It would seem that real estate news out of China yesterday spooked investors in Asia and Europe in regard to a possible tightening of monetary policy in the region. Markets in Asia were off about 1.5% overnight. In Europe markets are lower by about a point at midday on the Asian news and the fact the ECB will holding financial institutions to a higher level of disclosure when it comes to capital requirements. This is a good thing in my view longer term as it will breed more confidence in the Euro banks, however the short-term view is less profitability for these institutions.
US Futures are off about a third of a point and Canadian futures are down about a quarter point.
Gold is retreating this morning down 8.00 to 1333 as is oil down more than 1% to 96.80. The loonie is off 0.34 cents this morning to 96.85. Bonds are up slightly with US and CDN 10 year yields at 2.50% and 2.46% respectively.
In mandate earning news, CNR reported after the close last night and beat estimates by about 10% on earnings and about 5% on revenues. The all important operating ratio feel below 60% to 59.8% which shows continual improvement (the lower the number the better). Carloads and tonnage were both up more than 3% and the company will buy back more than 15 million shares over the next year. The stock will open higher about 2% this morning according to the pre-market.
The Bank of Canada will release its policy statement this morning at 11am EDT and the assumption is nothing much will come of it. If there is anything interesting worth getting out I will send another mail later today.
Lastly, yesterday was Apple day as the company announced the new iPad Air for the holiday season. The lower priced and not as heavy tablet boast loner battery power and higher resolution. Not really a big Apple announcement by any means. It would seem that the company needs some “wow” factor to continue the run it has been on the last while.
|Kenneth A. Dick, BA, CIM, CFP, FCSI
Branch Manager & Portfolio Manager | Independent Wealth Management
Canaccord Genuity Wealth Management