, the S&P 500 was down 0.2% while Toronto rose 0.2%
There was not much movement of note in the prices of the stocks on our list but AutoCanada rose 2.9%.
A headline today was that housing starts in April jumped 23% to an annualized 235,000 housing units. And even single family starts were up 6%. Well that sounded good. But really it was too good to be true. These gains were versus March and volatility makes such a month over month comparison rather unreliable. CMHC gave top billing to saying that the trend line was up just 2% to 206,000 units. That’s a far cry from a 23% increase.
On a year-to-date basis housing starts are down 8% and single detached are down 29%!
In Alberta housing starts are down 15% year to date and single detached starts are down 29% (and were down 25% versus April 2018). The weak numbers for Alberta are not a surprise.
Melcor Developments reported Q1 results after the close. As expected, it was a weak quarter. Its results are inherently lumpy due to sales of commercial land in Canada (mostly Alberta) and of residential lots in the U.S. which can be high in one quarter and then at or near zero in another quarter. Residential building lots in the U.S. tend to be sold in larger quantities to fewer builders versus Canada so that some quarters will have no sales (like this one) and other quarters have substantial sales. Since a weak quarter was expected, the stock may not react much. It’s property development division continues to be strong. Despite the slow economy in Alberta a fair amount of development continues. Melcor develops property only after getting sufficient leases in place ahead of construction.