Author: Consultant

Canada’s inflation rate perked up in October, weakening the case for the Bank of Canada to make another outsized cut to interest rates next month.

The Consumer Price Index rose at an annual rate of 2 per cent in October, rising from 1.6 per cent in September, Statistics Canada said Tuesday in a report. Financial analysts were expecting an upturn to 1.9 per cent.

The inflation rate was guided higher by less flattering year-over-year calculations for gasoline prices and hefty increases in property taxes. On a monthly basis, the CPI rose 0.4 per cent.

Reaction and analysis: Canada’s inflation rate jumps back up to 2% in October

The Bank of Canada is unlikely to be fazed by the increase in headline inflation, which has been at or below the central bank’s 2-per-cent target for three consecutive months. The BoC is firmly entrenched in a rate-cutting cycle to stimulate the economy, flagging concerns that inflation could settle below the target.

But Tuesday’s report also showed that certain core measures of inflation – which strip out volatile movements in the CPI – heated up last month. This could prompt the BoC to shift back to rate cuts of a quarter-percentage-point, after the central bank made a half-point reduction in October.

“The BoC is likely to view today’s data release as a minor setback,” said James Orlando, senior economist at Toronto-Dominion Bank, in a client note. “Inflation had become a background worry, and while it isn’t raising any red flags yet, today’s data is a reminder that getting price growth to settle at 2 per cent will take time.”

Once again, gasoline had a tangible effect on the numbers. Prices rose slightly on a monthly basis, while year over year, the decline in October was less than that of September, thus acting as less of a drag on the headline inflation rate.

Excluding gas, the CPI rose by an annual 2.2 per cent in October, matching the previous two months.

Property taxes rose 6 per cent in October, year over year, up from 4.9 per cent in 2023 and the largest increase since 1992. Statscan makes an annual update to its reading of property taxes every October.

The trend differs for other housing costs. Shelter prices rose 4.8 per cent in October, year over year, compared with 5 per cent in September. Mortgage interest cost increases are slowing as the BoC cuts interest rates, and rents rose by an annual 7.3 per cent, down from 8.2 per cent in September.

Core inflation is likely to turn heads at the Bank of Canada. The central bank’s preferred measures rose at an average annual rate of 2.55 per cent in October, up from 2.35 per cent in September. This suggests inflation is proving a bit stickier than previously assumed.

How market bets and economist views for future BoC rate cuts have shifted after today’s inflation data

Investors are dialling back their expectations for the Bank of Canada, partially because of Tuesday’s results. Since June, the BoC has trimmed its benchmark interest rate on four occasions, taking it to 3.75 per cent from 5 per cent.

Traders now see a roughly 30-per-cent chance that the BoC cuts rates by a half-point at the Dec. 11 decision, down from around 40 per cent before the CPI report, according to Bloomberg data. Statscan is releasing several major economic reports in the coming weeks, giving central bankers plenty of additional data to mull over.

Still, expectations around monetary policy have shifted abruptly in recent weeks, particularly in the United States. Federal Reserve chair Jerome Powell said last week that the U.S. central bank wasn’t in a rush to lower interest rates, and investors are pricing in just two or three cuts by the fall of 2025.

Monday November 18

Japan core machine orders

Euro zone trade surplus

(8:15 a.m. ET) Canadian housing starts for October. Estimate is an annualized rate rise of 2.8 per cent.

(8:30 a.m. ET) Canada’s international securities transactions for September.

(10 a.m. ET) U.S. NAHB Housing Market Index for November.

Also: G20 leaders’ summit in Rio de Janeiro (through Tuesday).

—

Tuesday November 19

Euro zone CPI

(8:30 a.m. ET) Canadian CPI for October. The Street is forecasting a rise of 0.3 per cent from September and up 1.9 per cent year-over-year.

(8:30 a.m. ET) Canada’s household and mortgage credit for September.

(8:30 a.m. ET) U.S. housing starts for Ocrober. Consensus is an annualized rate decline of 1.4 per cent.

(8:30 a.m. ET) U.S. building permits for October. Consensus is an annualized rate rise of 1.2 per cent.

Earnings include: George Weston Ltd.; Lowe’s Companies Inc.; Medtronic PLC; Walmart Inc.

—

Wednesday November 20

Japan’s trade deficit and machine tool orders

UK CPI

(8:30 a.m. ET) Canada’s construction investment for September.

Earnings include: Metro Inc.; Nvidia Corp.; Palo Alto Networks Inc.; Target Corp.; TJX Companies Inc.

