Markets

Canada Stocks Close Higher; Valeant, Bombardier In The News; Momentum Turns Positive

After rallying late in Friday's session to close higher and snap a three day losing streak, Canada stocks built on that Monday in gaining 76 points or 0.52% to 14,680 as data showing the fastest pace of manufacturing growth of the year in China gave renewed hope that nation will soon start buying more commodities from resources rich Canadian companies.

Most sectors were higher driven by gains in Metals and Mining but Info Tech bucked the trend.

Of commodities, gold futures dropped for a sixth straight day with many investors showing an appetite for risk over an appetite for a safe-haven asset like gold. Meanwhile, Bloomberg reported Monday afternoon that brent crude dropped to the lowest level in almost three weeks as OPEC production climbed and Libya said an export terminal would reopen. The European benchmark's premium to West Texas Intermediate oil narrowed.

Valeant Pharmaceuticals (VRX.TO) gained 2.7%. It was again in the news, this time as Pershing Square Capital Management LP - the biggest shareholder in Valeant's target Allergan Inc. ( AGN ) - called for a special shareholder meeting to remove most of AGN's board in order for a deal to go through. Valeant could take its US$53.8 billion takeover bid directly to Allergan's shareholders.

Canada's Bombardier (BBD-B.TO) has narrowed the possible cause of an engine failure on its CSeries jet to a few possible areas and hopes to understand more this week, the head of its aerospace operations said on Monday, Reuters reported. The Wall Street Journal reported overnight that Bombardier still expects its new CSeries jetliner to enter service in 2015 in the wake of a major engine failure during testing last week that an initial probe suggested may stem from an oil-related problem.

Bombardier - which lost more than 1% Monday - has been downgraded at RBC to Sector Perform from Outperform and had its price target cut to $4 from $5. According to BNN, RBC said it thought the development risk with its CSeries was easing, before the latest incident. Also reportedly cites increased costs for Bombardier.

Short term momentum on the TSX has turned positive as the MACD (moving average convergence divergence) index generate a buy signal. This occurs when the spread (the 5-day moving average minus the 13-day moving average) crosses above the 6-day moving average of the spread.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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