Author: Consultant

  • Canada expanding assisted suicide law to include the mentally ill, possibly enable ‘mature minors’

    Canada expanding assisted suicide law to include the mentally ill, possibly enable ‘mature minors’

    Medical assistance in dying (MAID) has been available in Canada since 2016 and is set to expand in March 2023, extending eligibility to those with a mental illness. 

    Bill C-7 would allow individuals seeking MAID to apply solely on the basis of a mental disorder. Prior to the bill’s passage, MAID eligibility was based on having a “grievous and irremediable medical condition,” according to a report from the Canadian government on the practice. 

    Creighton School of Medicine professor Charles Camosy said Wednesday on “Tucker Carlson Tonight” the bill would allow “mature minors” to be euthanized by state doctors without the consent of their parents. 

    https://www.foxnews.com/media/canadas-expanding-assisted-suicide-law-include-mentally-ill-enable-mature-minors

  • ECB hikes rates by 75 basis points and announces new terms for European banks

    ECB hikes rates by 75 basis points and announces new terms for European banks

    The European Central Bank announced Thursday a 75-basis-point interest rate hike — its third consecutive increase this year — while also revealing new conditions for European banks.

    Market participants had two questions in mind ahead of the meeting: When will the ECB start reducing its balance sheet, in a process known as quantitative tightening, and what will happen to the lending conditions for banks in the near future?

    The ECB announced Thursday that it was changing the terms and conditions of its targeted longer-term refinancing operations, or TLTROs — a tool that provides European banks with attractive borrowing conditions, designed to incentivise lending to the real economy.

    “The Governing Council … decided to adjust the interest rates applicable to TLTRO III from 23 November 2022 and to offer banks additional voluntary early repayment dates,” the ECB said.

    “In order to align the remuneration of minimum reserves held by credit institutions with the Eurosystem more closely with money market conditions, the Governing Council decided to set the remuneration of minimum reserves at the ECB’s deposit facility rate.”

    Because the ECB has been increasing rates faster than expected in the face of soaring inflation, European lenders are benefiting both from TLTROs and higher interest rates. The situation has been described by some as effectively providing a subsidy to banks.

    “The optics are bad against the backdrop of a historical shock to households’ income, and political pressure cannot be ignored,” Frederik Ducrozet, head of macroeconomic research at Pictet Wealth Management, said in a note last week.

    In addition, the latest rate hike takes the ECB’s main benchmark from 0.75% to 1.5%, a level not seen since 2009 before the sovereign debt crisis. It comes after the central bank rose rates by 50 basis points in July and 75 basis points in September.

    The ECB is dealing with both record-high inflation and a slowing economy, with many economists predicting a recession in the region before the end of the year. It’s a fine balance for the central bank, as if it hikes rates aggressively in an effort to deal with inflation, it could cause even more trouble for the wider economy.

  • U.S. GDP accelerated at 2.6% pace in Q3, better than expected as growth turns positive

    U.S. GDP accelerated at 2.6% pace in Q3, better than expected as growth turns positive

    Gross domestic product was expected to grow at a 2.3% annualized pace in the third quarter, according to Dow Jones.

    This is breaking news. Please check back here for updates.

    https://www.cnbc.com/2022/10/27/us-gdp-accelerated-at-2point6percent-pace-in-q3-better-than-expected-as-growth-turns-positive.html

  • Meltdown as Elon Musk enters Twitter headquarters ahead of takeover: ‘Let that sink in!’

    Meltdown as Elon Musk enters Twitter headquarters ahead of takeover: ‘Let that sink in!’

    Tesla CEO Elon Musk made a big splash on Twitter with a video of himself walking into the tech giant’s headquarters ahead of his takeover of the company. 

    Musk, who is set to officially have ownership of the social media platform by Friday, shared a clip of himself walking into Twitter’s lobby while carrying a sink.

    “Entering Twitter HQ – let that sink in!” Musk exclaimed with a visual pun. 

    https://www.foxnews.com/media/meltdown-elon-musk-enters-twitter-headquarters-ahead-takeover-let-sink

  • CP Rail reports revenue, earnings up on strong demand for potash shipping

    CP Rail reports revenue, earnings up on strong demand for potash shipping

    Canadian Pacific Railway Ltd. CP-T +1.59%increase says its revenue and earnings for the third quarter were up from last year as it saw strong demand for potash shipping and other services.

