By Angela Harmantas
When a government posts a budget surplus, should its citizens be applauding or demanding more from them? Today on Before the Bell we pose a somewhat contrarian question about the news that Canada’s government posted a $1.9 billion surplus in 2014-15. Also, we look at oil stocks that may benefit from OPEC’s claim that the US shale boom is over, and examine how the world is reacting to the anticipated Federal Reserve meeting starting tomorrow – here’s what you need to know today:
Yesterday I spoke to a reader who had some strong thoughts on the federal government’s recent $1.9 billion surplus announcement. “Why are we applauding this?” she asked me. “Shouldn’t the government be reinvesting that money back into the economy in the form of more social services or loans to small businesses?” She certainly has a point – if a business had $1.9 billion in cash lying around, shareholders would no doubt be livid if a significant portion was not reinvested back into the company, or at least paid back to investors in the form of a dividend. A budget surplus may look good on paper, but it’s how the government chooses to handle that extra revenue that is the key metric we should be judging. I’d really like to hear your thoughts on this: first, do you agree with our reader’s frustrations? If so, where do you think the money should be reinvested? I’ll post some of your comments in the blog as I get them.
The US shale boom is over, according to OPEC. According to their latest monthly oil report, the cartel insisted that the US was finally beginning to feel the squeeze of low oil prices and cut its forecast for US production in 2015 by 100,000 barrels a day to 13.75 million. Of course, OPEC is highly political, but its seemingly ironclad grip on oil prices softened when the US brought unprecedented supply to the market, so it will be interesting to see what effect these new statements could have on prices and stocks (oil prices settled at US$44 on Monday). With this news in mind, our analysts put together a list of 5 oil stocks that could benefit from OPEC’s latest prediction. Is this finally some good news for beleaguered oil producers?
Ahead of the Federal Reserve’s meeting this week, here are a few quick hits about what the raising of interest rates may mean for the economy as a whole and certain stocks in particular: Bloomberg experts debate whether a 25 basis point rate hike matters; The Globe and Mail talks about the effect that the spectre of a rate hike is having on gold bulls; CNBC like housing and airline stocks to ride out the uncertainty; and the Economic Times posits that a rate hike may be positive for Indian stocks. We’ll all know soon enough.
Do you have a burning question you’d like answered by an investment expert or analyst? Let me know and I can post the answer here in the blog. Contact me by email at angela@smallcappower.com or on Twitter: @aharmantas.
Interested in previous Before the Bell blogs? 
