Author: Consultant

Gold prices fell for a second straight session on Monday as the dollar held firm near last week’s four-month peak versus major peers on investor optimism around Donald Trump’s presidential victory.

Spot gold dipped half a percent to $2,671.44 per ounce, while U.S. gold futures were down 0.6 percent at $2,677.50.

Trump’s re-election boosted the dollar and Treasury yields, making non-yielding assets like gold less appealing to investors.

Analysts predict Trump’s re-election may favor corporates through deregulation, mergers and acquisitions and proposed tax cuts, but policies such as increased tariffs could result in an uptick in inflation and complicate the Federal Reserve’s interest-rate plans.

Federal Reserve Bank of Minneapolis President Neel Kashkari indicated at the weekend that tariffs would hurt long-term inflation if global trade partners were to strike back.

According to CME Fedwatch, traders currently bet on a 65.9 percent chance for a 25-basis point rate cut in December, and a 34.1 percent chance that rates will remain unchanged.

In economic releases, U.S. reports on consumer and producer prices, retail sales and industrial production due later in the week may provide further insights into the health of the world’s largest economy as the Presidency and Senate falls into Republican hands, presenting a clear path for Trump to enact any major policy changes.

The Bank of Japan board members said they need to be cautious on the timing of future rate hike, a summary of opinions showed on Monday.

“As the Bank has been expecting to raise the policy interest rate at a moderate pace, it has time to monitor the future course of the U.S. economy, including that after the presidential election,” one member was quoted as saying at the October monetary policy meeting.

Another member said it is necessary to take time and exercise caution when raising the policy interest rate.

One board member said the BoJ should communicate effectively its core message that “if the outlook for economic activity and prices will be realized, the BoJ will continue to raise the policy interest rate accordingly.”

At the October meeting, the board had maintained the key rate at around 0.25 percent, which was the highest since late 2008.

The bank had ended its negative interest rate policy in March and last lifted the benchmark rate in July to the current level.

The Chinese economy still faces the risk of slipping into a deflationary trap, Capital Economics’ economist Gabriel Ng said.

Data released by the National Bureau of Statistics on Saturday showed that consumer price inflation softened to 0.3 percent in October from 0.4 percent in September. Moreover, this was the weakest in four months. Meanwhile, core inflation that excludes prices of food and energy rose to 0.2 percent from 0.1 percent in the previous month.

Data showed that producer prices continued to decline in October. Prices were down 2.9 percent annually after falling 2.8 percent in the previous month.

Inflation data suggests that recent stimulus efforts are having some effect, the economist said. In the near-term, the fiscal boost from local governments deploying existing funds should lift inflation further, he noted.

However, the economist observed that fiscal support is still over-reliant on investment rather than consumption, suggesting that supply-demand imbalances and overcapacity will remain a persistent structural issue.

Moreover, the government has not revealed any concrete plans for a major fiscal expansion next year without which the economy risks slipping deeper into deflation, he said.

December Nymex natural gas (NGZ24) on Friday closed down by -0.024 (-0.89%)

Dec nat-gas prices posted moderate losses on Friday, weighed down by mild US autumn weather that will reduce heating demand for nat-gas.  Forecaster Maxar Technologies said Friday that forecasts shifted warmer across parts of the central US for November 13-17 and that above-normal temperatures will persist in the eastern half of the country through November 22.

Lower-48 state dry gas production Friday was 100.6 bcf/day (-4.3% y/y), according to BNEF.  Lower-48 state gas demand Friday was 77.2 bcf/day (-0.3% y/y), according to BNEF.  LNG net flows to US LNG export terminals Friday were 13.4 bcf/day (+16.1% w/w), according to BNEF.

An increase in US electricity output is positive for nat-gas demand from utility providers.  The Edison Electric Institute reported Wednesday that total US (lower-48) electricity output in the week ended November 2 rose +1.24% y/y to 73,690 GWh (gigawatt hours), and US electricity output in the 52-week period ending November 2 rose +1.56% y/y to 4,161,739 GWh.

Thursday’s weekly EIA report was bearish for nat-gas prices since nat-gas inventories for the week ended November 1 rose +69 bcf, above expectations of +68 bcf and well above the 5-year average build for this time of year of +32 bcf.  As of November 1, nat-gas inventories were up +4.2% y/y and were +5.8% above their 5-year seasonal average, signaling ample nat-gas supplies.  In Europe, gas storage was 95% full as of November 3, above the 5-year seasonal average of 93% full for this time of year.

Baker Hughes reported Friday that the number of active US nat-gas drilling rigs in the week ending November 8 was unchanged at 102 rigs, modestly above the 3-1/3 year low from September 6 of 94 rigs.  Active rigs have fallen since posting a 5-year high of 166 rigs in Sep 2022, up from the pandemic-era record low of 68 rigs posted in July 2020 (data since 1987).
 

