S&P/TSX Flat After Alarming Consumer Debt Report

Our take on today’s market action.

| More on:
The Motley Fool

Canadian equity markets traded slightly higher on Friday, weighed down by shares of telecom and energy stocks.

The S&P/TSX Composite Index (^OSPTX) closed up 11.31 points, or 0.09%. In the United States, the S&P 500 was off 0.18 points, or 0.01%, in quiet trading.

The big story today was the latest data from StatsCanada. As expected, the financial media choose to lead with the scariest headlines. Namely, household debt-to-disposable income hitting a record 163.7%.

No doubt, surging debt levels are a worrying trend, but there was some good news in this report. What many left out was the fact that household net worth hit a record high of $7.5 trillion. That’s an increase of almost 2% quarter-over-quarter, thanks mostly to rising housing and equity prices.

I’m not sure if there’s a specific investment takeaway from this report. But it’s important to point out the built-in bearish bias whenever the economy is discussed in the media.

South of the border, the U.S. Producer Price Index rose 0.7% year-over-year. That’s the slowest gain in five years. This, coupled with other tame inflation reports, is raising hopes that the Federal Reserve will not taper asset purchases when it meets next week.

In stock specific news, Canada’s Big 3 telecom companies were down hard.Shares of Telus (TSX:T), Rogers Communications (TSX:RCI.B), and BCE (TSX:BCE) were each down 0.81%, 1.30%, and 0.83% respectively.

This coming after the Canadian Radio and Television Commission, or CRTC, has launched a deeper investigation into wholesale wireless roaming rates in the country. The regulatory body has expressed concerns that ‘some wireless companies’ are making it difficult for smaller mobile operators without a national network to compete.

Once again, the telecom industry is feeling the heat as Canada’s public enemy No. 1. And the Conservative government is successfully exploiting this populist anger. Whether this regulatory bite has teeth or just show is a matter of inside political baseball. It has traders spooked today, but whether this will threaten industry profits over the long run remains to be seen.

BlackBerry (TSX:BB, NASDAQ:BBRY) were up 2.9%. BlackBerry, which recently concluded a $1 billion convertible debt offering, has announced an agreement with its debtholders to extend an option deadline attached to the deal. This gives prospective investors a chance to buy up to a further $250 million in convertible debt.

Finally, Potash Corporation of Saskatchewan (TSX:POT) shares were a leader, gaining 1.3% after China’s Sinochem announced a one-year renewal of its three-year exclusive potash deal with Canpotex, the Canadian potash association.

Foolish bottom line
The real action begins next week. As hinted above, the Federal Reserve will meet to discuss its much anticipated interest rate policy decision. And of course, BlackBerry will report release its latest earnings report. So rest up, it’s a busy week ahead.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Disclosure: Robert Baillieul has no positions in any of the stocks mentioned in this article. 

More on Investing

Businessman holding AI cloud
Tech Stocks

2 Stocks That Could Grow Your Portfolio Over the Next Decade

These two TSX stocks could be stellar additions to your long-term portfolio, given their multi-year growth potential and discounted stock…

Read more »

Wireless technology
Tech Stocks

These Tech Stocks Are Growing up to 138% Despite the Recession

Growth stocks like WELL Health Technologies (TSX:WELL) are thriving, despite the recession.

Read more »

close-up photo of investor Warren Buffett
Stocks for Beginners

New to Investing? Here’s 1 of Warren Buffett’s Most Important Quotes

As market uncertainty continues to intensify, here's some advice from the Oracle of Omaha to help you navigate this environment.

Read more »

data analytics, chart and graph icons with female hands typing on laptop in background
Dividend Stocks

Want Easy Passive Income? Go With These 3 Canadian Dividend All-Stars

Are you looking for easy passive income? Here are three Canadian dividend all-stars.

Read more »

Man data analyze
Investing

3 of the Top-Growing Stocks on Earth

Canadians desperate for growth in a shaky market may want to look to growing stocks like Cardinal Health Inc. (NYSE:CAH).

Read more »

Nickel ore is mined from the ground.
Metals and Mining Stocks

Offset Market Volatility With a Shiny Investment

Looking to offset market volatility with a shiny investment you can hold for the long-term? Here’s a precious option to…

Read more »

grow dividends
Tech Stocks

BlackBerry (TSX:BB) Stock: The Best Buy for Your RRSP

BlackBerry stock is still falling after its quarterly result, despite a 28% revenue increase in its Internet of Things segment.

Read more »

green energy
Dividend Stocks

These Monthly Dividend Payers Could Carry Your Portfolio for Years

Building a portfolio takes years. Without further ado, invest in these monthly dividend payers and start earning.

Read more »