Analysts say oil freeze won’t help, markets want them to be wrong
Tuesday’s session started with a downbeat feel as analysts at Goldman Sachs said the latest oil price rally was overdone. It is also not alone in saying that an OPEC output freeze would do little to support the market, but despite the warnings hope persists.
That sentiment led to a renewed gain for prices with US crude and Brent rising more than 1 per cent as Iran gave signals that a cap on output may actually happen. Its effectiveness is still questioned.
The main TSX index gained as BMO reported better-than-expected quarterly results and tracked advances on Wall Street with gains for materials stocks. The Nasdaq hit a new record high.
Asian markets closed while oil prices were dropping and the Nikkei dragged on a stronger yen. European indexes gained as materials and banks rallied.
The S&P/TSX Composite Index closed up 16.58 (0.11 per cent)
The Dow Jones closed up 17.88 (0.10 per cent)
Oil is trending higher (Brent $49.84, WTI $47.98 at 4.10pm)
Gold is trending lower (1342.30 at 9.10pm)
The loonie is valued at U$0.7745
BMO earnings exceed expectations
Net income at Bank of Montreal rose 4 per cent in the quarter ended July 31 compared to the same period of 2015, beating expectations. The bank’s results showed profits of $1.25 billion with earnings per share up 3 per cent to $1.86.
Profits were strongest in the bank’s US personal & commercial banking operations (up 24 per cent to C$277 million) and BMO Capital Markets (up 18 per cent to C$321 million).
Canadian personal & commercial banking was up 1 per cent to $561 million. BMO set aside $257 million to cover bad loans, up $97 million from the same quarter of 2015.
Government takes largest share of Canadians’ income
Canadian families spent an average of $30,293 on housing, clothing and food in 2015, amounting to 37.6 per cent of their income but the largest share of income went on taxes.
The Fraser Institute says that when income, property, sales and other taxes are combined, the average family paid $34,154 last year. The figures were based on an average household income of $80,593 for 2015.
The study shows that the average family’s tax bill has increased 1,939 per cent since 1961 while housing costs have increased 1,425 per cent and food 645 per cent. Accounting for inflation, taxes are up 152.9 per cent.