WASHINGTON — President-elect Donald Trump announced late Sunday that Tom Homan, the former acting director of U.S. Immigration and Customs Enforcement who backed his controversial “zero tolerance” policy, will be his administration’s “border czar.”

“I am pleased to announce that the Former ICE Director, and stalwart on Border Control, Tom Homan, will be joining the Trump Administration, in charge of our Nation’s Borders (‘The Border Czar’), including, but not limited to, the Southern Border, the Northern Border, all Maritime, and Aviation Security,” Trump said on Truth Social.

“I’ve known Tom for a long time, and there is nobody better at policing and controlling our Borders,” the post continued. “Likewise, Tom Homan will be in charge of all Deportation of Illegal Aliens back to their Country of Origin. Congratulations to Tom. I have no doubt he will do a fantastic, and long awaited for, job.”

Homan touts hard-line immigration views and previously vowed to “run the biggest deportation force this country has ever seen.”

He was an early supporter of the Trump administration’s “zero tolerance” policy, which led to thousands of families being separated at the southern border. Trump eventually signed an executive order in 2018 reversing the family separation policy after public outcry.

https://www.cnbc.com/2024/11/11/trump-announces-tom-homan-as-incoming-border-czar.html

Oil prices fell about 2 per cent on Monday, after China’s stimulus plan disappointed investors seeking fuel demand growth in the world’s No. 2 oil consumer and as the U.S. dollar edged higher.

Brent crude futures fell $1.48, or 2 per cent to $73.29 a barrel by 1302 GMT while U.S. West Texas Intermediate crude futures were at $68.78 a barrel, down $1.60, or 2.3 per cent.

Both benchmarks fell more than 2 per cent on Friday.

The U.S. dollar index – a measure of its value relative to a basket of foreign currencies – slightly overshot the highs seen right after the U.S. presidential election with markets still waiting for clarity about future U.S. policy.

A stronger dollar makes greenback-denominated commodities such as oil more expensive for holders of other currencies and tends to weigh on prices.

In China, consumer prices rose at the slowest pace in four months in October while producer price deflation deepened, data showed on Saturday, even as Beijing doubled down on stimulus to support the sputtering economy.

“Chinese inflation figures were again weak, with the market fearing deflation, particularly as the yearly change in the producer price index fell further into negative territory … Chinese economic momentum remains negative,” said Achilleas Georgolopoulos, market analyst at brokerage XM.

The latest support measures will not revive China’s oil demand growth or crude oil imports, said Tamas Varga, analyst at oil broker PVM.

“After last week’s U.S. presidential election attention is slowly drifting back to the underlying fundamentals,” Varga said.

Oil prices also eased after concerns about potential supply disruptions from storm Rafael in the U.S. Gulf of Mexico subsided.

More than a quarter of U.S. Gulf of Mexico oil and 16 per cent of natural gas output remained offline on Sunday, according to the offshore energy regulator.

Looking ahead, there were also concerns that U.S. oil and gas output could rise under the new Trump administration although analysts say 2025′s production forecast is unlikely to change.

“We think producers may think twice about turbocharging U.S. supply in an era when OPEC+ has already staked out plans to gradually raise production targets over the course of 2025,” Tim Evans of Evans Energy said in a note.

Trump’s election promise of hiking import tariffs to boost the U.S. economy has clouded the global economic outlook although expectations that he could tighten sanctions on OPEC producers Iran and Venezuela and cut oil supply to global markets partly caused oil prices to gain more than 1 per cent last week.

Monday November 11

Canadian Remembrance Day (stock markets open, bond markets closed)

U.S. Veterans Day (stock markets open, bond markets closed)

China CPI, PPI, aggregate yuan financing, new yuan loans and money supply

Japan banking lending

Earnings include: NuVista Energy Ltd.; RioCan REIT; Seabridge Gold Inc.; Sienna Senior Living Inc.

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Tuesday November 12

Japan machine tool orders

Germany CPI

(6 a.m. ET) U.S. NFIB Small Business Economic Trends Survey for October.

(8:30 a.m. ET) Canadian building permits for September. Estimate is a decline of 1.0 per cent from August.

(11 a.m. ET) U.S. New York Fed Survey of Consumer Expectations for October.

(2 p.m. ET) U.S. Senior Loan Officer Opinion Survey for October.

Earnings include: CAE Inc.; Dentalcorp Holdings Ltd.; Finning International Inc.; Headwater Exploration Inc.; Home Depot Inc.; H&R REIT; Linamar Corp.; Occidental Petroleum Corp.; Orla Mining Ltd.; Peyto Exploration & Development Corp.; Shopify Inc.; Spotify Technology SA

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Wednesday November 13

(8:30 a.m. ET) U.S. CPI for October. The Street is projecting a rise of 0.2 per cent month-over-month and 2.6 per cent year-over-year.

(2 p.m. ET) U.S. budget balance for October.

