Author: Consultant

  • Key inflation gauge for the Fed rose 0.5% in September, in line with expectations

    Key inflation gauge for the Fed rose 0.5% in September, in line with expectations

    • The core personal consumption expenditures price index in September increased 0.5% from the previous month and 5.1% from a year ago.
    • Including food and energy, PCE inflation rose 0.3% for the month and 6.2% on a yearly basis.
    • Personal spending rose 0.6%, more than expected amid the rise in prices.
    • Compensation costs increased 1.2% in the third quarter, in line with estimates.

    An economic gauge that the Federal Reserve follows closely showed that inflation stayed strong in September but mostly within expectations, the Bureau of Economic Analysis reported Friday.

    The core personal consumption expenditures price index increased 0.5% from the previous month and accelerated 5.1% over the past 12 months, the report showed. The monthly gain was in line with Dow Jones estimates, while the annual increase was slightly below the 5.2% forecast.

    Including food and energy, PCE inflation rose 0.3% for the month and 6.2% on a yearly basis, the same as in August.

    The report comes as the Fed is prepared to enact its sixth interest rate increase of the year at its policy meeting next week. In an effort to combat inflation running at its fastest pace in nearly 40 years, the Fed has been raising rates, with increases totaling 3 percentage points thus far.

    Markets widely expect the Fed to enact its fourth straight 0.75 percentage point increase at the meeting, but possibly slow down the pace of hikes after that.

    The BEA also reported that personal income increased 0.4% in September, one-tenth of a percentage point above the estimate. Spending as gauged through personal consumption expenditures increased 0.6%, more than the 0.4% estimate.

    However, when adjusted for inflation, spending rose just 0.3%. Disposable personal income, or what is left after taxes and other charges, rose 0.4% on the month but was flat on an inflation-adjusted basis.

    The personal saving rate, which measures savings as a share of disposable income, was 3.1% for the month, down from 3.4% in August.

    A separate release Friday showed that employment costs rose 1.2% for the third quarter, in line with estimates, according to the Bureau of Labor Statistics. On an annual basis, the employment cost index increased 5%, slightly lower than the 5.1% pace in the second quarter.

    Fed officials watch Friday’s data points closely for clues about where costs are headed, particularly with a tight labor market in which there are 1.7 jobs per every available worker, according to recent BLS data.

    The Fed prefers the PCE price reading to the more widely followed consumer price index from the BLS. The BEA measure adjusts for consumer behavior, in particular substitution of less expensive goods, to determine cost-of-living increases rather than simple price moves.

    Markets think the Fed might downshift the pace of its rate hikes ahead. Futures pricing Friday morning indicated a nearly 60% chance that the central bank will increase rates 0.5 percentage point in December.

  • Covid cases, controls spread in China

    Covid cases, controls spread in China

    • “Since the 20th National Party Congress kicked off on 16 October, domestic Covid case numbers have been clearly on an upward trajectory,” Nomura’s chief China economist Ting Lu and a team said in a report Thursday.
    • The Nomura analysts said they expect China’s stringent Covid controls will remain at least until March, “when the political reshuffle will be fully completed and the new leaders fully take over the cabinet.”
    • On Wednesday, Premier Li Keqiang headed a State Council meeting that called for promoting a pickup in growth in the fourth quarter, from the third, state media said

    BEIJING — Covid controls in China have tightened in the last two weeks after more cities reported virus outbreaks.

    The restrictions on business and social activity affected 9.2% of China’s gross domestic product as of Thursday, up from 7% on Oct. 16, according to Nomura’s model.

    “Since the 20th National Party Congress kicked off on 16 October, domestic Covid case numbers have been clearly on an upward trajectory,” the firm’s chief China economist Ting Lu and a team said in a report Thursday. “The national lockdown situation has been getting … significantly worse.”

    https://www.cnbc.com/2022/10/28/covid-cases-controls-spread-in-china.html

  • Economic Calendar: Oct 31 – Nov 4

    Economic Calendar: Oct 31 – Nov 4

    Monday October 31

    China PMI

    Japan industrial production, retail sales and consumer confidence

    Euro zone real GDP and CPI

    Germany retail sales

    (10:30 a.m. ET) U.S. Chicago PMI for October.

