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Inside the Market

Up-to-the-minute insights
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Entry archive:

Don Coxe: Pipe down, snowbirds, the Bank of Canada did the right thing

Don Coxe

Don Coxe, a contributor to Globe Unlimited’s Inside the Market, is chairman of Coxe Advisors LLP and is an adviser to several commodity funds.

We have heard complaints about the Bank of Canada's sudden 25-basis-point rate cut, mostly from Canadians planning winter vacations in Florida or Arizona.

Why, they grumble, add fuel to the real estate fire by reducing rates?

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Today's analyst upgrades and downgrades

DARCY KEITH

Inside the Market’s roundup of some of today’s key analyst actions. This file will be updated during the trading day.

Canadian Pacific Railway Ltd. reported better than expected fourth-quarter results on Thursday, but doesn’t plan to have the same growth in crude-by-rail shipments because of the drop-off in oil prices.

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Week's best web reads: Where top go-anywhere managers are investing

Darcy Keith

Inside the Market's weekend roundup of some of last week's best investing reads on the Internet, which are highlighted every morning in our Before the Bell report.

Trends

Where are top go-anywhere managers going?

Stock market's fate depends on the next six days.

India's soaring stock market isn't showing signs of reversing. Also see, Why India has big money-making potential in 2015.

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Top links: Goldman says these stocks will benefit the most from QE

SCOTT BARLOW

A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the World Wide Web.

Surprise policy decisions by central banks have caused enough misery in the hedge fund world that broader market instability is becoming, if not probable, far more likely.

Bloomberg reports that two New York-based hedge fund managers at BlueCrest Capital Management, Olivier Pariente and Peter Findley, got caught out by the Bank of Canada’s surprise rate cut, lost a ton of money for investors, and are now leaving the firm.

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Friday's small-cap stocks to watch

Luke Kawa

Our roundup of Canadian small-caps making news and on the move today. This post will be updated through the morning.

Burcon NutraScience Corporation said it closed a non-brokered private placement of 660,000 shares at a price of $2.50 (U.S.) per share on Thursday. Shares gapped higher to open more than 14 per cent in positive territory.

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Before the bell: TSX setting up for early gains

Darcy Keith

The Before the Bell report is updated throughout the premarket to reflect the latest news developments and market moves. Check back later for updates.

Futures markets are suggesting a flat start to the final day of the week for North American markets, with sentiment across global trading desks still running cautiously upbeat after the European Central Bank's announcement of a quantitative easing program on Thursday. Futures for the Dow, earlier higher, have turned slightly negative just ahead of the opening bell - but TSX futures are still mildly in positive territory.

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Bank of America warns of ‘lost year’ in U.S. earnings growth

Tim Shufelt

The oil slump will nearly wipe out expected growth in U.S. profits this year, removing one the key supports holding up U.S. stocks, according to Bank of America Merrill Lynch.

The bank’s analysts are now forecasting a “lost year of EPS growth,” on the S&P 500 index, as the plunge in oil benchmarks comes to bear on profitability in the coming quarters.

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ECB’s aggressive stimulus mixed blessing for these Canadian stocks

Luke Kawa

In a widely anticipated announcement this morning, European Central Bank announced that it would be expanding its asset purchases to include government bonds. The ECB is set to join the Bank of Japan, Federal Reserve, and the Bank of England in the list of central banks which have bought longer-term sovereign debt, and also plans to increase its purchases of asset-backed securities and covered bonds.

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Top links: Suncor sees $90 oil price

SCOTT BARLOW

A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the World Wide Web.

A surprise rate cut by the Bank of Canada yesterday kicked off one of the most exciting days in domestic markets in recent memory. The loonie plummeted and short term bonds surged immediately on the announcement – the two year government of Canada bond ended the day with a yield 30 basis points lower at 0.55 per cent.

