Oil, equities higher on possible OPEC deal
The talk of the markets Tuesday was oil once again. The session started with prices falling and Goldman Sachs warning that the world is running out of storage; it ended with prices higher and talk of a deal between OPEC and other producers which could reduce supply. Meanwhile the World bank cut its forecast for 2016 to $37, down from its previous outlook of $51.
The speculation of talks followed comments from the Iraqi oil minister that Saudi Arabia and Russia were showing flexibility. Oil prices surged 6 per cent at one point and have ended the session around 3 per cent higher.
Asian equities closed lower after the lower lead from Wall Street’s Monday session. The improved picture for oil helped European and North American indexes to climb from early lows and end the day higher.
The S&P/TSX Composite Index closed up 188.2 (1.55 per cent)
The Dow Jones closed up 282.0 (1.78 per cent)
Oil is trending higher (Brent $31.57, WTI $31.23 at 4.20pm)
Gold is trending higher (1122.00 at 4.20pm)
The loonie is valued at U$0.7102
PSP to buy part of AIG
Canadian pension investment managers PSP Investments is to buy the broker-dealer business of insurance giant AIG. CBC News reports that the deal involves New York-based private equity firm Lightyear Capital but details of the acquisition have not been revealed. AIG Advisor Group has around 800 employees and a network of around 5,200 independent brokers. AIG is expected to split into separate divisions under pressure from investors.
Scotiabank downgraded for switch towards higher profit lending
The Bank of Nova Scotia has been downgraded by ratings agency Moody’s due to a focus on high-profit credit cards and auto loans rather than the lower-profit mortgage market. It has also made some international acquisitions which are in less stable markets than Canada. The downgrade to Aa3 from Aa2 reflects what Moody’s says is a shift from Scotiabank’s low-risk appetite.
Alberta job losses worst since 1980s recession
Statistics Canada says that 2015 was the worst year for job losses in Alberta since the recession of the early 1980s. The agency’s revised stats show that there were 19,600 job losses in 2015 (previous data was 14,600). In 2009, during the Great Recession, there were 17,000 jobs lost. Before that the highest number of jobs lost in one year was 1982 when the total was 45,000. The unemployment rate for 2015 was also Alberta’s highest for 20 years at 7.1 per cent.