    The Calgary-based railway says revenues of $2.31-billion for the quarter ending Sept. 30 were up 19 per cent compared with $1.94-billion in the same quarter last year.

    The company says foreign-exchanged adjusted potash revenue was up 48 per cent, intermodal up 44 per cent, automotive up 31 per cent, while energy, chemical and plastics were down 10 per cent.

    Net income of $891-million or 96 cents per share for the quarter was up from $472-million or 71 cents per share for the same quarter last year.

    Core adjusted diluted earnings per share, which exclude significant items and accounting related to its purchase of Kansas City Southern, came in at $1.01, a 15-per-cent increase from a year earlier.

    The company says its reportable train accident frequency was down 76 per cent to a record low of 0.37 per million train-miles from 1.54 in the third quarter of 2021, while its personal injury rate was down 12 per cent to 0.86 injuries per 200,000 employee-hours.

  • Teck Resources exits oil sands with $1-billion sale of Fort Hills stake to Suncor

    Teck Resources exits oil sands with $1-billion sale of Fort Hills stake to Suncor

    Teck Resources Ltd. is exiting the oil sands business with a $1-billion sale of its stake in the Fort Hills oil sands project to Suncor Energy Inc. to concentrate on its base metals operations.

    In the largest oil-sands transaction in years, Suncor will acquire Vancouver-based Teck’s 21.3-per-cent interest, boosting its share to 75.4 per cent and further consolidating oil sands holdings in the region at a time of high oil prices. France’s TotalEnergies owns the remaining interest in Fort Hills, and has said it also plans to part with its oil sands holdings.

    Teck had long signaled that it intended to sell its oil sands holding to focus on mining metals including copper and zinc – crucial for electrifying the economy – and to lower its carbon footprint. When he retired last summer, longtime chief executive officer Don Lindsay said environmentally conscious investors had avoided the Teck’s shares because of the oil sands interest. The company also mines metallurgical coal.

    Suncor, Canada’s largest oil sands producer and the operator of Fort Hills, was widely viewed as the most logical buyer of the Teck interest.

    “This transaction advances our strategy of pursuing industry leading copper growth and rebalancing our portfolio of high-quality assets to low-carbon metals,” Mr. Lindsay’s successor, Jonathan Price, said in a statement. Mr. Price said the company will review where to deploy the proceeds from the sale.

    The deal comes with oil sands-industry profits surging due to high crude prices. The sector is also seeking to improve its reputation with investors, governments and the public through an alliance among the largest companies that has pledged to invest billions of dollars in technology to get to net-zero carbon emissions by 2050.

    In September, TotalEnergies said it plans to spin off its oil sands interests, which also include a 50-per-cent stake in a project called Surmont, into a new publicly traded company. CEO Patrick Pouyanne said the oil sands stakes do not fit with TotalEnergies’s climate strategy.

    The acquisition meets Suncor’s objectives for financial returns and fits with its strategy to “optimize” its holdings around core producing projects, interim CEO Kris Smith said in a statement. It will fund the transaction with cash from asset sales it has in the works, the company said.

    With the transaction, Teck will record an after-tax, non-cash impairment charge $950-million in the third quarter of this year, it said. For its part, Suncor said it will record a non-cash charge of $2.6-billion on its existing interest.

    Fort Hills, located 90 kilometres north of Fort McMurray, Alta., is the country’s newest oil sands mining project, starting operations in 2018 at a construction cost of $17-billion. It was plagued in its early years with operational problems as well as a government-mandated limit on production when the industry faced a squeeze on export pipeline capacity.

    Suncor said on Wednesday that its gross output is expected to be lower than previously projected, and operating costs higher, because of “mine constraints as well as accelerated development of further mine pits for increased sustained long-term production.”

  • Bank of Canada hikes key interest rate by 0.5 percentage points, raising borrowing costs for sixth time in a row

    Bank of Canada hikes key interest rate by 0.5 percentage points, raising borrowing costs for sixth time in a row

    The Bank of Canada increased its benchmark interest rate by 0.5 percentage points, ratcheting up Canadian borrowing costs for the sixth consecutive time this year while warning that economic growth will “stall” in the coming quarters.

