On Wednesday, the S&P 500 was up 0.1% while Toronto was down 0.3%.
West Texas Oil is at $71.48. Unfortunately as BNN Bloomberg reported today, basically ALL the different grades of Canadian crude are selling at big discounts to the West Texas Price. They indicate that big discounts have opened up and widened substantially in recent weeks. Some of this could be temporary. More crude-by-rail is needed.
CN Rail was down 1.9% today. CN is expensive but will benefit from shipping crude.
Canadian Western Bank was up 1.45% possibly linked to the higher oil price.
TFI International was down 2.9%.
CRH Medical was down 5.8%. It remains up about 50% this year but is down about 13% from its recent 52 week high. It could certainly continue to be volatile.
U.S. housing starts were higher than expected in August at an annualized rate of 1.28 million versus an expected 1.24 million. That is positive for Home Builder stocks. Unfortunately home building permits fell to an annualized rate of 1.23 million units.
U.S. housing starts were running at over 2 million before the financial crisis which was apparently above the number of household formations. U.S. housing starts averaged roughly 1.5 million per year in data going back over 50 years. My understanding is that at about 1.3 million units, housing starts are below the level of new household formations. Therefore there is room for U.S. housing starts to increase to at least the 1.5 million level. Consider too that in Canada we have had housing starts running at over 200,000 for most of the years since about 2002. Considering the U.S. has ten times the population we might expect U.S. housing starts to be closer to 2 million especially considering their strong economy. The bottom line is that I feel good about the prospects for Toll Brothers.
Alimentation Couche-Tard has its annual meeting tomorrow, Thursday. I expect that they will try to get some (well-deserved) press around the fact that they are now Canada’s largest company by revenue.