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

    Earnings include: Berkshire Hathaway Inc.; Capital Power Corp.; Capstone Mining Corp.; Cargojet Inc.; Gibson Energy Inc.; Mondelez International Inc.; Stryker Corp.

    Tuesday November 1

    China and Japan manufacturing PMI

    (9:30 a.m. ET) Canada’s S&P Global Manufacturing PMI for October.

    (9:45 a.m. ET) U.S. S&P Global Manufacturing PMI for October.

    (10 a.m. ET) U.S. ISM Manufacturing PMI for October. The Street is expecting a reading of 50.0, down from 50.9 in September.

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

    (10 a.m. ET) U.S. Job Openings and Labour Turnover Survey for September.

    (6:30 p.m. ET) Bank of Canada Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers appear before the Standing Senate Committee on Banking, Commerce and the Economy.

    Also: Canadian and U.S. auto sales for October and U.S. Fed meeting begins.

    Earnings include: Advanced Micro Devices Inc.; Colliers International Group Inc.; Eli Lilly and Co.; Ero Copper Corp.; International Petroleum Corp.; Ovintiv Inc.; Pfizer Inc.; T-Mobile US Inc.; Thomson Reuters Corp.; Topaz Energy Corp.; Uber Technologies Inc.

    Wednesday November 2

    Euro zone manufacturing PMI

    Germany trade surplus and unemployment

    (8:15 a.m. ET) U.S. ADP National Employment Report for October.

    (2 p.m. ET) U.S. Fed announcement with chair Jerome Powell’s press briefing to follow.

    Earnings include: Ballard Power Systems Inc.; Bausch + Lomb Corp.; Brookfield Infrastructure Partners LP; Brookfield Renewable Partners LP; Cenovus Energy Inc.; Ceridian HCM Holding Inc.; CVS Health Corp.; First Capital Reality Inc.; GFL Environmental Holdings Inc.; Great-West Lifeco Inc.; Green Thumb Industries Inc.; Maple Leaf Foods Inc.; MEG Energy Corp.; Nutrien Ltd.; Qualcomm Inc.; Secure Energy Services Inc.; Suncor Energy Inc.; Sun Life Financial Inc.; Waste Connections Inc.

    Thursday November 3

    (8:30 a.m. ET) Canada’s merchandise trade balance for September.

    (8:30 a.m. ET) Canadian building permits for September.

    (8:30 a.m. ET) U.S. initial jobless claims for week of Oct. 29. Estimate is 222,000, up 5,000 from the previous week.

    (8:30 a.m. ET) U.S. productivity for Q3 (preliminary reading). The Street expects an annualized rate rise of 0.2 per cent with unit labour costs up 4.0 per cent.

    (8:30 a.m. ET) U.S. goods and services trade deficit for September.

    (10 a.m. ET) U.S. factory orders for September. Consensus is a month-over-month rise of 0.3 per cent.

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

    (1:30 p.m. ET) Bank of Canada Deputy Governor Paul Beaudry makes opening remarks in Ottawa at the John Kuszczak Memorial Lecture

    Also: Canada’s federal fiscal update

    Earnings include: Amgen Inc.; Barrick Gold Corp.; Baytex Energy Corp.; BCE Inc.; Bombardier Inc.; Canadian Natural Resources Ltd.; ConocoPhillips; Enerplus Corp.; Fairfax Financial Holdings Ltd.; Gildan Activewear Inc.; IGM Financial Inc.; Kinaxis Inc.; Labrador Iron Ore Royalty Corp.; Lightspeed Commerce Inc.; Open Text Corp.; Parkland Fuel Corp.; Pembina Pipeline Corp.; Resolute Forest Products Inc.; Restaurant Brands International Inc.; RioCan REIT; Starbucks Corp.; TC Energy Corp.; TransAlta Renewables Inc.; Turquoise Hill Resources Ltd.; Wheaton Precious Metals Corp.

    Friday November 4

    Japan and euro zone PMI

    (8:30 a.m. ET) Canadian employment for October. The Street expects an increase of 0.1 per cent, or 10,000 jobs from September with the unemployment rate rising 0.1 per cent to 5.3 per cent.

