Pending home sales in the U.S. surged by much more than expected in the month of March, according to a report released by the National Association of Realtors on Thursday.
NAR said its pending home sales index spiked by 3.4 percent to 78.2 in March after jumping by 1.6 percent to 75.6 in February. Economists had expected pending home sales to rise by just 0.3 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
“March’s Pending Home Sales Index – at 78.2 – marks the best performance in a year, but it still remains in a fairly narrow range over the last 12 months without a measurable breakout,” said NAR Chief Economist Lawrence Yun. “Meaningful gains will only occur with declining mortgage rates and rising inventory.”
Pending home sales in the South and West led the sharp monthly increase, soaring by 7.0 percent and 6.8 percent, respectively.
The report said pending home sales in the Northeast also jumped by 2.7 percent, while pending home sales in the Midwest plunged by 4.3 percent.
NAR also revealed it expects existing sales to surge by 9.0 percent to 4.46 million in 2024 and skyrocket by another 13.2 percent to 5.05 million in 2025.
“Home sales have lingered at 30-year lows, and since 70 million more Americans live in the country now compared to three decades ago, it’s inevitable that sales will rise in coming years,” explained Yun.
A separate report released by the Commerce Department on Tuesday showed a substantial rebound in new home sales in the U.S. in the month of March.
The Commerce Department said new home sales spiked by 8.8 percent to an annual rate of 693,000 in March after plunging by 5.1 percent to a revised rate of 637,000 in February.
Economists had expected new home sales to rise to an annual rate of 668,000 from the 662,000 originally reported for the previous month.
A report released by the Commerce Department on Thursday showed the U.S. economy grew by much less than expected in the first quarter of 2024.
The Commerce Department said gross domestic product increased by 1.6 percent in the first quarter after surging by 3.4 percent in the fourth quarter of 2023. Economists had expected GDP to jump by 2.5 percent.
The GDP growth in the first quarter reflected increases in consumer spending, residential fixed investment, nonresidential fixed investment, and state and local government spending.
However, the positive contributions were partly offset by a decrease in private inventory investment and an increase in imports, which are a subtraction in the calculation of GDP.
The Commerce Department said the notable slowdown in GDP growth compared to the previous quarter primarily reflected decelerations in consumer spending, exports, and state and local government spending and a downturn in federal government spending.
The report showed consumer spending growth slowed to 2.5 percent in the first quarter from 3.3 percent in the fourth quarter, with an increase in spending services partly offset by a decrease in spending on goods.
“The economy will likely decelerate further in the following quarters as consumers are likely near the end of their spending splurge,” said Jeffrey Roach, Chief Economist for LPL Financial. “Savings rates are falling as sticky inflation puts greater pressure on the consumer.”
On the inflation front, the Commerce Department said the personal consumption expenditures price index surged 3.4 percent in the first quarter after advancing by 1.8 percent in the fourth quarter.
Excluding food and energy prices, the PCE price index spiked 3.7 percent in the first quarter after jumping by 2.0 percent in the fourth quarter.
“We should expect inflation will ease throughout this year as aggregate demand slows, although the path to the Fed’s 2% target still looks a long ways off,” said Roach.
Gold could rally to $3,000, according to David Rosenberg, the founder and president of Rosenberg Research, as noted by MarketWatch.com. In addition, according to Citi analysts, gold could reach that level in the next six to 18 months thanks to investor inflows and hopes the Federal Reserve will cut interest rates. That’s in addition to safe-haven demand and growing interest in gold from global central banks. All of which is positive news for gold companies, such as U.S. Gold Corp. (NASDAQ:USAU), Barrick Gold Corporation (NYSE:GOLD) (TSX:ABX.TO), Royal Gold Inc. (NASDAQ:RGLD), Franco Nevada Corp. (NYSE:FNV) (TSX:FNV.TO), and Newmont Corp. (NYSE:NEM) (TSX:NGT.TO).
As noted on Yahoo Finance, “In March, China’s central bank added another 160,000 troy ounces to its reserves, marking its seventeenth consecutive month. As the Chinese yuan experiences a decline in its status as the world’s second most significant reserve currency, and countries such as Japan, Russia, Turkey, and Poland express concerns about overdependence on the US dollar, a notable shift towards gold has emerged. Looking ahead, analysts remain optimistic about gold’s outlook, with some predicting prices could climb even higher.”
