Oil drops, TSX flat
Oil prices dropped more than 2 per cent Tuesday, on expectations of weak demand from China and a stronger greenback, dragging energy and financials lower.
News from Valeant Pharmaceuticals and Progressive Waste Solutions helped support the main index of the Toronto Stock Exchange which closed essentially flat.
Wall Street closed mixed with the Dow and S&P slightly higher and the Nasdaq lower with Apple a drag after falling 2 per cent.
Asian markets closed lower despite China’s central bank adding billions of yuan to the financial system.
Europe shook off concerns over China and oil with most indexes closing with gains.
The S&P/TSX Composite Index closed down 7.01 (0.05 per cent)
The Dow Jones closed up 9.72 (0.06 per cent)
Oil is trending lower (Brent $36.32, WTI $35.80 at 4.15pm)
Gold is trending higher (1078.00 at 4.15pm)
The loonie is valued at U$0.7143
Tough year ahead say bank economists
Some of Canada’s major bank economists are predicting a tough year ahead. Doug Porter from BMO told the Economic Club of Canada that 2015 appears to have seen the weakest growth in decades, with the final quarter likely to be weak. He said that this year will not be much different. Meanwhile CIBC economist Avery Shenfield said that the global economy will see poor results this year with Canada not escaping.
COS deal approaches deadline
The takeover of Canadian Oil Sands by Suncorp must be completed by Friday or Suncorp’s offer will expire as planned. That’s the message from Suncorp’s CEO Steve Williams who believes that the deal will go ahead without an increased offer. In a round of interviews Tuesday Williams dismissed suggestions that he may need to increase the offer and said that the number of shares that have been tendered was positive so far.
Meanwhile Seymour Schulich, who owns 5 per cent of COS and is heavily critical of the offer called again for shareholders to reject the offer. He ran a full page newspaper ad with the line “I’m not selling at this price and you shouldn’t either.”
Industrials, materials lower
Statistics Canada said Tuesday that the Industrial Product Price Index (IPPI) declined 0.2 per cent in November, mainly as a result of lower prices for primary non-ferrous metal products and the Raw Materials Price Index (RMPI) fell 4.0 per cent, led by lower prices for crude energy products. Of the 21 major commodity groups of the IPPI, 11 were up, 8 were down and 2 were unchanged. Of the six major commodity groups of the RMPI, two were up and four were down.