Making sense of the markets this week: February 13 + MORE Feb 11th

Each week, Cut the Crap Investing founder Dale Roberts shares financial headlines and offers context for Canadian investors. 

Earnings season continues, the halftime report

Last year’s Q4 financial reporting seems to be the most “normal” earnings season we’ve had in the past two years, with companies beating earnings expectations by amounts similar to long-run averages. Corporate profitability remains strong. Here is the latest report card for Q4 results-to-date, courtesy of DataTrek:

76% of reporting S&P 500 companies beat Wall Street earnings estimates. That is in line with the 5-year average but below the 83% beat rate of the last year.The average earnings beat is 8.2% above consensus. That is below the 5-year (8.6%) and 1-year (15.7%) averages.77% of reporting companies have beaten Wall Street revenue estimates. That is essentially in line with the 1-year average (78%) and well ahead of the 5-year average (68%).The average revenue beat is 2.8% above consensus…

During my time as the resident mortgage expert on CP24’s Hot Property TV show, I started using the phrase “drive until you qualify” to describe the advice given to home buyers struggling to get into hot real estate markets. The idea was that you should expand your search from high-priced urban centres to less-expensive suburbs.

In the years since, property prices have continued to rise to record-breaking highs, leading buyers to drive even further from city cores in search of more affordable homes. But now that even small-town prices are reaching new highs, are hour-long commutes enough? Or should “fly until you qualify” be the new mantra for those looking to get into the enticing world of home ownership?

Have we hit a crisis point in Canadian real estate? 

Housing affordability seems to be at a crisis stage for Canadians. Economists and financial analysts warn of the Canadian real estate market’s vulnerability, and everyone seems to have an opinion on who or what is to blame…