Earnings include: CCL Industries Inc.; Cisco Systems Inc.; Hudbay Minerals Inc.; Hut 8 Mining Corp.; Loblaw Companies Ltd.; Maple Leaf Foods Inc.; Northland Power Inc.; SmartCentres REIT; Stelco Holdings Inc.; Suncor Energy Inc.

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Thursday November 14

Euro zone real GDP and industrial production

(8:30 a.m. ET) U.S. initial jobless claims for week of Nov. 9. Estimate is 224,000, up 3,000 from the previous week.

(8:30 a.m. ET) U.S. PPI Final demand for October. Consensus is a rise of 0.2 per cent from September and up 2.2 per cent year-over-year.

(3 p.m. ET) U.S. Fed chair Jerome Powell speaks on the economic outlook.

Earnings include: Alibaba ADR; Applied Materials Inc.; Atco Ltd.; Boralex Inc.; Brookfield Corp.; Canadian Utilities Ltd.; Chartwell Retirement Residences; Palo Alto Networks Inc, Walt Disney Co.

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Friday November 15

China industrial production, retail sales and fixed asset investment

Japan real GDP and industrial production

EU Commission’s economic forecasts.

(8:30 a.m. ET) Canadian manufacturing sales and new orders for September. Estimates are month-over-month declines of 0.8 per cent and 1.5 per cent, respectively.

(8:30 a.m. ET) Canadian wholesale trade for September. Estimate is a rise of 0.9 per cent from August.

(8:30 a.m. ET) Canadian new motor vehicle sales for September. Estimate is a year-over-year drop of 3.5 per cent.

(8:30 a.m. ET) U.S. retail sales for October. The Street expects a rise of 0.3 per cent from September.

(8:30 a.m. ET) U.S. import prices for October. Consensus is a decline of 0.1 per cent from September and up 0.4 per cent year-over-year.

(9 a.m. ET) Canadian existing home sales and average prices for October. Estimates are year-over-year increases of 33.0 per cent and 5.5 per cent, respectively.

(9 a.m. ET) Canada’s MLS Home Price Index for October. Estimate is a decline of 2.5 per cent from the same period a year ago.

(9 a.m. ET) U.S. industrial production and capacity utilization for October.

(10 a.m. ET) U.S. business inventories for September. Consensus is a month-over-month gain of 0.1 per cent.

(10:30 a.m. ET) Bank of Canada Senior Loan Officer Survey for Q3.

Earnings include: Fission Uranium Corp.

Third Quarter Financial Highlights ^1,2,3 :

• Total gross transaction value (“GTV”) decreased 7% year-over-year to $3.6 billion.
• Total revenue decreased 4% year-over-year to $981.8 million.
• Service revenue increased 1% year-over-year to $779.9 million.
• Inventory sales revenue decreased 18% year-over-year to $201.9 million.
• Net income increased 20% year-over-year to $76.0 million.
• Net income available to common stockholders increased 22% year-over-year to $66.9 million.
• Diluted earnings per share available to common stockholders increased 20% to $0.36 per share.
• Diluted adjusted earnings per share available to common stockholders decreased 1% year-over-year to $0.71 per share.
• Adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) decreased 1% year-over-year to $283.7 million.

2024 Financial Outlook

The Company has updated its full-year 2024 outlook for select financial data, as shown below:

(in U.S. dollars in millions, except percentages)		Current Outlook		Prior Outlook
GTV growth 4		0% to 2%		0% to 2%
Adjusted EBITDA		$1,235 to $1,270		$1,220 to $1,270
Full year 2024 tax rate (GAAP and Adjusted)		25% to 27%		25% to 27%
Capital expenditures 5		$275 to $325		$275 to $325

The Company has not provided a reconciliation of Adjusted EBITDA outlook for fiscal 2024 to GAAP net income, the most directly comparable GAAP financial measure, because without unreasonable efforts, it is unable to predict with reasonable certainty the amount or timing of non-GAAP adjustments that are used to calculate Adjusted EBITDA, including but not limited to: (a) the net loss or gain on the sale of property plant & equipment or other assets, (b) acquisition-related or integration costs relating to our mergers and acquisition activity, including severance costs, (c) other legal, advisory, restructuring and non-income tax expenses, (d) share-based payments compensation expense which value is directly impacted by the fluctuations in our share price and other variables, and (e) other expenses that we do not believe are indicative of our ongoing operations. These adjustments are uncertain, depend on various factors that are beyond our control and could have a material impact on net income for fiscal 2024.

Telus Corp. says its net income attributable to common shares more than doubled during its third quarter despite the company adding fewer net new customers compared with the same time last year.

The telecommunications company says it earned $280 million in its third quarter, up 105.9 per cent from the same three-month period in 2023.

Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.

It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year.

Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.

Telus says it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers.

This report by The Canadian Press was first published Nov. 8, 2024.