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BoC Hikes 50bps!

Well folks, it's Friday eve and we’ve kept the gains going with our short on $GOOG yesterday which has already returned 2% while the market was up about 1.75% by midday before reversing and booking at 74 bp loss by the close. Regardless, the S&P 500 has advanced just over 4% since the start of October and if these last three sessions prove fruitful, it will be the first up-month since July. Read on for your daily dose of market inspiration as the Dow, S&P and Nasdaq are up 67, 14 and 72 bps in premarket trading.


Markets in Review

Taking a closer look at the Canadian market, the TSX 60 advanced 96 bps by the close with the largest advance being made right after 10 AM when the Bank of Canada hiked the overnight rate by 50bps - this brought it to 3.75%, by contrast the Federal Reserve targets a 3 to 3.25% Fed Funds Rate. Pictured below, the TSX briefly broke its 50-day MA before rejecting a breakout of its current price channel. Overall, the TSX traded sideways for a longer portion of the year than the S&P did, bringing its YTD performance to just under -10% vs. the S&P’s abysmal -20%.


Short: Everest Re Group, Ltd. (RE-NYSE) | Timeline: 2 days

Everest Re Group, Ltd. (RE), which provides reinsurance and insurance products internationally, reported their earnings for Q3 yesterday after the market closed. The company missed earnings and revenue estimates by 6.73% and 8.18%, respectively, as a “heightened risk environment, including global catastrophe events and continued global economic uncertainty further underscored the strength of Everest’s business” (CEO Juan C. Andrade, Full Story). Referring to the chart, RE has had a quite sideways year so far, oscillating through a couple of price channels - the most current one being this broadening triangle. As the price has approached the upper level of this pattern, the Stochastic RSI has signalled the stock is in very overbought territory, and with this negative news, is likely to reverse towards support.


Zooming out...

A Tale of Two Energy Policies

Throughout the energy crises of the prior two quarters, Germany and Britain have stuck to a similar playbook in regard to relief efforts for their populations. However, in recent days the two nations have diverged in regard to how they treat fossil fuels in a time of growing concern about the planet’s climate.

On one side, newly appointed Chancellor Rishi Sunak has reinstated the British ban on fracking, which was previously removed by PM Truss. On the other hand, Germany has become more realistic with the situation they face and has even begun to tear down windmills to expand coal mining (Full Story).

While this divergence in response may not be critical to what happens today or tomorrow, we believe that these adjustments will create long-lasting differences in the strength and resilience of these countries as we head into winter.

Is the BOC Ahead of the Curve?

Yesterday morning, the Bank of Canada announced their decision to raise rates by only 50 basis points rather than the speculated 75bps. It’s likely this decision came as a result of the entwinement of the Canadian economy and the recently struggling housing market.

With that being said, this decision also might indicate that the BOC is taking the advice of the international community, and slowing the pace of their rate hikes.

The slowing of rate hikes may also play in the country’s favour as inflation rates have been milder, and previous hikes have been stronger than their neighbour in the South.


Making headlines...

Elon Musk Is In Twitter’s Office and Will Address Staff Friday

  • Elon Musk made his presence felt at Twitter’s San Francisco headquarters Wednesday, posting a video clip of himself walking into the offices carrying a kitchen sink and changing his public profile descriptor to “Chief Twit.” He’s due to address staff Friday, the closing deadline for his planned $44 billion deal to take the company private. (Full Story)

Meta Is on Brink of Falling Out of Top 20 Biggest US Stocks

  • The Facebook parent’s market value has collapsed by a whopping $520 billion in the past year, and now it’s on the brink of getting booted from the ranks of the 20 largest US companies. (Full Story)

Germany Ready to Double Uniper Aid to €60 Billion in Worst Case

  • Germany is preparing for a worst-case scenario in which it needs to double financial aid to Uniper SE, the nation’s biggest gas supplier, to €60 billion. (Full Story)

Credit Suisse launches $4bn Saudi-backed fundraising

  • Credit Suisse is set to raise billions in capital, carve up its investment bank and cut thousands of jobs, in an effort to restructure its business and move on from a litany of scandals and an SFr4bn third-quarter loss. (Full Story)


Chart of the Day: Expected new orders collapse to historical lows…


“He who is not contented with what he has, would not be contented with what he would like to have.” - Socrates


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