    (8:30 a.m. ET) U.S. nonfarm payrolls for October. The consensus forecast is a rise of 200,000 from September with the unemployment rate increasing 0.1 per cent to 3.6 percent.

    (10 a.m. ET) Canada’s Ivey PMI for October.

    Earnings include: Alibaba ADR; ARC Resources Ltd.; Canada Goose Holdings Inc.; Duke Energy Corp.; Enbridge Inc.; Magna International Inc.; SNC-Lavalin Group Inc.; Telus International Inc.

  • Air Canada’s seat sales double, loss narrows as travel rebounds despite airport woes

    Air Canada’s seat sales double, loss narrows as travel rebounds despite airport woes

    Air Canada AC-T +3.21%increase more than doubled its seat sales in a chaotic summer as a rebound in travel allowed Canada’s largest airline to narrow its losses.

    For the three months ending on Sept. 30, Air Canada lost $508-million, or $1.42 a share, compared with a loss of $640-million ($1.79) in the same period of 2021, Air Canada said on Friday.

    Revenue for the period totalled $5.3-billion, up from $2.1-billion in the third quarter of 2021 and nearly matching the $5.5-billion mark set in the same period in 2019, before the pandemic grounded much of the world’s airlines and sent the industry into crisis.

    Michael Rousseau, chief executive officer of Air Canada, said on a conference with analysts on Friday he was “very pleased” with the financial results. “They mark an import step in our recovery,” he said, pointing to the quarter’s $644-million operating income and 12.1-per-cent operating margin, the first positive numbers since the pandemic began.

    Air Canada is emerging from the pandemic “stronger, more resilient and adaptable,” he said. “COVID has been one of the industry’s greatest challenges in both severity and duration.”

    Air Canada to buy 15 more Canadian-built Airbus A220-300 aircraft

    In a statement accompanying the earnings release, Air Canada said it flew about 11.5 million passengers in the third quarter, and expects strong demand to persist.

    “Air Canada’s solid third-quarter results stem from the ongoing restoration of our extensive network, an improved operational performance, our modern and efficient fleet, as well as leading products and services and an incredible team of employees,” Mr. Rousseau said in a press release.

    As travellers returned to flying in the summer, Canada’s major airports were overwhelmed and understaffed. Passengers faced long lines, holds on planes and lengthy delays retrieving their baggage. The companies and government agencies that operate at the airports blamed a shortage of workers and COVID-19 protocols.

    “Thanks to the hard work and commitment of our employees, after a difficult June and July, we saw significant operational improvement throughout August and September, with the operation today now on par with prepandemic levels,” Mr. Rousseau said. “Still, we know many customers experienced disruptions travelling this summer, and we sincerely regret any inconveniences that have occurred.”

    Investors reacted to the financial results by driving up Air Canada’s share price on the Toronto Stock Exchange by 4 per cent to $20. The share price has fallen by 9 per cent this year.

    In the summer of 2019, before the pandemic, Air Canada made a profit of $636-million ($2.25 a share).

    In third-quarter financial results released on Friday before markets opened, Air Canada said its operating capacity more than doubled from the same period of 2021. It flew at 79-per-cent of prepandemic seat capacity. Passenger revenue of $4.8-billion tripled from the third quarter of 2021, and operating revenue increased by 2.5 times.

    For the fourth quarter of 2022, Air Canada said it will fly about 85 per cent of its prepandemic capacity.

    Walter Spracklin, a Royal Bank of Canada stock analyst, said the results beat his expectations. Higher ticket prices offset fuel expenses, and fuller planes helped reduced per-seat costs, Mr. Spracklin said in a note to clients. “Overall, the quarter was above consensus and our estimates, indicating demand for travel was exceptionally strong,” he said.

  • Imperial Oil Q3 Profit More Than Doubles Compared With Year Ago, Raises Dividend

    Imperial Oil Q3 Profit More Than Doubles Compared With Year Ago, Raises Dividend

    CALGARY — Imperial Oil Ltd. raised its quarterly dividend by nearly 30 per cent as it reported its third-quarter profit more than doubled compared with a year ago.

    The company, which also says it plans to buy back up to $1.5 billion worth of its shares, will now pay a quarterly dividend of 44 cents per share, up from its previous dividend of 34 cents per share.

