Oil down 3 per cent, TSX dips
While Canada went to the polls Toronto’s main stock index closed lower Monday as oil prices dropped 3 per cent following weak GDP data from China; energy and financial stocks were punished. Valeant Pharmaceutical also declined on news that it would be reducing the pace of drugs prices in 2016.
Wall Street closed higher despite the lowered oil prices as earnings meant a narrow gain for the each of the three main indexes. The Nasdaq was the best performer.
Asian and European markets closed mixed following the Chinese growth data which showed that the world’s second largest economy had its slowest quarterly pace of growth since 2009.
The S&P/TSX Composite Index closed down 79.72 (0.58 per cent)
The Dow Jones closed up 14.57 (0.08 per cent)
Oil is trending lower (Brent $48.79, WTI $46.10 at 4.35pm)
Gold is trending lower (1170.40 at 4.35pm)
The loonie is valued at U$0.7678
Oil at $70? Not until 2020 says Moody’s
Moody’s Investors Service said Monday that it didn’t expect oil prices to reach $70 until 2020. It’s the latest blow to the oil industry which has seen prices of benchmark Brent Crude drop from $100 last summer to below $49 today. The firm expects the average price to be just $48 for 2016 and $55 in 2017.
Canadian Oil Sands shareholders should reject Suncor offer says firm
The Suncor offer for Canadian Oil Sands “substantially undervalues” the firm’s board said Monday, urging shareholders to reject the bid. Suncor wants to pay $4.5 billion at current share prices but in a document highlighting 15 reasons why the bid should be rejected the COS board said that the bid is “exploitive”.
Canada’s housing market is worrying outsiders
Both Moody’s Analytics and The Economist have repeated warnings about the Canadian housing market. Both are concerned that house prices keep rising along with overall household debt. Few economists in Canada are overly concerned about the housing market and the Bank of Canada is also watching the market but does not consider immediate action as necessary.