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Bank of Canada's rate cut was the right move (and what it means for investors)

LARRY MacDONALD

The cut in the Bank of Canada’s overnight lending rate to 0.75 per cent seems to have surprised and alarmed many people. Let’s look at why it’s the right move to make – and some of the implications for Canadians. 

As I have argued since 2013 (see this article  or this article), that a rate cut is the right course to take. The annual rate of inflation in consumer prices has long been hovering at 1 per cent – the lower boundary of the central bank’s inflation target. According to its mandate, the Bank of Canada should have loosened monetary policy some time ago.

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Four things to do with your portfolio to prepare for a Fed rate hike

Gordon Pape

Keep a close eye on Janet Yellen this year. The chair of the U.S. Federal Reserve Board will probably have a greater impact on your financial fortunes than any other public figure. And it’s not just her decisions that will have a profound impact. It’s her words as well – or the omission of them.

Consider the word “patient” for example. In its latest policy statement, issued on Dec. 19, the Fed said that based on labour market conditions and inflation expectations it can “be patient in beginning to normalize the stance of monetary policy.” That was interpreted as meaning the governors are in no rush to raise the key federal funds rate from its current target of zero to 0.25 per cent. Stock markets rallied on the news.

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A less-risky strategy to invest in energy stocks

ROB CARRICK

There will be a rebound in energy stocks at some point – the question for investors is how much risk they’re willing to take on while they wait.

Three exchange-traded funds offer basic exposure to the Canadian energy sector and each has a different risk profile. The most risky is the iShares Oil Sands Index ETF (CLO), which has been hit hardest of the three and lost 24.7 per cent on a total return basis in 2014. It holds a 10-stock portfolio dominated by Suncor Energy, Imperial Oil and Canadian Natural Resources, each of which has a weighting between 15 and 18.5 per cent. These companies are big players in the oil sands and thus not held in great esteem by investors right now. Remember, the Alberta oil sands are one of the world’s more expensive sources of crude.

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Top links: Why resource stocks won’t recover any time soon

SCOTT BARLOW

A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading this morning on the World Wide Web.

Canadians are anxiously awaiting Bank of Canada comments today but that’s not why global markets are treading water. The European Central Bank is expected to announce a large quantitative easing program tomorrow in order to stave off deflationary pressures in the region. The likelihood of a major ECB monetary stimulus program was cited as one of the main reasons the Swiss National Bank removed the franc’s currency peg with the euro – QE would make the peg expensive to maintain.

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Wednesday's analyst upgrades and downgrades

Tim Shufelt

Inside the Market’s roundup of some of today’s key analyst actions. This file will be updated during the trading day.

Netflix Inc.’s faster-than-expected rollout in overseas markets took analysts by surprise, setting off a flurry of price target increases on its stock, Reuters reported Wednesday.

The stock has been under pressure in recent months on fears of increased competition from Time Warner Inc.’s HBO, Amazon.com Inc. and Hulu, as well as on-demand offerings from pay TV providers.

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Wednesday's small-cap stocks to watch

Luke Kawa

Our roundup of Canadian small-caps making news and on the move today. This post will be updated through the morning.

Gear Energy Ltd. said it plans for capital expenditures to total $3-million in the first half of 2015. The company’s previous capital budget, released in November, called for full-year spending to range from $95 to $105-million. “Gear’s estimated realized price has been reduced to under $35 per barrel of oil equivalent,” reads a statement from the company. “We expect that the current depressed prices across the industry will go a long way to re-balance supply and demand and ultimately bring the price of oil back to a more sustainable level.”

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Why MetLife is fighting the 'too big to fail' ruling

Gordon Pape

The international financial community has become almost paranoid in its efforts to prevent another 2008-style collapse. That was more than six years ago but the trauma of the failure of major institutions like Lehman Brothers and the placing of many others on government life support has not faded. 

Of course, no one wants to see a repeat of that calamity, however there’s a growing feeling in the boardrooms of banks and insurance companies that regulators have become overzealous in their pursuit of financial stability.

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