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Our regular summary of the capital markets. Check back each month for new updates.

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April 30, 2018

CBA: Fact of the Month

Article 20 (c): NHLPA Game Tickets

Each Club shall make available for purchase by the NHLPA up to sixteen (16) tickets per Regular Season and Playoff home games. The amount of tickets available for purchase by the NHLPA will be increased to twenty (20) tickets per game in the Conference Finals and twenty-four (24) tickets per game in the Stanley Cup Finals.

April 30, 2018

The Lucrative Lord Stanley

Feature Topic

For those competing every other night during the NHL’s second season, the total prize money for the playoff marathon has been increased by $1,000,000. The NHLPA has set aside a bonus pot of $16-million for the Stanley Cup Playoffs. Unlike other professional sports in North America, the truly unique feature is that NHL players and management decide how a club’s share is di...

For those competing every other night during the NHL’s second season, the total prize money for the playoff marathon has been increased by $1,000,000. The NHLPA has set aside a bonus pot of $16-million for the Stanley Cup Playoffs. Unlike other professional sports in North America, the truly unique feature is that NHL players and management decide how a club’s share is divided among the team members. Click the link below to learn more about playoff bonuses along with other interesting financial considerations surrounding the 2018 Stanley Cup Playoffs.

Play-Off Bonuses

April 27, 2018

Opportunity in Canadian Oil & Gas Names

Market Recap & Box Score

The market turnaround that started in March continued into April with global markets rising in tandem. The TSX led the way again in April, up 2.0% on strong commodity performance, particularly oil, with WTI recording a 4.7% gain to follow the 5.4% gain seen in March. The MSCI World (USD) gained 1.4% and the S&P 500 1.0% as earnings season kicks off. So far, the season has been a p...

The market turnaround that started in March continued into April with global markets rising in tandem. The TSX led the way again in April, up 2.0% on strong commodity performance, particularly oil, with WTI recording a 4.7% gain to follow the 5.4% gain seen in March. The MSCI World (USD) gained 1.4% and the S&P 500 1.0% as earnings season kicks off. So far, the season has been a positive one, with 79.4% of companies that have reported exceeding estimates, according to FactSet. Oil’s move helped drive the 1.8% increase on the Bloomberg Commodity Index for the month, offsetting weakness from soft commodities dragged lower by an appreciated USD. As measured by DXY, the USD was up over 2% during the month, stemming some of the weakness that began in late 2016. Aluminum was locked into the centre of Russian-related sanction headlines. The US imposed sanctions on Russian billionaire Oleg Deripaska and several companies which he has influence on, including Rusal, the world’s second largest aluminum company by output. The prospect of such a large volume of US imports coming offline initially forced aluminum prices to their highest level in six years. However, Mr. Deripaska agreed in principal to relinquish control by selling his stake below 50%, allowing prices of aluminum to drop over 10% on 27-Apr on hopes of reduced sanctions.

Rates continue to make headlines, and this month’s breach of 3% on the US 10-year was the first time crossing of the 3% threshold since 2014 where it briefly hit 3.0% before dropping back below 1.5% in Jul-16. However, in 2014 the Fed was still actively pursuing QE and many are watching closely to see what direction it takes in the coming weeks. On the short-end, the 2-year yield adjusted sharply higher during the month to 2.5%, up 56 bps year-to-date as recent inflation and GDP data have increased investors expectations for Fed rate hikes in 2018 (up to 4). While the short- and intermediate-term rates continue to see large moves, the 30-year’s move has been more muted. At 3.1% to end the month, fixed income markets may not be convinced of the long-term growth thesis.

An interesting divergence continues to take place in Canadian oil names. While intuitively, and historically, moves in Canadian oil stocks have followed WTI fairly closely, oil’s rally to end 2017 and into 2018 has not been reflected in the stock prices of Canadian companies in that market. We wrote in Dec-17 about the widened spread between Canadian and US traded oil contracts. However, even after the spread stabilized, it was not until April that Canadian companies started to perform in line with oil, often seeing gains on days that oil saw weakness. Looking at recent price movement and the long-term trend, there may be an opportunity in Canadian oil and gas names that could benefit even if oil stabilizes here.