Friday , August 19 2022

Before Bell: What all Canadian investors need to know today


The US and Canadian stock markets have a positive outlook on the outcome of the US midterm elections, as Republicans have lost control of the Senate to Democrats.

House controlled by the Democratic Party may hinder Trump's pro-business agenda and cause uncertainty about his administration. However, there is little concern about the reversal of tax cuts and deregulation measures that have already been implemented. Elections in 2016.

The outcome of the Republican Party pointed to a political stalemate that was not worse than fear and was expected by investors. I was able to return to the market in October, which had the worst month in seven years.

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Joffrey Yu, chief investment officer at UBS Global Asalth Global Asset Management (UBS), said, "Given what the gift is now pointing to, it would be a sign that the Republican has a slight advantage."

"The big question here is to add risk, given the vulnerable market situation in October, we are a little stronger in the short term."

The market is always positive, and once the election is over, investors can focus on the following actions.

"The good news for the market is that there are uncertainties that are now being removed. Guy Miller, chief market strategist at the Zurich Insurance Group, knows where we are in the next two years, Said they will focus on income growth and the economy.

"Despite the divided governments, I expect more fiscal stimulus, and there is a compromise on infrastructure spending," said Steve Friedman, chief economist at BNP Paribas Asset Management. .

Trump's emphasis on trade tariffs can be imposed without Congressional approval. It survives the worries about a trade war between China and the United States.

"We are more likely to focus on external issues such as trade that will affect risk appetite if Trump can do less in the domestic market," said Patrick O'Donnell, investment manager at London's Aberdeen Asset Management. O & # 39; Donnell) said.

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Tuesday, the market closed further in anticipation of US midterm election results.

In the aftermath of global volatility in Asian trade, stocks and the dollar were fluctuating with Republican fluctuations, while the pan-European stock benchmark rose about 1% while the MSCI World stock index rose 0.5%.

The UK's FTSE rose 1.1 percent, Germany's DAX 0.95 percent and France's CAC 1.3 percent.

Sylvain Goyon, director of equity strategy at the Paris brokerage firm, called many investors "uncertainty premiums" before the elections,

"There is a good reason to come back to the market," he said.

Most analysts agree that the newly-empowered Democrats are capable of investigating Trump's tax filing, business conflicts and suspicions related to Russia's connection with Russia in 2016.

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Moreover, the split parliament can hinder the promotion of tax exemptions and deregulation, which are exaggerated measures on the US economy, stock markets and the dollar.

The Federal Reserve will start a two-day monetary policy meeting on Wednesday, but is expected to raise interest rates only when it meets in December.

Asian stocks were down 0.3 percent in the Japanese Nikkei and 0.7 percent in the Shanghai, while Hong Kong's Hang Seng Index gained 0.1 percent.


Oil has rebounded to $ 73 a barrel Wednesday, after falling to its lowest since August due to reports that Russia and Saudi Arabia are discussing oil production cuts in 2019.

Russia's TASS news agency has announced that bilateral talks on the issue have begun, the two largest producers of OPEC-led alliances that have been limiting supply since 2017.

Petromatrix analyst Olivier Jakob said: "I think this is an attempt to get speculative access to the market with some oral intervention." The world supply-and-demand balance does not look very tight next year. "

Brent crude, the international benchmark, rose $ 1.04 to $ 73.17 a barrel. Tuesday 's contract was at $ 71.18, the lowest since August 16. US crude oil rose 68 cents to $ 62.89.

OPEC and other predictors report that Iran 's oil exports are expected to decline due to US sanctions Monday, but the global market can see a supply surplus in 2019 as demand slows.

Gold rose on Wednesday as US midterm elections disrupted Congress and put pressure on the dollar. Investors are turning to the US Federal Reserve meeting to find clues to future rate hikes.

Spot gold rose 0.6 percent to US $ 1,233.88 an ounce while US gold futures rose 0.7 percent to US $ 1,235.40 an ounce.

"The result of the midterm election was expected by the financial markets, and it would have been a big thing if the gold was surprising," said Julius Baer analyst Carsten Menke.

"Today we saw gold moving in dollars, the dollar fell and it was reflected in the gold price."

The dollar index fell 0.5% versus its major rivals and became a more attractive gold bullion for other currency holders as the split parliament slowed expectations for major fiscal policy tightening.

Currency and Bonds

As oil prices rose on Wednesday, the Canadian dollar traded at 76.4 cents.

"The weaker oil prices kept the USD / CAD above $ 1.3100 (76.33 cents), as the market digested the results of the US midterm elections, and prices should go above $ 1.3080 (76.45 cents US) , And $ 1.3170 (75.93 cents) will serve as a resistance, "said a note from RBC Capital Markets.

The loss of the US dollar for several weeks accelerated with a 0.5% decline from the main competitor. As a result of the split of the US Congress, expectations were raised that major US fiscal policies would have a positive impact on the economy.

The US dollar has been a stunning winner in the global currency market this year thanks to its financial stimulus and strong economic indicators, forcing the US Federal Reserve to display higher interest rates.

However, market experts believe that the mid-term outcome of the United States, with Democrats taking control of the Senate and Republican seats in the Senate, is making it harder for the United States to strengthen its policies. Trump's policy may be subject to a more rigorous investigation that will create new political uncertainties.

