Skip to main content

A man walks through the lobby of the London Stock Exchange in London on Aug. 25.Suzanne Plunkett/Reuters

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

Maclean's argues that the policy focus on restricting foreign homebuying, while important, is distracting Canadians from the other set of measures limiting credit access for domestic residents,

"After October 17 Canadians might find a much cooler reception at the mortgage store. The change means that insured mortgages must be tested at the banks' five-year posted rate, currently 4.64 per cent. Hundreds of thousands of buyers could be affected as the qualifying rate was as low as 2.17 percent until now. For a household with $100,000 in total income the stress test could mean a 20 per cent drop in approved mortgage value. The impact will be substantial."

The article also provides important details on how many industries are dependent on the housing industry.

"Change and pain are headed for Canada's housing market" - Maclean's

=====

While the feds are attempting to cool the housing market, reports suggest that the Ontario government is considering measures to keep it warm, at least for lower income homebuyers,

"Ontario is instead considering affordability measures such as new support for first-time home buyers and more funding for government-subsidized housing, according to the people who spoke on condition of anonymity because the plans haven't been finalized. That leaves Ontario focused on supporting the bottom end of the market as British Columbia tries to cool the top."

"Ontario Said to Eye Subsidies as Canada Housing Policies Diverge" – Bloomberg

=====

HSBC's head of technical analyst Murray Gunn published a "Red Alert" warning clients of an imminent correction in global markets,

"'With the US stock market selling off aggressively on 11 October, we now issue a RED ALERT,' Gunn said in the note. 'The fall was broad-based and the Traders Index (TRIN) showed intense selling pressure as the market moved to the lows of the day. The VIX index, a barometer of nervousness, has been making a series of higher lows since August.' Gunn said the selling would truly set in if the Dow Jones Industrial Average were to fall below 17,992 or if the S&P 500 were to dip under 2,116."

Importantly, this is a technical view that does not consider fundamentals.

"RED ALERT — Get ready for a 'severe fall' in the stock market, HSBC says" – Business Insider

=====

Optimism still abounds in the oil sector. The Wall Street Journal reported that the first U.S. initial public offering in the oil and gas sector was met with out-sized demand,

"Extraction Oil & Gas Inc., a Denver-based exploration and production company, sold 33.3 million shares late Tuesday for $19 apiece. The shares ended their first day of trading up 15% at $21.85 on Wednesday, valuing the company at about $2.4 billion. The last time a U.S. oil and gas company went public the price of crude was more than double the $50 barrel level where oil has traded this week."

"First Oil & Gas IPO in 2 Years Is Winner" – Wall Street Journal

Counterpoint: "Survey: OPEC faces 'tall order' for oil to hold above $50 in Q4" – CNBC

=====

Economic data from China – the world's second largest national economy and the primary source of demand for almost every commodity in the word - surprised to the downside early Thursday morning,

"Key Points: Exports fell 10 percent from a year earlier in September, the customs administration said Thursday, Imports declined 1.9 percent, Both readings fell short of estimates in Bloomberg survey of economists, who projected exports would drop 3.3 percent and imports gain 0.6 percent, In yuan terms, shipments declined 5.6 percent, imports rose 2.2 percent, Trade surplus fell to $42 billion."

"China Exports Fall Most in Seven Months, Adding to Yuan Pressure" – Bloomberg
"Global Stocks Slide, Treasuries Gain as China Concern Resurfaces" – Bloomberg

=====

Tweet of the day: "@C_Barraud #US | According to Bloomberg, the probability of a #Fed rate hike by December is 67.6%." – Twitter

Diversion: "The 10 Best Movie Scenes of All Time" – Cinefix, Youtube

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe