Author: Consultant

• The core personal consumption expenditures price index increased 0.6% for the month, and was up 4.7% from a year ago.
• Headline inflation increased 0.6% and 5.4% respectively. All the numbers were higher than estimates.
• The numbers suggest inflation accelerated to start the new year, putting the Fed in a position where it likely will continue to raise interest rates.

https://www.cnbc.com/2023/02/24/key-fed-inflation-measure-rose-0point6percent-in-january-more-than-expected.html

Monday February 27

Euro zone consumer and economic confidence

(8:30 a.m. ET) Canada’s current account balance of Q4.

(8:30 a.m. ET) U.S. durable and core orders for January. The Street is projecting month-over-month declines of 3.9 per cent and 0.1 per cent, respectively.

(10 a.m. ET) U.S. pending home sales for January. Consensus is an increase of 1.0 per cent from December.

(10:30 a.m. ET) U.S. Dallas Fed Manufacturing Activity for February.

Earnings include: Ivanhoe Mines Ltd.; Li Auto Inc.; MEG Energy Corp.; NexGen Energy Ltd.; Occidental Petroleum Corp.; Ovintiv Inc.; Workday Inc.

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Tuesday February 28

Japan industrial production and retail sales

(8:30 a.m. ET) Canadian real GDP for Q4. The Street expects an annualized rate rise of 1.5 per cent.

(8:30 a.m. ET) Canada’s monthly GDP for December. Consensus is flat from November.

(8:30 a.m. ET) U.S. goods trade deficit for January.

(8:30 a.m. ET) U.S. wholesale and retail inventories for January.

(9 a.m. ET) U.S. S&P CoreLogic Case-Shiller Home Price Index (20 city) for December. The Street is forecasting a decline of 0.5 per cent month-over-month and rise of 4.8 per cent year-over-year.

(9 a.m. ET) U.S. FHFA House Price Index for December. Consensus is a drop of 0.2 per cent from November but up 6.5 percent year-over-year.

(9:45 a.m. ET) U.S. Chicago PMI for February.

(10 a.m. ET) U.S. Conference Board Consumer Confidence Index for February.

Also: Alberta and B.C. budgets and Canada’s Capital Expenditures Survey for 2023.

Earnings include: Bank of Montreal; Bank of Nova Scotia; Canfor Corp.; First National Financial Corp.; George Weston Ltd.; Green Thumb Industries Inc.; Laurentian Bank of Canada; Target Corp.; Winpak Ltd.

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Wednesday March 1

China, Japan and Euro zone manufacturing PMI

(10 a.m. ET) U.S. ISM Manufacturing PMI for February.

(10 a.m. ET) U.S. construction spending for January.

Also: Canadian and U.S. auto sales for February.

Earnings include: Capital Power Corp.; Descartes Systems Group Inc.; Kinaxis Inc.; Lowe’s Companies Inc.; National Bank of Canada; Royal Bank of Canada; Salesforce Inc.; Tamarack Valley Energy Ltd.; Tricon Capital Group Inc.

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Thursday March 2

Japan capital spending and consumer confidence

Euro zone CPI and jobless rate

(8:30 a.m. ET) U.S. initial jobless claims for week of Feb. 25. Estimate is 197,000, up 5,000 from the previous week.

(8:30 a.m. ET) U.S. productivity for Q4. The Street expects an annualized rate rise of 2.6 per cent with unit labour costs up 1.4 per cent.

Earnings include: AltaGas Ltd.; Atco Ltd.; Broadcom Inc.; Canadian Natural Resources Ltd.; Canadian Utilities Ltd.; Canadian Western Bank; Chartwell Retirement Residences; Costco Wholesale Corp.; Crescent Point Energy Corp.; Curaleaf Holdings Inc.; E-L Financial Corp. Ltd.; Freehold Royalties Ltd.; Parkland Fuel Corp.; Secure Energy Services Inc.; Storage Vault Canada Inc.; Toronto-Dominion Bank

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Friday March 3

China, Japan and Euro zone services PMI

Germany trade surplus

(8:30 a.m. ET) Canadian labour productivity for Q4. Estimate is flat from Q3.

(8:30 a.m. ET) Canadian building permits for January. Estimate is a month-over-month increase of 1.0 per cent.

(10 a.m. ET) U.S. ISM Services PMI for February.

Earnings include: SNC-Lavalin Group Inc.

TD Bank Group TD-T +0.49%increase says it has received all of the regulatory approvals required under its deal to buy U.S. investment bank Cowen Inc.

The bank expects to close the acquisition on March 1, subject to other customary closing conditions.

TD announced its deal to buy Cowen in a transaction valued at US$1.3-billion in August 2022.

It has said the acquisition will help TD Securities accelerate its long-term growth strategy in the U.S.

Cowen chair and CEO Jeffrey Solomon is expected join the senior leadership of TD Securities once the deal closes.

The Canadian bank is still working to secure regulatory approval for its US$13.4-billion deal to take over Tennessee-based First Horizon Corp.

Canadian Imperial Bank of Commerce CM-T +2.74%increase reported lower first-quarter profit but beat analysts’ estimates as the lender set aside fewer loan loss reserves and benefited from a boost in trading activity.

CIBC earned $432-million or 39 cents per share, in the three months that ended Jan. 31. That compared with $1.9-billion or $2.01 per share, in the same quarter last year.

Adjusted to exclude certain items, including a provision for a lawsuit with a New York hedge fund, the bank said it earned $1.94 per share. That beat the $1.73 per share analysts expected, according to Refinitiv.

The bank kept its quarterly dividend unchanged at 85 cents per share.

CIBC is the first major Canadian bank to report earnings for the fiscal first quarter. The rest of the Big Six banks release financial results next week.

In the quarter, CIBC set aside $295-million in provisions for credit losses – the funds banks set aside to cover loans that may default. That was lower than analysts anticipated and included $36-million against loans that are still being repaid, based on models that use economic forecasting to predict future losses. In the same quarter last year, CIBC had recorded $75-million in provisions.

Total revenue rose 8 per cent in the quarter, to $5.9-billion. But expenses ticked higher to $4.5-billion, which the bank said was driven by higher compensation for staff and strategic investments.

“We have clear momentum in attracting and deepening client relationships, a resilient capital position, and strong risk management and credit quality,” chief executive officer Victor Dodig said in a statement.

Profit from Canadian personal and small business banking was $589-million, down 14 per cent from a year earlier, largely on higher provision for credit losses, as well as expenses related to the bank’s acquisitions of the Costco credit card portfolio in Canada and employee compensation. But loan balances were up 8 per cent year over year.

The Canadian commercial and wealth management division generated $469-million of profit, up a slight 2 per cent as higher revenue and lower expenses were offset by bigger loan loss provisions. Commercial loan balances increased by 14 per cent from a year earlier.

Capital markets posted $612-million of profit, rising 13 per cent as activity in its global markets and direct financial services businesses offset a slower investment banking quarter.

Profit from the bank’s U.S. arm fell to $201-million as the unit set aside more money for potential bad loans.

CIBC took a previously-announced legal provision of $1.17-billion after a U.S. court found the bank liable for losses incurred by a New York hedge fund in debt deals related to the 2008 U.S. housing crisis. Last week, the lender said that it agreed to pay US$770-million Cerberus Capital Management LP, less than the amount it had set aside. CIBC said that the difference will be reflected in the bank’s second-quarter financial results.

U.S. stocks fell sharply Friday after the Federal Reserve’s preferred inflation gauge showed a stronger-than-expected increase in prices last month.

The Dow Jones Industrial Average fell by 364 points, or 1.1%. The S&P 500 and Nasdaq Composite slid 1.4% and 2.0%, respectively. The Dow fell as much as 510 points, or 1.54%, earlier in the trading session.

Boeing shares slipped more than 4% after the company temporarily halted delivery of its 787 Dreamliners over a fuselage issue. Shares of Microsoft and Home Depot also fell more than 1%.

The major averages are headed for a losing week. The S&P 500 is down 2.9% and is set for its worst week since Dec. 9. The Dow is down nearly 3% this week and headed for its fourth straight losing week. The Nasdaq is 3.5% lower, and on pace for its second negative week in three.

The core personal consumption expenditures price index, the Fed’s preferred measurement of inflation, rose 0.6% in January and 4.7% from the prior year, coming above economists’ expectations.

The report added to worries that the Fed may have to keep rates higher for longer to quell inflationary pressures.

However, B. Riley’s chief market strategist Art Hogan doesn’t expect the market to remain in a protracted downturn.

“This market has been pretty jittery this week, so any disappointing data is going to have an outsized impact as we’re seeing in the early movements,” Hogan said. “This may test its recent lows, but I don’t think it’s going to push us to new lows. I think it’s just more confirmation that the Fed is likely going to go to 5% and 5.25%, which is consensus.”

