On this day in music history – it was a big day, including 1963 when Bob Dylan refused to perform on the Ed Sullivan Show because they wouldn’t let him perform "Talkin’ John Birch Paranoid Blues"; The Jimi Hendrix Experience's “Are you Experienced” debuted in the U.K. in 1967; Mick Jagger married Bianca in 1971; Meat Loaf filed for bankruptcy in 1981; and in 2008, Neil Young had a spider named after him.

Sentiment

Andrew Brenner at National Alliance notes that “investors are underinvested in risk and sentiment is too negative” – that seems to be reflected in this volatility we’re seeing. Can new highs be far away? The American Association of Individual Investors has seen the percentage of bulls plummet to 20.4 per cent almost as low as bullish sentiment in mid-February when the market was plummeting (19.3 per cent bullish sentiment when the S&P 500 was 18.29). There seems to be many good reasons to buy stocks here, even though all the headlines, all the earnings, and low volatility. Oil traded yesterday at the highest level in 2016 (on the big oil, gasoline and distillate inventory drawdowns and today the IEA talking about less supply concerns). Gold is down, though. 

Today’s calendar

Of note will be the continuing parade of earnings (Canadian Tire, Aimia, Quebecor, Gluskin Sheff, Stantec, New Flyer, Enbridge, Crescent Point among others) as well as more U.S. retail (Nordstrom). U.S. initial jobless claims (running near multi-decade lows) and inflation numbers will be watched (tomorrow’s retail numbers are likely the most important of the week) while Canadian economic data will focus on housing with new home prices and a luxury housing report from Royal LePage. We're also watching for the annual meetings for Onex and Enbridge.

Fed speakers

Currency and bond traders will be watching comments from three FOMC voters – Mester (leaning hawkish), George (hawk) and Rosengren (considered a dove although CIBC’s Jeremy Stretch notes that he has recently suggested the market has underestimated the odds of rate hikes this year). With the market decidedly dovish on the pace of rate rises, comments could support the dollar especially in light of the continuing advance in the Atlanta Fed’s GDPNow forecast (now 2.3 per cent). Some suggest none of the talking heads matter, only Yellen and Fischer do. But with the ship so far listed to one side, volatility could be high to any alternate view. For Canadians, obviously, an earlier rate rise in the U.S. and no moves from the Bank of Canada would put upside pressure on the USD and downside on the C$.

Financial services energy exposure

Scotiabank’s financial services analyst summarizes the exposure of lifecos and banks to the energy space in a report released today. In aggregate, direct energy holdings of the life companies are 4 per cent of total assets while loans to energy for the banks 2.1 per cent. Manulife has the highest of the insurers (5.9 per cent direct and indirect). For the banks, as a percentage of total business loans, energy/oil & gas is the highest at BNS (10.1 per cent) followed by National (9.9 per cent). TD has the smallest total (3 per cent). For BNS, total commodities exposure is 18.5 per cent, while National is at 22 per cent.

Research pile

Tricon Capital Group (reported yesterday) is the “best idea within our small cap coverage” says RBC; CPI Card Group downgraded to hold from buy at CIBC on a weaker than expected Q1 and outlook. BMO also downgrades; in the gold space, BMO adjusting its recommended list including downgrades to hold on Agnico Eagle, Franco Nevada, Fortuna Silver and upgrades to outperform (buy) for Coeur Mining, Detour Gold, Pan American Silver, Silver Wheaton, Yamana Gold; Element Financial reiterated as a buy at CIBC (with $22 target);

Luxury real estate

According to a Royal LePage survey, one in four advisors believes that 25 per cent or more of luxury properties are purchased by foreign buyers! Most of the survey data relates to beliefs and thoughts of the advisors, but within the report, the facts show that prices have skyrocketed in the Greater Vancouver area for luxury homes in the past 10 years (+125 per cent). Calgary, Toronto and Montreal have also seen healthy increases of 61 per cent, 69 per cent and 58 per cent, respectively.

On BNN

We’ll be talking mattresses with Sleep Country, why Canada is the better opportunity than the U.S. for equity investors, resources and gold, momentum stocks, global luxury real estate with Christie’s, natural gas and, as well, what’s happening at the Pot Shops in Vancouver. There is lots of green this morning in the equity and oil markets, gold is down.

And the day (my second last day) begins. Enjoy.

Every morning Business Day Host Frances Horodelski writes a "chase note" to BNN's editorial staff listing the stories and events that will be in the spotlight that day. Have it delivered to your inbox before the trading day begins.