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The Canadian insider blog discusses news and insight found among insider and significant shareholder filings in Canada.
 
Ted Dixon is co-founder and CEO of INK Research. He is the creator of the INK Canadian Insider Index, and is the editor of the daily Morning INK and weekly Market INK reports. He is a regular contributor to the Globe and Mail's Globe Investor pages and has also worked as a part-time lecturer in corporate finance at the British Columbia Institute of Technology. Before starting INK, he worked at the Connor, Clark & Lunn Financial Group where his responsibilities included portfolio strategy and product development. He has also been an analyst at the Fraser Institute and a treasury specialist at the TD Bank. He is a Chartered Financial Analyst and member of CFA Vancouver. He holds an MBA in Financial Management from the University of Chicago, and a Bachelor of Commerce from UBC. Listen to his weekly economic commentary on Vancouver's Roundhouse Radio FM 98.3.
 
Victor Wong is a business and client development associate at Canadian Insider and an avid market watcher.
 
Nicholas Winton contributes technical commentaries on the INK Canadian Insider Index. Nicholas also writes the High on the Hog blog.

 

 

Sound Bites: What's next for global stock and Vancouver real estate markets?

July 27, 2016 - Yesterday the Federal Reserve released a non-controversial policy statement essentially saying that risks were not as high as last meeting (which took place right before Brexit) and that the labour market was showing some signs of strength. Essentially, it left itself enough wiggle room for the rest of the year to either raise rates, do nothing, or backtrack should the data turn south.

Sound Bites: Is the stimulus bullet train coming?

July 21, 2016 - Since the beginning of the month, gold stocks have been more or less flat on the back of better expected US growth. Another factor driving investors into riskier assets is the hope that Japan will deliver a double dose of monetary and fiscal policy stimulus following the triumph of the Liberal Democratic Party in recent elections. While we remain skeptical about the narrative surrounding a US recovery that will allow the Fed to hike rates sooner than expected, the moves in Japan could be meaningful.

Sound bites: Will stocks slip on sliding oil prices?

With key US benchmarks making new all-time highs and the INK Canadian Insider Index making another 52-week high on Wednesday, the key question is whether or not the momentum can be sustained. A key positive development for market bulls over the past week has been the participation and leadership of the Financials, with the Thomson Reuters Financials Index jumping 4.16% compared to a 3.04% gain for the S&P 500 as of Tuesday. A good amount of the gains took place early in the week as long bond yields rose on the back of renewed hopes for aggressive global monetary easing. There was plenty of chatter that the Bank of Japan (BoJ) would be considering either a form of targeted lending to effectively assist the central government in financing a large infrastructure plan or "helicopter easing" which we would dub as HE. Under HE, the central bank would send cash payments or loans directly to households, bypassing the credit markets.

Sound bites: What is next for central bankers and markets?

In light of post Brexit global growth concerns, as we wrote in our June 27th Canadian market commentary, we are just not sure what exactly central bankers could do that is not "more of the same." So what is more of the same?

  • zero or near zero rates
  • negative rates
  • asset purchases (QE)

Investors now seem to be dismissing the ability of "more of the same" to work. Consequently, it raises the ante for further central bank action. If they do decide to act, they will try something even more dramatic than more of the same. Two of the most talked about weapons in the arsenal that could be used as a "final assault" on low inflation would be

Sound bites Draghi: monetary policy has inevitably created destabilising spillovers

On Tuesday, European Central Bank President Mario Draghi gave a previously scheduled speech at the ECB Forum on Central Banking at  Sintra, Portugal. No doubt, the text was tweaked to adapt to the world post Brexit. In fact, it appears more than tweaked. It may be the closest you can get to a speech where a power central banker admits that some of the measures central bankers have taken since the financial crisis may have negative consequences. The ECB chief went as far as to say, "monetary policy has inevitably created destabilising spillovers."

Sound bites: Limits to growth

Back in the 1970s, a think tank called the Club of Rome commissioned a publication Limits to Growth which argued the world would soon press up against a wall of finite natural resources. As a consequence, the world needed to prepare for a lower growth environment. Some forty years later the world may have indeed run up against limits to growth, but not due to natural resource depletion. Instead, accumulated global debt may be the culprit.

Sound bites: US Energy insider sentiment sinks as crude oil rallies

A poor jobs report last Friday has had the perverse effect of helping to send US stocks, as tracked by the S&P 500 Index, to new year-to-date highs. The disappointing news shut down Fed talk of a June rate hike, a proposition that in our view had little to do with a hot jobs market or consumer price inflation. Instead, the concept of a tightening likely gained momentum within the Fed over concerns that commercial real estate risks are beginning to boil. Nervousness was on display last month when the Boston Globe reported that Federal Reserve Bank of Boston president Eric Rosengren warned that commercial real estate prices had jumped above the peaks reached before the financial crisis.

Sound bite: A bucket of cold water to start the summer for Financials

Highlights from the June 1st US Market INK Report

Our US Banks Indicator remains positive, sitting above the 100% level (at which point there are the same number of stocks with key insider buying as there are with selling). Nevertheless, after a nice rally over the past few weeks, the bottoming of our US Banks Indicator suggests that much of the rally in the group may be over for now. A bottom in an indicator often coincides with a top in associated share prices. The counter argument could be made on traditional technical measures. From a technical chart perspective, new highs in the banks do look possible, particularly with the SPDR KBW Bank ETF (KBE*US) trading above its 20, 50 and 200 day moving averages. It also put in a new 3-month high earlier this week.

Sound Bite: Can the Vancouver Real Estate Gap lead to a Trump-like outcome in BC politics?

With west-side single family home prices soaring over 20% year-over-year, you would have to have your head in the policy sands to not understand that Vancouver real estate prices are on the cusp of a full-blown hyper inflation. Those that are in denial are riding on the assumption that what happens on the Vancouver west side stays on the west side. It does not.

Weekly Sound Bites: INK CIN Index rebalance - insiders see gold in Basic Materials

On Friday we announced the semi-annual rebalancing of the INK Canadian Insider (CIN) Index. The rules-based, mid-cap oriented index employs the INK Edge V.I.P. outlook ranking process to identify the 50 top-ranked value and price momentum stocks on the TSX preferred by insiders. On the second Friday of every May and November we announce the rebalancing results which are implemented the following Friday (May 20th this year). During the rebalancing process, all stocks in the Index that have a mixed INK Edge outlook or lower are removed and replaced by the highest ranked stocks not already in the Index. All surviving members of the Index are rebalanced to equal weight.

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