Based on the success of Kibali, which Barrick Gold has built into Africa’s largest gold mine, the company is ready to invest in new gold and copper opportunities in partnership with the government of the DRC, says president and chief executive Mark Bristow. Speaking to media at a site visit to the mine, Bristow said Kibali was on track for another value-creating year on the back of a strong production performance. It was also well set to replace the ounces that were being depleted by mining with more of the same high quality. “Kibali has transformed what was previously the disadvantaged north-east region of the country into a new economic frontier and a flourishing commercial hub. Of our $5 billion investment in the DRC, more than half has been spent with local contractors and suppliers, many of whose growth into substantial businesses we have promoted by enhancing their commercial and technical skills and providing them with the opportunities to exercise these. Kibali’s third hydropower station, for example, was built by an all-Congolese team,” he said.
Royal Gold announced that management will host an Investor Update to provide an update on Royal Gold’s business, including 2024 guidance, on Wednesday, April 17, 2024 from 10:00 a.m. to noon EDT (8:00 a.m. to 10:00 a.m. MDT). A press release detailing 2024 guidance will be issued, before market open, on the same day. Prepared remarks by members of Royal Gold’s management team will be followed by a live question and answer session.
Franco Nevada recently noted that, “In late 2023, we were challenged by the unprecedented production halt at Cobre Panama. We are hopeful that the issues can be resolved, although we have taken a prudent approach for the carrying value of the asset”, stated Paul Brink, CEO. “Despite the issue at Cobre Panama, our business remains robust and we continue to benefit from a long-duration, diversified portfolio. We finished the year with no debt and $1.4 billion in cash and cash equivalents. The balance of our business performed well in 2023 and is expected to grow in 2024 with contributions from the completion of the Tocantinzinho, Greenstone and Salares Norte gold mines. Our growth outlook through 2028 is driven by numerous new mines and mine expansions. $2.4 billion of available capital positions us well for attractive acquisitions in an environment where many project developers are capital constrained.”
Newmont Corp. reported higher gold Mineral Reserves of 135.9 million attributable ounces for 2023 compared to the Company’s 96.1 million ounces at the end of 2022. Newmont has significant upside to other metals, including more than 30 billion pounds of copper reserves and nearly 600 million ounces of silver reserves. “Newmont has strengthened its position as the responsible gold leader with the industry’s highest concentration of quality operations, reserves and resources,” said Tom Palmer, Newmont’s President and Chief Executive Officer. “In 2023, we added more than 47 million ounces of gold reserves and 14 billion pounds of copper reserves through the acquisition of Newcrest and the continuation of our industry-leading exploration program. With the largest gold and copper reserve base in the industry, Newmont is well-positioned to deliver stable production and meaningful value to stakeholders today and in the future.”
Teck Resources Ltd. reported its first-quarter profit fell compared with a year ago due in part to its reduced ownership in its steelmaking coal business as well as lower copper and zinc prices and higher costs.
The Vancouver-based mining company says it earned a profit attributable to shareholders of $343 million or 65 cents per diluted share for the quarter ended March 31. The result compared with a profit of $1.14 billion or $2.18 per diluted share in the same quarter last year.
Revenue totalled $3.99 billion, up from $3.79 billion in the first quarter of 2023.
On an adjusted basis, Teck says it earned 75 cents per diluted share from continuing operations, down from $1.78 per diluted share a year earlier.
Teck closed the sale of a minority stake in its steelmaking coal business, Elk Valley Resources, to Japan’s Nippon Steel Corp. and South Korean steelmaker Posco in January.
The deals are part of a broader plan that will see Glencore acquire the remaining 77 per cent stake in Elk Valley Resources. The Glencore transaction remains subject to regulatory review and is expected to close later this year.
This report by The Canadian Press was first published April 25, 2024.
Canada’s economic output on a per capita basis has slipped to 7 per cent below its long-term trend, amounting to a decline of roughly $4,200 a person, according to a report published Wednesday by Statistics Canada.
To return to trend over the next decade, real gross domestic product per capita would need to grow at an average annual rate of 1.7 per cent – similar to the robust expansion in the United States in recent years. The trend for per capita output is based on figures from 1981 through 2023, then extrapolated to 2033.
