Briefing highlights
- Stocks climb as oil rebounds
- Canadian dollar tops the 79-cent mark
- PBO sees economic rebound
- Should your company pay you to sleep?
- Still on tap today: Earnings from Intel and Yahoo
The difference a day makes
The trading world is a much different place today.
Stocks, oil and the Canadian dollar all climbed, as the weekend failure of oil producers to bolster crude prices faded.
A lot of it has to do with the turn in a still-depressed oil price, having initially been hurt by the weekend meeting in Doha and then propped up by a strike that has crippled production in Kuwait.
“It is clear investors are climbing back on board following a tough first quarter,” said IG market analyst Joshua Mahony.
“While the theory is to buy at lows and sell at highs, investors will typically seek to enter when the worst is over. For many, that moment is now.”
Tokyo’s Nikkei surged 3.7 per cent, Hong Kong’s Hang Seng 1.3 per cent, and the Shanghai composite 0.3 per cent.
In Europe, London’s FTSE 100, Germany’s DAX and the Paris CAC 40 were up by between 0.8 and 2.3 per cent.
Toronto’s S&P/TSX composite, the S&P 500 and the Dow Jones industrial average also gained.
“It feels the worst is over from an economic standpoint, and this is bringing hesitant investors out of the woodwork,” Mr. Mahony said.
“The road back to the top will be bumpy for those markets closely tied to commodity prices in particular, yet for those seeking value it makes sense to buy during or soon after times of fear rather than in times of exuberance.”
The Canadian dollar, meanwhile, topped 79 cents U.S., reaching as high as 79.2 cents.
“While there are many factors at play, including oil prices, most of the increase appears to be due to shifts in expectations about monetary policy in both the United States and Canada,” Bank of Canada Governor Stephen Poloz told a parliamentary committee today.
Here’s what some market observers are saying today:
“Doha meeting? What Doha meeting? Yesterday’s knee-jerk decline in oil prices to the disappointing outcome was very quickly reversed as the day wore on. The price of the commodity is also amassing some support from the Kuwait worker strike. Market participants are evidently hoping that this will lead to a smaller global supply glut as around 60 per cent of the country’s production is severely curtailed. This could potentially bring about a fall in output of around 1 million barrels per day.” Brenda Kelly, London Capital Group
“The bulls are back in charge, after what promised to be a worrying week now looks likely to result in yet another blockbuster week for the FTSE. We are now in a position where sentiment is bullish by default and thus it seems like it will take something hugely significant to knock the indices off their stride.” IG’s Mr. Mahony
“The Doha non-agreement is forgotten and probably, within the oil producers' club, forgiven. Brent crude at [$40 U.S. a barrel] has done a good job of rejecting the notion that without production cuts it's going to hell in a hand basket. Unless we can un-invent the technology gains of the last few years we won't see dramatic upside and if the upshot is that oil prices settle into a range and better still, the correlation between non oil-producing countries currencies and the price of oil falls away, then that's even better. In the meantime, the oil market's willingness to get back to business as usual has been greeted by a loud cry of ‘Party On, Dudes' in equity markets.” Kit Juckes, Société Générale
“European markets are broadly positive on Tuesday as traders wipe away the sweat brought on by the collapse of the oil meeting in Doha and press on the accelerator pedal to chase US stocks which hit a fresh high for 2016 ... U.S. markets are expected to open higher with a backdrop of rising global equities ahead of corporate results. The Nasdaq is eyeing a higher open despite poorly-received results from Netflix.” Jasper Lawler, CMC Markets
“The [Canadian dollar’s] powers of recovery from the early week low is impressive and continues to support our thesis that the rally has more room to play out in the next few weeks at least.” Shaun Osborne and Eric Theoret, Bank of Nova Scotia
PBO pegs growth
Canada’s budget watchdog expects a rebound in economic growth this year and next, following by a more tame performance.
In a report today, Parliamentary Budget Officer Jean-Denis Fréchette forecast growth of 1.8 per cent this year, 2.5 per cent in 2017 and 1.6 per cent between 2018 and 2010, The Globe and Mail's Bill Curry reports.
That slower pace will reflect “the tapering of fiscal measures and the normalization of monetary policy,” the PBO said in the economic and fiscal outlook.
The report also projected budget deficits of $20.5-billion in the 2016-17 fiscal year, followed by shortfalls of $24.2-billion, $18.9-billion, $14.8-billion and. in 2020-21, $12.4-billion.
TVA shuts channel
Quebecor Media Inc.’s TVA Group is shutting down its Argent business channel after an 11-year run, citing difficulties remaining profitable amid a shifting broadcasting sector.
Canada’s only French-language business channel will cease operations on April 30, TVA said in a statement today, The Globe and Mail’s Nicolas Van Praet reports.