“Therefore, I don’t think this is enough to say the rally of 2023 is over. I just don’t think that’s the case. I think a lot of this is baked into what our expectations are for monetary policy already,” he added.

A measure of the prices that people living in the United States, or those buying on their behalf, pay for goods and services. The PCE price index is known for capturing inflation (or deflation) across a wide range of consumer expenses and reflecting changes in consumer behavior.

https://www.bea.gov/data/personal-consumption-expenditures-price-index

CI Financial Corp. (“CI”) (TSX:CIX.TO) today released financial results for the quarter ended December 31, 2022.

“CI’s strong performance during an extended period of financial market volatility reflects the continued successful execution of the three pillars of our corporate strategy,” said Kurt MacAlpine, CI Chief Executive Officer.

“In the fourth quarter, robust net flows in our Canadian and U.S. businesses, along with the acquisition of three best-in-class U.S. registered investment advisor firms, drove double-digit asset growth.

“In Canadian asset management, we continue to see the benefits of the transformation of our investment management function from a group of independent boutiques into an integrated, global platform,” Mr. MacAlpine said. “In the fourth quarter, our Canadian retail business delivered $1.6 billion in positive net flows, versus net redemptions of more than $10 billion for the Canadian industry overall. Our relative investment results continue to be strong and our investment professionals received extensive industry recognition for their performance, winning 14 Refinitiv Lipper Fund Awards and 39 FundGrade A+ Awards for 2022.

“Our wealth management businesses had total net flows in 2022 of $6.6 billion in the U.S. and $3.8 billion in Canada, a testament to the excellence of our advisor teams and our differentiated approach to wealth management – which offers exceptional value to clients, especially during these uncertain times,” Mr. MacAlpine said. “We continue to make significant investments into advancing the technology, support and services of our Canadian wealth platform.

https://www.businesswire.com/news/home/20230224005170/en/

Oil prices fell by $2 per barrel to their lowest in two weeks on Wednesday, as investors became more concerned that recent economic data will mean more aggressive interest rate increases by central banks, pressuring economic growth and fuel demand.

Brent crude futures settled $2.45, or 3%, lower at $80.60 per barrel. The West Texas Intermediate crude futures (WTI) dropped $2.41, or 3%, to end at $74.05 a barrel.

The settlement levels were the lowest for both benchmarks since Feb. 3.

https://www.cnbc.com/2023/02/22/oil-steadies-as-investors-await-us-fed-reserve-comments.html

Oil prices rose on Friday and were close to trading positive for the week as the prospect of deeper-than-expected cuts in Russian supplies largely offset concerns that rising interest rates will dampen demand this year. 

Crude prices marked a strong recovery from recent losses on Thursday as a Reuters report suggested that Russia plans to cut up to 25% of oil exports from its western ports in March, which is more than the 500,000 barrel per day supply cut announced earlier.

Brent oil futures rose 0.3% to $82.75 a barrel, while West Texas Intermediate crude futures jumped 0.8% to $75.97 a barrel by 21:06 ET (02:06 GMT). Both contracts were trading down less than 0.5% each for the week, having largely trimmed their initial losses.

The prospect of deeper Russian supply cuts also helped markets look past a bigger-than-expected build in U.S. crude inventories, which grew for a ninth consecutive week amid slowing consumption in the country.

Fears of a further slowdown in crude demand weighed on oil prices this week, amid a flurry of hawkish signals and economic data. Signs of resilience in the U.S. jobs market, coupled with high inflation readings for January and the fourth quarter bolstered the Fed’s hawkish stance. 

Strength in the dollar also weighed on crude markets, given that a stronger greenback makes oil more expensive for international buyers.

Focus is now on a reading on the Personal Consumption Expenditures price index– the Fed’s preferred inflation gauge- for more cues on monetary policy. The reading is expected to reiterate that inflation remained elevated through January. 

Fourth-quarter U.S. GDP data was revised lower on Thursday, indicating that rising interest rates may have had a deeper than expected impact on the U.S. economy so far. While slowing growth bodes poorly for crude demand, it could also reduce the economic headroom the Fed has to keep raising rates.

High inflation readings from Singapore, the Eurozone and Japan this week also raised concerns over tightening monetary conditions in the rest of the globe. Oil prices are trading lower for the year amid persistent fears of a global recession this year.

Still, oil bulls are holding out for a recovery in Chinese demand after the world’s largest oil importer relaxed most anti-COVID measures earlier this year.

But early economic indicators from the country show that parts of the economy are still struggling in the aftermath of the pandemic.