Money Sense

[Anonymous]

With economic activity revving up again amid soaring vaccination rates and signs of inflation, several analysts believe the Bank of Canada will start raising its trend-setting interest rate sometime in the second half of 2022.



The question is how rising borrowing costs might affect the housing market, which has grown to account for an outsized share of the country's $2.4-trillion economy.



"That's the number one issue facing the Canadian economy: the increased sensitivity to higher interest rates," says Benjamin Tal, deputy chief economist at CIBC.

[Anonymous]

Last year, Tax Freedom Day landed on May 17. This year, Tax Freedom Day arrives a week later than last year.

[Anonymous]

A Reuters poll of economists who also said a spread of new COVID-19 variants was the top economic risk this year.

[Anonymous]

Oil prices and frackers' free cash flow are both at multi-year highs, often a sign the industry needs to ramp up investment in new projects.



But compared to pre-pandemic, US oil production is down two million barrels and active oil rigs are sitting at just half previous levels.



Oil is trading above $70 but US shale producers aren't reaping the rewards, as gun-shy investors favor debt reduction over flashy drilling projects, according to a new report from the Wall Street Journal.



Oil prices and frackers' free cash flow are both at multi-year highs, normally a sign that the industry needs to quickly ramp up investment in new projects. But compared to before the pandemic, US oil production is down two million barrels and active oil rigs are sitting at just half previous levels, according to Baker Hughes data cited by the Journal.



Skittish investors - burned before by shale drillers who had aggressively ridden past oil booms - are behind the lower production levels, as they lobby producers to prioritize debt reduction.

Skittish investors are behind the lower production levels, as they lobby producers to prioritize debt reduction.

[Anonymous]

Fundstrat's Tom Lee says the stock market is on track to continue its uptrend and surge as much as 9% by year-end.



Lee said the S&P 500 could surge to 4,700 by year-end as "strong markets stay strong," representing potential upside of 9% from Thursday's close. That move higher will likely be driven by cyclical stocks as interest rates drift back towards their recent cycle-high of 1.75%.

[Anonymous]

Inflation, of course, means the reduction of purchasing power for every dollar in your pocket — and it's coming lightning quick.



The Fed's preferred inflation gauge — the overall PCE index, which includes food and energy prices — rose 3.9% in May, nearly double the central bank's 2% target," the Wall Street Journal reported.



The Wall Street Journal recently spoke to several prominent economists who relayed a grim forecast about the near future of the American economy.



In fact, they're predicting that inflation will rise to levels not seen since the early 1990s — and expectations have worsened since April.



From WSJ:



The respondents on average now expect a widely followed measure of inflation, which excludes volatile food and energy components, to be up 3.2% in the fourth quarter of 2021 from a year before. They forecast the annual rise to recede to slightly less than 2.3% a year in 2022 and 2023. That would mean an average annual increase of 2.58% from 2021 through 2023, putting inflation at levels last seen in 1993.



"We are transitioning to a higher period of inflation and interest rates than we've had over the last 20 years," Joel Naroff, chief economist at Naroff Economics LLC, said.



"Inflation is expected to surge longer and longer — longer than the Fed previously thought," Diane Swonk, chief economist at Grant Thornton, explained. "The Fed is now likely to raise rates in the first half of 2023, although some Fed presidents will be nipping at the bit to move sooner.

[Anonymous]

OPEC+ ministers agreed on Sunday to boost oil supply from August to cool prices which have climbed to 2-1/2 year highs as the global economy recovers from the coronavirus pandemic.



The group, which includes OPEC countries and allies like Russia, crucially agreed new production allocations from May 2022 after Saudi Arabia and others agreed to a request from the United Arab Emirates (UAE) that had threatened the plan.



Oil prices have dropped on speculation of production increases.

[Anonymous]

OPEC+ ministers agreed on Sunday to boost oil supply from August to cool prices which have climbed to 2-1/2 year highs as the global economy recovers from the coronavirus pandemic.



The group, which includes OPEC countries and allies like Russia, crucially agreed new production allocations from May 2022 after Saudi Arabia and others agreed to a request from the United Arab Emirates (UAE) that had threatened the plan.



Oil prices have dropped on speculation of production increases.

While Jim Crow Joe is firing American pipeline workers, and banning drilling leases on federal lands he lifts sanctions on a Russian pipeline and leans on OPEC to produce more. What a piece of shit he is.

[Anonymous]

Oil and stocks took a pounding today on fears of the Delta variant and production increases among OPEC and Russia,

[Anonymous]

Oil and stocks took a pounding today on fears of the Delta variant and production increases among OPEC and Russia,

We are a long way from the end yet.

[Anonymous]

Oil and stocks took a pounding today on fears of the Delta variant and production increases among OPEC and Russia,

The Canadian dollar is down about three cents from about two weeks ago. The TSX is doing well as we are doing better than the US with vaccinations. The Dow is taking a big hit.

[Anonymous]

The drop in oil prices due to the combination of production increases by the OPEC + bloc and fears of Delta are probably just a hiccup.



I like Halliburton Energy Services. The company has strong margins from its fracking business. Halliburton's venture into the cloud and artificial intelligence, which allows the company to use less capex and human capital to create revenue. I see the stock jumping to $30 a share within 12 to 18 months.

[Anonymous]

The Canadian well service business is up five-fold from last July, supported by commodity prices and the Canadian well abandonment program.



The outlook for the overall Canadian market over the next 12 months remains exceptionally bright.

[Anonymous]

I like Cenovus. It is now well on the way to reaching the company's balance sheet goals, and its operations continue to perform well.

[Anonymous]

The oilpatch rebound is here: Suncor, Cenovus swing to profit amid higher oil prices, reopening economies.



Suncor Energy Inc. and Cenovus Energy Inc., two of Canada's three largest oil companies, reported better-than-expected quarterly profits Thursday and announced they cumulatively spent close to $2 billion on a combination of share buybacks, dividends and debt repayment in the second quarter.