—

Thursday November 21

Euro zone and UK consumer confidence

(8:30 a.m. ET) Canada’s industrial product and raw materials price indexes for October. Estimate are month-over-month increases of 1.5 per cent and 2.5 per cent, respectively.

(8:30 a.m. ET) U.S. initial jobless claims for week of Nov. 16. Estimate is 220,000, up 3,000 from the previous week.

(8:30 a.m. ET) U.S. Philadelphia Fed Index for November.

(10 a.m. ET) U.S. existing home sales for October. Consensus is an annualized rate rise of 2.3 per cent.

(10 a.m. ET) U.S. leading indicator for October. The Street is forecasting a month-over-month decline of 0.3 per cent.

Also: Quebec’s fall fiscal update

Earnings include: Deere & Co.; Intuit Inc.

—

Friday November 22

Japan CPI and PMI

Euro zone PMI

Germany real GDP

(8:30 a.m. ET) Canadian retail sales for September. Estimate is a gain of 0.3 per cent August.

(8:30 a.m. ET) Canada’s new housing price index for October. Estimate is a rise of 0.1 per cent from September and up 0.2 per cent year-over-year.

(9:45 a.m. ET) U.S. S&P Global PMIs for November.

(10 a.m. ET) U.S. University of Michigan Consumer Sentiment Index for November.

Earnings include: G Mining Ventures Corp.

TORONTO, Nov. 5, 2024 /CNW/ – (TSX: IFC)  

Highlights

• Organic operating DPW^1,2 growth of 6%, excluding acquisitions and exits, led by continued momentum in Personal lines
• Combined ratio¹ of 103.9% included 22 points of catastrophe losses, offsetting otherwise strong underlying performances across all geographies
• Net operating income per share¹ was $1.01 (and EPS of $1.06), despite $5.03 of catastrophe losses, with double-digit growth in investment and distribution income
• Operating ROE¹ remained strong at 15.8% over the last 12 months, up 4 points year-over-year, with BVPS¹ of $90.60, up 3% sequentially, despite the unusually challenging operating environment 
• Strong and resilient balance sheet with $2.6 billion of total capital margin¹ and an adjusted debt-to-total capital ratio¹ of 20.3%

Charles Brindamour, Chief Executive Officer, said: 

“The devastating effects from severe weather events in the quarter have impacted the lives of tens of thousands of customers. Our employees were on the ground within the first hours of these events providing immediate assistance to affected communities. We are leveraging our competitive advantages, which include On Side Restoration and Intact Service Centres, to minimize losses for our customers. In this context, our operations have shown great financial resiliency, reflected by our strong capital position and mid-teens operating ROE over the last 12 months. It’s in these challenging moments that we demonstrate our purpose – to help people, businesses and society prosper in good times and be resilient in bad.”

Read more at newswire.ca

MDA Space Ltd. reported $29.5 million in third-quarter net income, up from $9.3 million in the same quarter last year, as its revenue rose by nearly 40 per cent compared with a year ago.

The space technology company says the profit amounted to 24 cents per diluted share for the quarter ended Sept. 30 compared with a profit of eight cents per diluted share a year earlier.

Revenue totalled $282.4 million, up from $204.7 million in the same quarter last year.

The increase came as Satellite systems revenue amounted to $167.6 million, up from $94.4 million a year ago, while robotics and space operations revenue totalled $66.5 million, up from $61.9 million. Geointelligence revenue was $48.3 million compared with $48.4 million in the same quarter last year.

On an adjusted basis, MDA says it earned 28 cents per diluted share in its latest quarter compared with an adjusted profit of 18 cents per diluted share a year ago.

In its outlook, MDA says it now expects its full-year revenue to be between $1.045 billion and $1.065 billion, up from earlier expectations for between $1.02 billion and $1.06 billion.

This report by The Canadian Press was first published Nov. 15, 2024.

U.S. gasoline inventories fell to their lowest levels in two years as fuel supplies drew down unexpectedly last week amid strong demand, while crude oil stockpiles rose by more than expected, the Energy Information Administration (EIA) said on Thursday.

Gasoline stocks fell 4.4 million barrels in the week to Nov. 8 to 206.9 million barrels, their lowest since November 2022, compared with analysts’ expectations in a Reuters poll for a 600,000-barrel build.

East Coast gasoline inventories slipped to their lowest since April 2023, and in the Midwest to their lowest since last November.