    The increased payment to shareholders came as Imperial said its net income totalled $2.03 billion or $3.24 per diluted share for the quarter ended Sept. 30, up from a profit of $908 million or $1.29 per diluted share in the same quarter a year earlier.

    Revenue and other income totalled $15.22 billion, up from $10.23 billion in the third quarter of 2021.

    The company says upstream production in the third quarter averaged 430,000 gross oil-equivalent barrels per day compared with 435,000 in the same quarter last year.

    In its downstream business, Imperial says quarterly refining throughput averaged 426,000 barrels per day, up from 404,000 in the third quarter of 2021, as capacity utilization hit 100 per cent compared with 94 per cent a year earlier.

    This report by The Canadian Press was first published Oct. 28, 2022.

    Companies in this story: (TSX:IMO)

  • Suncor To Acquire Teck Resources’ Stake In Fort Hills Oilsands Project For $1B

    Suncor To Acquire Teck Resources’ Stake In Fort Hills Oilsands Project For $1B

    CALGARY — Suncor Energy says it has agreed to buy Teck Resources Ltd.’s 21.3 per cent stake in the Fort Hills oilsands project for approximately $1 billion.

    The Calgary-based oil and gas company says upon closing of the deal, Suncor’s overall share in Fort Hills will increase to 75.4 per cent.

    Suncor says in a release Wednesday that the deal will be funded by cash from asset sales currently underway.

    With the completion of the deal, the other partner in the Fort Hills project will be TotalEnergies EP Canada Ltd., which holds a 24.6 per cent stake.

    The transaction is subject to regulatory approval and is expected to close in the first quarter of 2023.

    The Fort Hills oilsands project is located in Alberta’s Athabasca region, 90 km north of Fort McMurray.

    This report by The Canadian Press was first published Oct. 26, 2022

    Companies in this story: (TSX:SU)

  • IEA sees India’s imports of natural gas, oil zoom by 2030

    IEA sees India’s imports of natural gas, oil zoom by 2030

    India’s import of natural gas will double and that of oil will rise 50% by 2030 due to soaring domestic demand while production remains subdued, International Energy Agency (IEA) said in its latest outlook released on Thursday.

    The demand for natural gas in the country would nearly double to 115 billion cubic meters (bcm) in 2030 from 66 bcm in 2021, with most of the growth coming from manufacturing and other industry, according to IEA’s World Energy Outlook based on the stated policies ..

    Read more at:
    https://economictimes.indiatimes.com/industry/energy/oil-gas/iea-sees-indias-imports-of-natural-gas-oil-zoom-by-2030/articleshow/95130631.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

  • CN Rail Boosts Outlook

    CN Rail Boosts Outlook, Reports Revenue Up On Higher Volumes, Rates

    The Canadian Press – Canadian Press – Tue Oct 25, 4:08PM CDT

    A CN Rail locomotive pulls auto carrier cars in Dartmouth, N.S. on Thursday, Nov. 25, 2021. THE CANADIAN PRESS/Andrew Vaughan

    MONTREAL — CN Rail has boosted its financial outlook for the year as it reported gains in revenue and adjusted profits in the third quarter on higher volumes and rates, while net income was down.

    The Montreal-based railway says net income for the quarter ending Sept. 30 was $1.46 billion, down from $1.69 billion for the same quarter last year.

    Adjusted profits for the last quarter were unchanged at $1.46 billion, while last year’s adjusted profits were $1.08 billion after several exclusions including an $886 million payout related to its failed takeover of a U.S. railway.

    Revenue of $4.51 billion for the quarter was up from $3.59 billion last year as the company brought in higher fuel surcharge revenue, raised freight rates, and saw higher volumes of coal exports and U.S. grain shipments.

    The railway says it now expects to deliver free cash flow of about $4.2 billion in 2022, up from a range of between $3.7 billion and $4 billion it gave in an April guidance.

    It also now expects to deliver adjusted, diluted earnings per share growth of about 25 per cent, up from the 15 to 20 per cent it guided in April.

    This report by The Canadian Press was first published Oct. 25, 2022.

    Companies in this story: (TSX:CNR)