“Per capita growth of this magnitude is ambitious and a marked departure from recent trends,” wrote Carter McCormack and Weimin Wang, the authors of the report.
Canada’s moribund economic performance on a per person basis has become a flashpoint of discussion over the past couple of years. In a speech last month, Bank of Canada senior deputy governor Carolyn Rogers said the country is facing an “emergency” of weak labour productivity and tepid levels of business investment.
The recent numbers paint a grim picture. Real GDP per capita has fallen to levels seen in 2017. Workers in places with higher per capita output tend to earn higher wages and live longer, making this a popular – if imperfect – measure of a country’s living standards.
The Canadian economy was walloped by COVID-19 in 2020, and more recently, higher interest rates have weighed on growth. At a time of challenging economic conditions, the population is growing at the fastest rates in decades – almost entirely through immigration – which is boosting the denominator in the per capita calculation.
Still, many analysts have said that weaker results aren’t merely a function of the business cycle.
For decades, Canada has struggled with lacklustre capital investment. A Statscan report published in February noted that investment per worker in 2021 was 20 per cent lower than in 2006. During that period, there was a sharp decline in firm entry rates, resulting in weaker competition between companies – and thus, less incentive for them to invest.
Business investment is a critical ingredient for boosting labour productivity, or output per hour worked. In practice, this means workers have more tools at their disposal to help them work more efficiently.
Productivity is the bedrock of per capita growth. Over the four decades leading up to the pandemic, increases in productivity accounted for 93 per cent of the improvement in real GDP per capita, Wednesday’s report said. (Economies can also boost per capita output via higher employment rates and the average employee working longer hours, although these have played a small role in Canada’s long-term gains.)
The trouble for Canada is that labour productivity has faltered of late: While it nudged higher over the final three months of 2023, that followed six consecutive quarters of decline.
“Higher productivity should be everyone’s goal because it’s how we build a better economy for everyone,” Ms. Rogers said in her speech in March. “When a business gives workers better tools and better training, those workers can produce more. That, in turn, means more revenue for the business, which allows it to absorb rising costs, including higher wages, without having to raise prices.”
In its recent budget, the federal government pushed back on some of the pessimism regarding the decline in per capita output. Because newcomers typically earn less than the average Canadian, the government said that the recent influx of people is weighing on average income and productivity. “This should not be misinterpreted to imply that those already in the country are becoming worse off,” the budget read.
Still, the government is now trying to curtail migration to the country, related to concerns over how effectively Canada is absorbing newcomers in key areas, such as housing.
In its latest projections, the Bank of Canada said it expects GDP per capita to decline in the first half of 2024, before picking up in the second half of the year and into early 2025. The central bank said the improvement would be driven by easing financial conditions – the bank is widely expected to lower its policy interest rate around the middle of the year – and rising confidence among consumers and businesses.
Since 1981, real GDP per capita has risen by an average annual rate of 1.1 per cent, the Statscan report said. To return to the long-term trend by 2033, Canada will need to experience a decade of above-average growth.
Strong expansions are not unheard of. From 1991 to 2001, Canada’s real GDP per capita rose at an average annual rate of 2.2 per cent, the Statscan paper said. The implementation of the Canada-U.S. Free Trade Agreement and the adoption of digital technologies helped to spur gains in productivity in the 1990s.
The Statscan authors said it’s an open question of whether emerging technologies will usher in a new era of stronger productivity.
“The ability of Canadian companies to harness the benefits of new competitive technologies related to artificial intelligence, robotics and digitalization will be critical to the link between investment and productivity in the coming years and potentially important contributors to changes in living standards,” they wrote.
Canadian Pacific Kansas City reported its first-quarter profit fell compared with a year ago.
The railway says it earned net income attributable to controlling shareholders of $775 million or 83 cents per diluted share for the quarter ended March 31.
That is down from a profit of $800 million or 86 cents per diluted share a year earlier.
Canadian Pacific completed its acquisition of Kansas City Southern in December 2021, but had to wait to combine operations until April last year following regulatory approval of the deal.
CPKC says revenue for its most recent quarter totalled $3.52 billion, up from $2.27 billion in the same quarter last year before the railways combined operations.
The railway says its core adjusted combined diluted earnings per share amounted to 93 cents in its latest quarter, up from 90 cents a year earlier.