    This moves the policy rate to 3.75 per cent for the first time since early 2008. Financial markets had been anticipating a larger 0.75 percentage point rate hike.

    The central bank said that interest rates will likely need to rise further to get decades-high inflation under control. But it struck a more dovish tone than in previous announcements, noting that higher borrowing costs are already squeezing the economy. It said in an updated economic forecast that there is a roughly 50 per cent chance of a recession in Canada next year.

    “Future rate increases will be influenced by our assessments of how tighter monetary policy is working to slow demand, how supply challenges are resolving, and how inflation and inflation expectations are responding,” the bank said in its rate decision statement.

    Live updates: Follow the Bank of Canada’s rate decision

    Rob Carrick: Young people priced out of houses should be loving the rise in interest rates

    The decision caught markets by surprise. Bank of Canada governor Tiff Macklem had been notably hawkish in his communications ahead of the announcement, leading bond traders and private-sector economists to expect a larger rate increase. Many thought the bank would move aggressively to keep pace with the U.S. Federal Reserve to prevent further deterioration of the Canadian dollar.

    The yield on the 2-year-government bond plunged more than 20 basis points following the announcement. The Canadian dollar fell one cent against the U.S. dollar, hitting 73 US cents.

    “In the Bank of Canada’s game of chicken with inflation, central bankers were the first to swerve,” Royce Mendes, head of macro strategy at Desjardins, wrote in a note to clients. “Governing Council still expects that rates will need to rise further, but they are obviously looking to fine-tune policy adjustments more now than they were earlier this year.”

    The bank has raised rates six times since March in one of the fastest monetary policy tightening cycles on record. Higher rates make it more expensive for households and businesses to borrow money, with the goal of curbing demand for goods and services and slowing the pace of consumer price growth.

    The effects of tighter monetary policy are “becoming evident” in interest-sensitive areas of the economy, the bank said. The housing market has entered a lengthy slump, while consumer spending and business investment is softening. Canadian exports are also weakening as key trading partners teeter on the brink of recession.

    The bank slashed its forecast for Canadian economic growth. It now expects 0.9 per cent annual GDP growth next year, down from its previous estimate of 1.8 per cent. While it avoided using the word “recession,” the bank said that an economic contraction is increasingly likely.

    “GDP growth is then projected to slow to be 0 per cent and 0.5 per cent through the end of 2022 and the first half of 2023,” the bank said in its quarterly Monetary Policy Report, published Wednesday. “This suggests that a couple quarters with growth slightly below zero is just as likely as a couple of quarters with small positive growth.”

    This puts the bank in a precarious position. Economic activity is slowing quickly, but inflation remains stubbornly above the bank’s 2-per-cent target. Moreover, bank officials believe there is still “substantial excess demand in the Canadian economy,” which is showing up most clearly in labour shortages and rising service prices.

    Headline consumer price index inflation has fallen in recent months, hitting an annual rate of 6.9 per cent in September, down from a high of 8.1 per cent in June. Still, much of the decline so far has come from lower gasoline prices. Other prices continue to push higher, with nearly two-thirds of the components of the consumer price index seeing annual price increases above 5 per cent.

    “The Bank’s preferred measures of core inflation are not yet showing meaningful evidence that underlying price pressures are easing. Near-term inflation expectations remain high, increasing the risk that elevated inflation becomes entrenched,” the bank said.

    The bank cut its inflation forecast slightly. It now expects CPI inflation to average 6.9 per cent in 2022, down from the previous projection of 7.2 per cent. It sees inflation averaging 4.1 per cent in 2023, down from an earlier forecast of 4.6 per cent, and hitting 2.8 per cent by the fourth quarter of next year.

  • Alphabet misses on earnings as YouTube shrinks; company will cut headcount growth by half in Q4

    Alphabet misses on earnings as YouTube shrinks; company will cut headcount growth by half in Q4

    • Alphabet missed analyst expectations on the top and bottom lines.
    • Revenue at YouTube declined, while analysts were expecting growth of about 3%.
    • Total growth of 6% marked the weakest period of expansion since 2013, other than one period during the pandemic.

    Alphabet shares dropped about 7% in extended trading on Tuesday after the company reported weaker-than-expected earnings and revenue for the third quarter and said it would significantly decrease headcount growth.