Distillate stockpiles, which include diesel and heating oil, fell by 1.4 million barrels in the week to 114.4 million barrels, versus expectations for a 200,000-barrel rise, the EIA data showed.

Total products supplied, a proxy for demand, jumped to 21.6 million barrels per day (bpd) in the week, up from 19.7 million bpd. The four-week average for demand is about 1.7 per cent above last year’s levels.

Gasoline demand, meanwhile, gained 6 per cent in the week to 9.4 million bpd, while distillates demand jumped 17 per cent to 4.1 million bpd.

“Product supplies are very tight. That big draw in gasoline is definitely raising some eyebrows,” said Phil Flynn, an analyst with Price Futures Group.

U.S. gasoline futures spiked after the surprise draw, while U.S. heating oil futures briefly climbed after the data was released.

Brent and U.S. crude futures edged higher after the data showed the surprise fuel stocks draw.

“It’s very bullish on gasoline, and looks bullish for the crack spreads,” Flynn said.

Crude inventories rose by 2.1 million barrels to 429.7 million barrels, more than analysts’ expectations for a 750,000-barrel rise.

Stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures fell by 688,000 barrels.

Net U.S. crude imports fell by 321,000 bpd to 3.1 million barrels, as exports rose by 590,000 bpd to 3.4 million bpd.

Refinery crude runs rose by 175,000 bpd and refinery utilization rates rose by 0.9 percentage point to 91.4 per cent of total capacity.

Ovintiv Inc. OVV-T +3.25%increase is streamlining its operations with a deal to buy assets in Alberta’s Montney region while off-loading its holdings in Utah.

The oil and gas producer said Thursday it was paying about $3.3-billion in cash for 44,110 hectares in the Montney from Paramount Resources Ltd. POU-T +15.73%increase, while it was selling about 51,000 hectares of largely undeveloped land in Utah’s Uinta Basin for $2.8-billion.

“The Montney is the second largest undeveloped oil resource in North America, and with this acquisition, we have solidified our position as the premier operator in the play,” said Ovintiv chief executive Brendan McCracken in a statement.

The new assets will add about 900 total net well locations and 70,000 barrels of oil equivalent per day of production, while the Uinta holdings produce about 29,000 barrels of oil and condensate production per day.

Ovintiv said the new assets are strategically located near its current operations and have access to midstream infrastructure with available capacity.

The deal, which also includes Ovintiv transferring its Horn River assets in B.C. to Paramount and taking possession of Paramount’s Zama assets in Alberta, will consolidate Ovintiv’s focus on the Montney as well as the Permian Basin and Anadarko Bason in the southern United States.

The streamlining will lead to about $175-million in annual cost synergies, the company said.

The sale of the Uinta holdings will go toward covering the cost of the Montney acquisition, while Ovintiv has also suspended its share buyback program until it has paid back the cash borrowed for the deal.

Following the closing of the deal, Ovintiv said it plans to run an average of three rigs in the Montney, five in the Permian and one to two rigs on its Anadarko holdings.

The company expects capital spending of about $3.1-billion next year and production to average of about 205,000 barrels a day of oil and condensate.

ATCO Ltd. (ATCO or the Company) today announced third quarter 2024 adjusted earnings of $91 million ($0.81 per share), $10 million ($0.10 per share) higher compared to $81 million ($0.71 per share) in the third quarter of 2023.

Read more at newswire.ca

 Brookfield Corp. reported its third-quarter distributable earnings totalled US$1.33 billion, up from $1.15 billion in the same quarter a year ago.

The global investment firm, which keeps its books in U.S. dollars, says its distributable earnings amounted to 84 cents US per share for the quarter ended Sept. 30, up from 73 cents US per share a year ago.

Distributable earnings before realizations amounted to 80 cents US per share in the company’s latest quarter, up from 67 cents US per share in the same quarter last year.

Brookfield president Nick Goodman says the company’s financial performance in the third quarter was strong, delivering record cash earnings from its base businesses.

Revenue for the quarter totalled US$20.62 billion, down from US$24.44 billion in the same quarter last year.

Brookfield reported US$64 million or a penny US per share in net income attributable to its shareholders for its third quarter, down from US$230 million or 12 cents US per share in the same quarter last year.

This report by The Canadian Press was first published Nov. 14, 2024.

anadian Utilities Limited (Canadian Utilities or the Company) today announced third quarter 2024 adjusted earnings of $102 million ($0.38 per share), which were $15 million ($0.06 per share) higher compared to $87 million ($0.32 per share) in the third quarter of 2023. 

Read more at newswire.ca