The prospect of low fiscal stimulus will put pressure on the Fed to raise interest rates and put pressure on the US Treasury's interest rates and the dollar. The overall return on US debt fell 3 to 5 basis points.

The swap market expects a 65 basis point increase in the cumulative rate hike until September 2019, but it can fall further if bond yields decline.

Piotr Matys, an FX strategist in Rabobank in London, said, "There is a premise that the Trump Administration's other stimulus packages are very limited and that the dollar will be lowered."

For its rivals' baskets, the dollar plunged 0.5 percent to 95.758, its lowest level in more than two weeks.

The 10 – year Treasury bond yield fell 4 percentage points to 3.18%. Canada's 10-year bond yield also fell slightly to 2.528%.

Watch Stock

Negotiations on Rogers Communications The sale of most magazines to The Hockey News's publisher, Roustan Media Ltd., has collapsed at the last minute. According to sources familiar with the process, Toronto-based communications and media companies are still looking for magazine buyers. Globe and Mail reported that for the first time in August, Rogers put 8 prints and digital titles in blocks, including Maclean, Canadian Business, MoneySense, Today's Parent, and Hello. French and English versions of Canada, Flare and Chatelaine – Comes with custom content groups that produce marketing content such as in-house magazines from a variety of companies. Rogers hired an investment bank in the Canadian Imperial Bank of Commerce to manage sales.

Imperial Oil Ltd. A $ 2.6 billion Aspen project will be built on Tuesday for the first time in northern Alberta since 2013, a new oil sand development plan. Headquartered in Calgary, with a majority of ExxonMobil, the company can begin its first 75,000 barrels per day project in the fourth quarter of 2022 and expect its first production in 2022.

CGI Group Inc. It exceeded expectations by reporting 4Q earnings and sales increased compared to a year ago. The IT and business consulting firm announced that it earned $ 293.5 million or $ 1.03 per diluted share during the quarter ended September 30. Revenue for the fourth quarter of last year was about $ 2.8 billion, almost a year-on-year increase. Excluding certain items, CGI said it earned $ 309.8 million or $ 1.09 per diluted share. On average, Thomson Reuters Eikon said analysts expect a profit of $ 1.07 per share for the quarter.

Michael Kors Wall Street 's expectations for quarterly revenues on Wednesday were better than the US fashion group' s decline in retail sales in Europe, which is struggling to create a more luxurious identity. Following that news, market share declined 11.3 percent.

Craft Heinz Kraft sold its Canadian natural cheese business to Parmalat SpA for $ 1.66 billion to help expand the North American footprint of Parmalat's owner Lactalis. Agreed. Its share gained 0.8 percent from market transfer transactions.

Colorado voters have rejected legislation requiring more distance between the drilling project and public places, stimulating stocks of companies that operate in the state. Anadarko Petroleum Corporation While 9.4% Noble Energy Inc. Increased by 7.3%, making S & P SMEs the second largest market share.

US Satellite TV Service Provider Dish Network Corporation Faced with inexpensive options such as Netflix and Hulu, more subscribers have reported a 5% drop in quarterly sales on Wednesday. Its stock fell 3.1 percent in premarket trading.

Papa John's International Quarterly comparison sales in North America fell short of expectations. New ads and brand changes helped us to try to recover from bad promotions due to divisions with entrepreneurs. Based in Louisville, Kentucky, the company expects annual sales in North America to fall in the 6.5 to 8.5 percent range compared to the current 7-10 percent decline. Its stock has increased 5.3 percent in premarket deals.

Income is: ATS Automation Tooling Systems Inc.; Ag Growth International Inc .; Alcanna Inc.; Union property REIT; Altius Minerals Corp.; Altus Group Ltd.; American hotel importer property LP; Andrew Peller Ltd.; Bird Construction Inc.; Black Diamond Group Ltd.; CGI Group Inc.; Cardinal Energy Ltd.; Cervus Equipment Corp.; Cheswood Group Company; Optional property REIT; Corby Spirit and Wine Ltd.; Crombie REIT; Easyhome Ltd .; Endeavor Mining Corp.; Essential Energy Services Ltd .; Firm capital mortgage investment corporation; First Capital Realty Inc.; Gamehost Inc.; Guardian Capital Group Ltd.; Heroux-Devtek Inc.; Home Capital Group Inc.; IAG Inc .; Ivanhoe mining company; Just Energy Group Inc .; KIRAM Property REIT; Kinross Gold Corp.; Linamar Corp .; Manulife Financial Corp .; Melcor Developments Ltd .; Pason Systems Inc.; Pollard Banknote Ltd .; Prudential Financial Inc.; Qualcomm Inc .; Rocky Mountain Dealership Inc.; Russel Metals Inc.; Sempra Energy; Silvercorp Metals Inc.; Smart Ritz; Square Inc.; Sun Life Financial Inc.; SunOpta Inc.; Superior Plus Corp .; Trilogy International Partners Inc.; 21st Century Fox Inc; United Corporations Ltd .; West Forest Products Inc.

Read more: Wednesday's small stock

Economic News

(ET) October Canada Ivey Purchase Manager Index.

(3 p.m.) American Consumer Credit. The consensus is a $ 15 billion increase from August.

Reuters communication files

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