Price Of Oil, Canadian Dollar And TSX Futures All Heading Down
It is shaping up to be a disastrous day in the stock markets, as North American markets are set to following early downturns being witnessed on the European exchanges, and the Dow Jones Industrial Average offering early indications it is set to plunge. Meanwhile, t he price of oil is crashing and the S&P/TSX 60 Futures are dropping. How this will play out as the week progresses is difficult to predict. The main question is: How bad will it get?
In premarket activity, the Dow is shaping up to take dive of more than 1,000 points as the spread of the coronavirus continues sparking the cancellation of events across North America, Europe and Asia.
The Big Story Is Dropping Price Of Oil
In Toronto, TSX futures are losing ground. But the big story for the Canadian economy will be the price of oil, which has been slashed by 30% after a deal between OPEC and other partners fell apart on the weekend, with Russia refusing to limit its output. The move then triggered Saudi Arabia to ramp up production, launching a price war.
The price of West Texas Intermediate now hovers at just over $32 a barrel. Oil is headed to its lowest levels since the outbreak of the Gulf War 29 years ago.
Early Monday, the International Energy Agency reported that worldwide demand for oil is set to contract this year, the first time in more than 10 years.
The agency said it expects the demand for oil to drop to 99.9 million barrels a day, down 90,000 barrels per day.
The Canadian dollar is down, too. It is trading this morning at 73.33 cents against the U.S. greenback.
Housing Starts On Tap
The Canada Mortgage and Housing Corp is set to release its latest Housing Starts, while Statistics Canada will release Building Permits for February today, which will be the only economic indicators offered this week.
Housing starts in January were up 8.8% compared with December, with more than 213,000 new units under construction. The jump represented the biggest increase in housing starts in four months.
Building permits for January were also up, rising 7.4% compared to December, according to StatsCan.
Canadian Companies Reporting This Week
It will be a relatively quite week on the earnings front with few big Canadian companies scheduled to release their latest earnings figures.
Those that will include Boston Pizza (TSX:BPF_u), Kinder Morgan (NYSE:KMI) Canada Ltd (TSX:KML) and WestJet Airlines Ltd (TSX:WJA) on Monday, and Quebecor Inc (TSX:QBRa) on Thursday.