Equities rallied on April 5 taking major indexes including the S&P 500 to record highs. The U.S. dollar declined while the treasury bond yields remained largely unchanged. The markets ended the day in green on the back of positive employment data. The increase in the number of vaccinations also spurred the stock market as employers added the most jobs in the last seven months, south of the border.
Will Canadian oil stocks stage a rebound?
Canadian energy stocks have grossly underperformed the broader markets. The COVID-19 pandemic exacerbated this underperformance but it’s possible that oil companies are poised for a turnaround.
According to a report from BNN Bloomberg, “Recent export pipeline news is offsetting the ongoing reality of volatile commodity prices, general investor distaste for the sector and regulatory uncertainty and leading to more mergers and targeted increases in capital spending plans.”
The energy index on the TSX is down 67% since April 2016. However, expansion projects are all set to gain pace in 2021 after regulatory delays impacted several companies including Enbridge.
Toronto home sales continue to surge
Toronto which is Canada’s largest housing market reported another month of record sales and price gains last month. The number of property sales in the Greater Toronto Area in March 2021 stood at 15,652 which almost double the property sales compared with March 2020.
The average selling price rose 21.6% year over year to $1.097 million as active listings were down by a marginal 0.7%. Experts believe a low interest rate environment coupled with the shift towards remote work to have propelled housing demand among home buyers.
However, investors should not be too optimistic about the rising prices in Canada’s largest cities. David Rosenberg one of the industry leaders who predicted the housing collapse in the U.S. in 2008 explained the Canadian housing market is in a bubble.
According to another BNN Bloomberg report, “Rosenberg noted that a key national home price has experienced double-digit gains with virtually no wage growth to help Canadians keep pace. He described the relationship between income and home prices in Canada today as resembling the disparity between incomes and tech stocks during the dot-com boom-and-bust cycle.”