Market Update

Modest overnight volume from sidelined accts partially based on competing headlines that Trump will sign bipartisan border funding deal and to avoid self-imposed Feb 15 deadline, but potential for late hour rejection always a potential. On another matter, Pres Trump weighing 60 day extension to March 1 deadline to end China tariff cease fire. Dec retail sales very weak, -1.2% vs +0.1% expected by analysts and +0.3% expected by markets, ex-mtr veh -1.8% vs flat expected, with declines in every category except for vehicle sales and building materials. Nov sales were rev down to +0.1% vs +0.2% prev. Jan final demand PPI -0.1% overall vs +0.1% expected on sizable declines in both food and energy, but +0.3% ex food and energy vs +0.2% expected and +0.2% ex. food, energy, and trade services +0.2%, so some underlying strength. Initial unemployment claims were above expectations in the Feb 9 wk, +4k to 239k vs 227k expected. The 4-wk moving avg +6,750 to 231,750 in the Feb 9 wk. The avg would rise next week if there is no change from this week’s headline figure as the 200k level in Jan 19 week rolls out. Canada Dec mfg sales -1.3% vs -0.2% expected, and Nov revised down to -1.7% from -1.4%. Ex petro and coal sales -0.3%. Sales down in 12 of 21 industries.

News headlines

Oil prices push TSX futures higher (Reuters) Stock futures for Canada’s main stock index rose on Thursday, supported by higher oil prices, which gained on investor optimism that the United States and China could resolve their trade dispute.

U.S. Futures Rise With Europe Stocks; Oil Climbs: Markets Wrap (Bloomberg) U.S. equity futures advanced and European stocks climbed for a fourth day after the White House was said to weigh postponing higher tariffs on China for 60 days. Treasuries nudged higher alongside the dollar, and oil advanced.

SNC-Lavalin Seen Speeding Asset Sales Amid Deepening Crisis (Bloomberg) If a mine dispute were all that SNC-Lavalin Group Inc. had to worry about, Chief Executive Officer Neil Bruce might be looking forward to next week’s earnings report with some equanimity.

Canadian households aren’t strained by rising interest rates, survey shows (BNN) There is little evidence Canadian households are feeling more strained from rising Canadian interest rates, telephone polling shows, a finding that may reassure Bank of Canada policy makers their previous hikes haven’t gone too far.

U.S. group says Trump trade tariffs cost businesses $2.7 billion in November (Reuters) U.S. businesses paid an additional $2.7 billion in tariffs in November 2018, according to data from a coalition of U.S. business groups fighting President Donald Trump’s trade tariffs.

China January trade data beats forecasts, but sustainability in doubt (Reuters) China’s exports unexpectedly returned to growth in January after a shock decline the previous month, while imports fell much less than expected, but analysts said the strength was likely due to seasonal factors and predicted renewed trade weakness ahead.

China to cut private firms’ financing costs, improve access to funds – Xinhua (Reuters) China’s state council said on Thursday it aims to cut private firms’ financing costs to reasonable and stable levels and improve their ability to raise funds through various measures including issuing bonds, the Xinhua news agency reported.

Shares and oil at three-month highs but no love for euro (Reuters) Optimism about U.S.-China trade talks and bumper earnings lifted European shares to a three-month high on Thursday, though news that Germany only dodged recession by the narrowest of margins left the euro feeling unloved.

U.S.-China trade talks move to higher level as deadline looms (Reuters) U.S. Treasury Secretary Steven Mnuchin said he was looking forward to trade talks with China on Thursday, as discussions in Beijing moved to a higher level in a push to de-escalate a tariff war ahead of a March 1 deadline for a deal.

Overnight markets

Cda Benchmarks Yield Tsy Benchmarks Yield
2 Year 1.806% 2 Year 2.526%
5 Year 1.828% 5 Year 2.51%
10 Year 1.917% 10 Year 2.688%
30 Year 2.164% 30 Year 3.019%

US Economic Data

8:30 AM PPI Final Demand MoM, Jan Surv 0.1% Prior -0.2%
   PPI Ex Food and Energy MoM, Jan 0.2% Prior -0.1%
     PPI Final Demand YoY, Jan Surv 2.1% Prior 2.5%
     PPI Ex Food and Energy YoY, Jan Surv 2.5% Prior 2.7%
      Initial Jobless Claims, Feb 09 Surv 225k Prior 234k
      Continuing Claims, Feb 02 Surv 1740k  Prior 1736k
      Retail Sales Advance MoM, Dec Surv 0.1% Prior 0.2%
      Retail Sales Ex Auto MoM, Dec Surv 0.0% Prior 0.2%
      Retail Sales Ex Auto and Gas, Dec Surv 0.4% Prior 0.5%
9:45 AM Bloomberg Consumer Comfort, Feb 10 Prior 58.2

Canadian Economic Data

8:30 AM Manufacturing Sales MoM, Dec Surv 0.4% Prior -1.4%
       New Housing Price Index MoM, Dec Surv 0.0% Prior 0.0%
      New Housing Price Index YoY, Dec Surv 0.0% Prior 0.0%

Disclosure and Disclaimer

The following sources of information have been, or may have been, used partially or in their entirety to compile the herein provided CTI Capital Securities Inc. (“CTI Capital”) ‘Morning Comments.’ CTI Capital believes these sources to be generally reliable, however, as said sources are varied and from third parties, CTI Capital cannot guarantee the accuracy or completeness of said information: Canadian Press (CP); Bloomberg News (BN); Wall Street Journal (WSJ); Stone & McCarthy Research Associates (SMRA); New York Times (NYT); Financial Times (FT); Market News International (MNI); Globe and Mail; Associated Press (AP); CNW Group (CNW); Reuters; Business News Network (BNN); Market Watch; and others.

Ivan Greenstein, Stephan Buu, Émile Bordeleau

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230