Every day ROB Insight delivers exclusive analysis on breaking business news and market-moving events. Streetwise offers news and analysis on Bay Street and the world of finance. Inside the Market delivers up-to-the-minute insights on market news as it develops.
Here are our editors’ picks of some of the best reads available to Globe Unlimited subscribers this week.
Housing running hot and cold
Tick the correct answer: (1) Canada’s housing market is on a tear. (2) Canada’s housing market has cooled right down. If you ticked them both, you’re right. Statistics Canada released its latest report on new-home prices this week. Nothing eye-popping in the headline numbers – May’s prices were virtually unchanged from the previous month, and were up 1.5 per cent from a year earlier. Still, after the long, long runup in prices it’s notable that the upward trend is continuing. But drilling down into the numbers reveals a startling contrast: One Canadian city’s housing market has been eclipsing that of every other part of the country, with big surges in not just prices, but also housing starts and building permits. In ROB Insight, David Parkinson sizes up the country’s increasingly two-speed property market.
Green shoots in the oil patch
Spring has returned to financings in the oil patch as producers line up to launch initial public offerings. The rebound follows a weak year for IPOs in 2013, and the deals that have emerged or are in the pipeline aren’t for small-fry startups, but rather established producers gearing up to expand their footprints. In Streetwise, Jeffrey Jones looks at the companies coming to market and the factors driving them to seek financing.
Hedgies dropping their shorts
It’s been more than five years since the bulls started rampaging, and even hedge funds are betting they aren’t about to hit a wall. Short selling stocks is one of the hedgies’ signature techniques of making money, and research by Markit reveals the funds have been easing off on their bearish bets to levels not seen since before the financial crisis. But with plenty of overvalued stocks out there, why are they pulling back now? In Inside the Market, David Berman examines the factors that may be influencing hedge funds to feel a little less gloomy about the stock market.
The earnings parade has begun
Earnings season is upon us once again, and many heads will be swivelling in the direction of those trusty old bellwethers that tend to point in the direction of the wider economy. But nothing is forever, and it’s not always easy to tell when some of those bellwethers have outstayed their welcomes and should be elbowed aside for new players. In ROB Insight, Ian McGugan takes a look at some companies in different sectors that merit attention and could even prove to accurately reflect the state of the market.
Contagion fear convulses markets
Oh no, not again. Although the euro zone was shaken to its foundations by the financial crisis, it managed to pull back from the precipice. For more than a year, it’s been off the radar of many, with the red alert seemingly downgraded to yellow. But markets were jolted this week on fears that one of Portugal’s largest banks is in crisis, prompting its stock to plummet before trading was halted. The big fear: contagion. Well, you can relax, says Tim Kiladze in Streetwise, who explains why this time is different and how the fallout is unlikely to spread.
When to push the ‘sell’ button on banks
You’d be pretty hard-pressed to find a retail investor who doesn’t have some exposure to banks in their portfolios, so knowing when to sell stocks of the Big Six is a pretty handy thing to know. In Inside the Market, Scott Barlow scours through the data to discover the strongest valuation metric that will provide the best indicator of future stock performance.