On Tuesday, markets were generally to the downside. The S&P 500 was down 0.4% and Toronto was down 0.6%.
Toll Brothers was down a hefty 5.5%. But given big gains last week it remains somewhat higher than it was a week ago. Perhaps a bit of a tug of war between its own great results and the headwind of high interest rates.
After the close, Enbridge announced a large planned acquisition of U.S. natural gas regulated utilities. To fund this it announced it will raise $ billion by selling shares at $44.70. That compares to today’s closing price of $48.16. Accordingly, the stock is down 6.3% in U.S after-hours trading. This stock price drop is basically par for the course. When a company wants to sell a massive amount of shares it is not typically going to be able to do so at the current market price. I have a positive view of Enbridge and so i am inclined to trust their judgement. I put in an “expression of interest” to buy a modest amount of shares through this offering at $44.70.
Tomorrow’s (Wednesday’s) excitement for the Canadian market will be the Bank of Canada’s interest rate announcement. Consensus appears to be that they will not raise rates this time. What will be important is to read the tea leaves about whether the Bank of Canada is done raising rates or not.
It’s interesting that they will come out with this major news during the trading day. They seem to be clueless about the fact that releasing important financial data during trading hours is unfair to retail investors. Corporations are required to release outside of tracing hours specifically in order to give time for share prices to react in a step fashion. The FED and the Bank of Canada appear to think they are too important to play by such a rule. Or they are simply that clueless. Fairness to retail investors is exactly why Warren Buffett goes so far as to release Berkshire’s earnings on Saturday’s. That gives maximum time for the share price to react in a step fashion with no trades at prices that fail to reflect the news.