Monday, August 21, 2006, 4:15 PM ET (Thomson Financial Corporate
Services): While the U.S. markets were down on higher oil prices and
disappointing earnings from giant home improvement chain Lowe's, the
Canadian markets were lifted as energy and metals soared and Biovail was
upgraded. The TSX is waiting on tonight's deadline for industry approval of
the lumber agreement; strong hints were given today that it will be passed.
Analysts are also expecting major banks to report good operating quarter
results during the course of the next two weeks, as interest rates have not
risen high enough for customers to stop asking for loans.
* The S&P/TSX Stock Exchange Composite Index climbed 92.10 points, or
0.76 points.
* A new global producer of copper and zinc will be created when
EuroZinc buys Lundin Mining. Each EuroZinc share will be exchanged for
0.0952 of a Lundin share. The end result will be called the Lundin Mining
Corporation, and will have a capitalization of C$3.3 billion.
* In the pharmaceutical industry, there was good news for Biovail, as
it was upgraded by BMO Capital Markets from "Market Perform" to
"Outperform" status. BMO believes that the legal troubles with Wellbutrin
will cease to affect Biovail by the end of the year, and "at this point,
the upside appears larger than the downside."
* Despite optimistic forecasts of a 0.2% rise, Canadian retail sales in
June instead fell 0.2% to C$32.53 billion, after a revised 0.5% drop in
May, said Statistics Canada. Hit by high fuel prices, consumers pulled back
on spending on manufactured goods, clothing, and particularly new and used
automobiles. With the cut in the GST by one percentage point to 6% on 1st
July, analysts suspect July's figures will be higher.
* September crude rose above $72 again after last week's drop, as Iran
declared it would not suspend its uranium enrichment program, and then
turned away inspectors from its facilities. Oil closed up US$1.31 at
US$72.45. The price buoyed the oil markets even as FirstEnergy Capital
released its annual study speculating that skyrocketing operating and
labour costs might begin cutting into oil patch profits.
* Gold rose US$13.50 to close at US$635.20, as Iran's defiance, the
rise in crude, and a fall in the U.S. dollar combined to lift the yellow
metal. Companies such as Kinross, Bema Gold, and Yamana showed increases of
between 3-7%.
* General Motors announced plans to build its redesigned Camaro at a
plant they had planned to close in Oshawa, ON, after the completion of
negotiations with the Canadian Auto Workers Union. The welcome move would
save approximately 2700 jobs, and the first new car is expected to roll off
the line in 2008.
-- Carolyn.Crapo@contractor.Thomson.com; Thomson Financial Corporate Services
This is Thomson Financial Corporate Services Canadian Commentary, which
is updated twice daily. The information herein is believed to be true and
accurate, we take no responsibility for inaccurate information and reserve
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SOURCE Thomson Financial Corporate Group
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