Saudi Arabia Is Making a High-Risk $1 Trillion Bet on Tourism
The kingdom must overcome a conservative image and concern about human rights. Visit the desert oasis town of AlUla to understand the challenge.
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The kingdom must overcome a conservative image and concern about human rights. Visit the desert oasis town of AlUla to understand the challenge.
Jury selection was completed Friday for Donald Trump’s first criminal trial, setting the stage for opening arguments Monday in a New York case accusing the former president of falsifying business records to conceal a sex scandal before the 2016 election.
Higher-than-expected interest rates amid persistent inflation are perceived as the biggest threat to financial stability among market participants and observers, according to the Federal Reserve.
Fifth Third Bancorp jumped the most in four months, leading bank stocks higher, with Chief Executive Officer Tim Spence predicting that income from lending has bottomed out.
China’s securities regulator said it will encourage the nation’s companies to list in Hong Kong as it unveiled a package of measures to bolster the city’s position as an international financial hub.
Jan 10, 2017
Macquarie Research is downgrading a slate of Canadian lenders, citing increased risk of a major housing correction. In a research note, Macquarie analyst Jason Bilodeau wrote that the firm was cutting CIBC, Genworth MI and Home Capital Group due to concerns the domestic housing market has overextended itself.
“Most relevant metrics are currently at unprecedented levels. [Household] leverage is at all-time highs. Home prices relative to income are 2.5 [standard] deviations above their historical average,” Bilodeau wrote. “Many key metrics are at or above levels seen in the U.S. prior to its most recent housing crisis and are growing worse.”
The research firm acknowledged calls for a major housing correction are “hardly new,” but the data are “starting to confirm problems in the most extended markets.”
The MLS benchmark home price in Toronto rose more than 17 per cent over the course of 2016, and benchmark prices in the red-hot Vancouver market rose 17.8 per cent over the course of the last year. A combination of British Columbia’s 15 per cent tax hike on foreign buyers and new mortgage stress tests have helped curtail activity in the Vancouver market, as sales volume plunged nearly 40 per cent in December.
Macquarie said its base case remains a material moderation, not a full-on crash, but said high valuations in the banking sector leave the trio of downgraded names at risk.
“The recent pace of price appreciation is nearly unprecedented, housing is more important to the economy than it has ever been and fiscal policy is already highly accommodative,” Bilodeau wrote. “At the same time, bank stocks are trading near peak multiples.”
TD remains Macquarie’s one outperform-rated bank, due to its U.S. exposure.