"Rates and Oil are my macro reasons – pretty straightforward macro risks I don’t want exposure to, currently," writes Hedgeye CEO Keith McCullough this morning.
Here's our Financials analyst Josh Steiner's most recent update:
"The situation North of the Border remains compelling and supports of our short CIBC (CM) call. Nothing has changed with respect to our bearish view on both the property and banking sectors of Canada. The energy markets of Alberta/Saskatchewan continue to struggle under the weight of oil still half its price 2.5 years ago.
British Columbia is also now beginning a correction with Vancouver home sales down 39% Y/Y in September – the fastest pace of decline on record since the BC government imposed a 15% foreign buyer tax on homes back in August. The last stronghold remains Toronto, which for now, is hanging in. Some of the housing demand that would have flowed into Vancouver is now flowing instead into Toronto.
One of the keys to this idea is the Chinese buyer, which is showing increasing signs of stress. It is becoming harder for Chinese to move money out of the country beyond the $50,000/person allowed per year. This situation (capital outflows) will come to a head soon we think, causing a more aggressive clampdown on the part of the Chinese government, which will finally put this Canadian trade into reverse."
Click here to read Steiner's original stock report on CIBC.