Moody's says Canada's banks could survive a housing crash of 25% — but could you? + MORE Jun 20th

NEW YORK, N.Y. – Stocks that moved substantially or traded heavily Monday:
JD.com Inc., up 93 cents to $21.06
China’s second largest e-commerce site announced a deal with Wal-Mart, which will take a 5 per cent stake in JD.com.
FedEx Corp., up $2.22 to $164.47
Federal prosecutors abruptly moved to dismiss charges that FedEx knowingly delivered illegal prescription drugs to dealers and addicts.
EOG Resources Inc., up $2.30 to $83.19
Energy-company stocks climbed with the price of oil, which rose almost 3 per cent.
Wells Fargo & Co., up 33 cents to $46.93
Bond yields jumped, which could help banks by sending interest rates higher.
Amazon.com Inc., up $7.62 to $714.01
The e-commerce giant was one of the biggest gainers as consumer stocks rose.
Duke Energy Corp., down 98 cents to $82
Utility companies lagged the market as investors sold safe-play stocks and made riskier picks.
General Electric Co., up 23 cents to $30.83
Machinery-company stocks were some of the biggest gainers as stocks rallied Monday…

 

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Canada’s big banks would survive even a serious downturn in the housing market, but it could still cost them almost $12 billion, a new report from Moody’s says.

TORONTO – Ratings agency Moody’s says that despite soaring home prices and household debt levels, Canadian banks could weather the effects of a severe housing crisis.
Moody’s says it conducted stress tests to determine the impact on major Canadian banks in the event of a 25 per cent drop in home prices countrywide.
The analysis also included an additional 10 per cent decline in Ontario and British Columbia, where prices have skyrocketed in recent years.
Who’s to blame for high home prices »
In a report published Monday, the ratings agency says that under such a scenario total direct losses to the banking system would reach almost $18 billion. However, Moody’s says the banks would be able to generate internal capital to cover those losses within several quarters.
The ratings agency says the negative impacts of a housing downturn in Canada would be reduced by a number of factors that differentiate Canada from U.S. mortgage markets.
Those factors include government-guaranteed mortgage creditor and lender insurance, as well as lower rates of subprime lending and a lower prevalence of certain kinds of securitization practices…

The credit-rating agency raises concerns about the country’s biggest lenders’ vulnerability to broader issues such as high consumer debt