Q: With Bank of Canada cutting interest rates and oil up, why would pipelines be lower? Shouldn't this also be good for telcos/pipelines/reits or are institutions positioning themselves in cyclicals for new a economic cycle so these rate dependent areas areas are under pressure. I have noticed Pembina was doing well but has been consistently down for many days. Thank you!
5i Research Answer:
Yes, lower rates are good for these sectors. However, the fact that rates are moving is not news at all. It has been widely expected. The Canadian economy is quite weak, and investor sentiment is low towards the energy sector because of Trump's policies. There has also been a bit of rotation into other sectors as investors become more confident elsewhere. Finally, year end can result in portfolio positioning and some weird movements in stocks.