This report by The Canadian Press was first published April 24, 202
First Quantum Minerals Ltd. FM-T +0.58%increase says it lost US$159 million in its first quarter, down from profits of US$75 million a year earlier.
However, it’s a shallower loss than the US$1.45 billion First Quantum reported in the previous quarter.
CEO Tristan Pascall says the successful completion of a comprehensive refinancing package during the quarter has strengthened First Quantum’s balance sheet significantly.
Last quarter, the company said its ability to continue operating would be in doubt if it could not shore up its balance sheet in light of the shutdown of its Cobre Panama mine.
Revenues for the latest quarter were US$1.04 billion, down from US$1.56 billion a year earlier.
Loss per diluted share was 21 cents US, compared with earnings of 11 cents for the same quarter last year.
Metro Inc. MRU-T +1.69%increase reported a 14.5-per-cent decline in profits in its second quarter, as the company continues to face higher-than-usual expenses related to investments in its supply chain.
The Montreal-based grocer also announced on Wednesday that it is terminating its partnership with Air Miles this coming fall, as it plans to expand its own MOI loyalty program to cover all 275 of its Metro and Food Basics stores in Ontario.
MOI launched in Quebec last May, and currently has 2.5 million active members in that province. Air Miles can still be collected and redeemed at stores until the launch, according to the company.
The company recorded a $20.8-million impairment charge related to the decision, saying the impairment of assets represents the carrying value of the loyalty program.
The company reported net earnings fell to $187.1-million or 83 cents per share in the second quarter ended March 16, compared to $218.8-million or 93 cents per share in the same period the prior year. Adjusting for the loss on impairment of the loyalty program as well as other items, adjusted net earnings declined by 8.4 per cent, to $206.4-million or 91 cents per share compared to $225.4-million or 96 cents per share in the same period the prior year.
Metro had previously forecast that this fiscal year would see net earnings slip as the company makes investments in improving its supply chain operations. That includes a transition to a new automated distribution centre for fresh and frozen products in Terrebonne, Que., which is now completed, and to another automated facility for fresh food in Toronto, which will enter its final phase this summer. Last November, executives forecast that on a full-year basis, adjusted net earnings per share would fall within a range of flat-to-down by 10 cents per share.
Canada’s major grocers have faced intense scrutiny over food inflation, which peaked at more than 11 per cent in late 2022 and early 2023, but has been slowing in recent months. The latest data from Statistics Canada showed that prices for food purchased from stores increased by 1.9 per cent in March on a year-over-year basis, down from 2.4 per cent in February.
Metro’s own internal measure of food basket inflation was roughly 3 per cent in the second quarter, down from 4 per cent in the first quarter. (The number is not directly comparable with the rate of food inflation measured by Statistics Canada’s consumer price index, because it is based on prices for a basket of goods that are frequently purchased at its stores.)
Metro’s total sales in the quarter increased by 2.2 per cent compared to the prior year, to nearly $4.7-billion.
Same-store sales – an important metric that tracks sales growth not attributable to new store openings – were roughly flat, growing just 0.2 per cent at Metro’s grocery stores. Sales were affected by a timing shift in the quarter, which began closer to Christmas than the same period in 2022 – meaning that the prior period included more of the busy pre-Christmas period. Adjusting for that shift, food same-store sales were up 2.7 per cent, according to Metro. Same-store sales at pharmacies, including the company’s Jean Coutu drugstore chain, increased by 5.9 per cent.
Canadian National Railway Co. CNR-T -3.16%decrease says earnings slid last quarter amid higher labour costs and lower revenue from container shipments.
The country’s largest railroad operator is reporting that net income fell nearly 10 per cent to $1.10-billion in the three months ended March 31 compared with $1.22-billion in the same period a year earlier.
The Montreal-based company says first-quarter revenue dipped by about one per cent to $4.25-billion from $4.31-billion the previous year.
CN says diluted earnings fell more than 5 per cent to $1.72 a share from $1.82 a share, roughly on par with analysts’ expectations of $1.73 a share, according to LSEG Data & Analytics.
Chief executive Tracy Robinson says the company’s growth opportunities are taking shape as the economy starts to ramp back up.
CN also says its board approved a second-quarter dividend of 84.5 cents a share that will be paid on June 28.