    • Earnings per share (EPS): $1.06 vs. $1.25 expected, according to Refinitiv estimates.
    • Revenue: $69.09 billion vs. $70.58 billion expected, according to Refinitiv estimates.
    • YouTube advertising revenue: $7.07 billion vs $7.42 billion expected, according to StreetAccount estimates.
    • Google Cloud revenue: $6.9 billion vs $6.69 billion expected, according to StreetAccount estimates
    • Traffic acquisition costs (TAC): $11.83 vs $12.38 expected, according to StreetAccount estimates

    Revenue growth slowed to 6% from 41% a year earlier as the company contends with a continued downdraft in online ad spending. Other than one period early in the pandemic, it’s the weakest period for growth since 2013.

    YouTube ad revenue slid about 2% to $7.07 billion from $7.21 billion a year ago. Analysts were expecting an increase of about 3%. Alphabet reported overall advertising revenue of $54.48 billion during the quarter, up slightly from the prior year.

    https://www.cnbc.com/2022/10/25/alphabet-googl-q3-2022-earnings-.html

  • Housing, mortgage sectors brace for more pain as Bank of Canada tees up another big rate hike

    Housing, mortgage sectors brace for more pain as Bank of Canada tees up another big rate hike

    The Bank has already hiked the policy rate by three percentage points over the course of the year, bringing it to 3.25 per cent. This aggressive tightening campaign has raised borrowing costs and taken the steam out of the country’s hottest housing markets as more prospective home buyers sit on the sidelines.   

    Existing home prices in Canada have been declining from the $816,720 peak reached in February and checked in at $640,479 in September, according to data from the Canadian Real Estate Association.

    But September saw the first month-over-month decline in Canada’s new home price index since January 2020.

    Though Bank of Montreal chief economist Douglas Porter acknowledged the 0.1 per cent dip wasn’t a big move, he said the index was nevertheless a barometer that measures home price inflation through “replacement costs.”

    “This is at least one area where the (Bank of Canada’s) aggressive tightening campaign is having a direct impact on headline inflation, with more to come,” Porter warned in an Oct. 25 note.  

    Among homeowners, variable-rate mortgage holders are likely to feel the pinch first, said Royce Mendes, managing director and head of macro strategy at Desjardins. Mendes and macro strategy associate Tiago Figueiredo added that they expect the Bank of Canada to raise rates by 75 basis points this week and deliver one more 25-basis-point hike in December, remaining reluctant to forecast anything higher than that.  

    If the widely anticipated 75-basis-point hike comes down the pipeline on Oct. 26 and pushes the policy rate up to four per cent, Desjardins economists believe that homeowners who took out a variable-rate mortgage between May 2020 and July 2022 could be forced to top up their payments.   

    “Admittedly, variable-rate mortgages represent only about one third of total mortgages outstanding, and we’re talking about a subset of that,” Mendes and Figueiredo said in an Oct. 21 note. “But banks are already sending out letters to clients whose variable-rate mortgages owe more interest than their fixed monthly payment obligation. And that’s just the tip of the iceberg.”  

    These impacts are also rippling through the broader mortgage market with shares of the country’s biggest mortgage providers coming under pressure this year. National Bank of Canada analyst Jaeme Gloyn noted that Home Capital Group’s stock is down 38 per cent this year, Equitable Bank slipped 32 per cent, Timbercreek Financial Corp. fell 22 per cent and First National Financial Corp. is off 16 per cent.  

    Gloyn expects these mortgage stocks to be held down by rising rates for the rest of the year. Housing market risks also remain elevated, Gloyn cautioned, noting that the average price of a low-rise home in the Greater Toronto Area is down seven per cent year over year as of the first week of October.  

    “Overall, we believe Mortgage Land’s relative underperformance will persist in the near term, at least until uncertainty surrounding these risks diminish,” Gloyn said in an Oct. 24 note, adding that the bank was lowering price targets across the board.  

    “What could cause a shift in our view?… We have a keen eye on the employment outlook and central bank positioning. We believe more widespread employment losses will pressure mortgage stocks lower, potentially to crisis trough levels that would offer investors a more attractive entry. A dovish turn from the Federal Reserve and/or Bank of Canada could also cause a change in our currently softer view.”