NOV 14 Email – Track Over Sold Stocks
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‘Deeply marred’: COP27 reaches deal for rich countries to pay for developing world’s climate disasters, but little else
‘Deeply marred’: COP27 reaches deal for rich countries to pay for developing world’s climate disasters, but little else
The United Nations climate conference in Egypt limped over the finish line Sunday morning with a commitment to launch a fund to compensate poor countries suffering from catastrophic climate-change events. The last-minute breakthrough spared the COP27 event from total collapse.
Agreeing to put together a “loss and damage” fund stood out because few other commitments related to the fight against climate change made it into the final statement, which was published a day and a half after COP27, held in the seaside resort of Sharm el-Sheikh, was supposed to close.
The countries made no fresh pledges to ramp up their carbon-reduction plans, nor did the statement call for the phasing down and eventual elimination of all fossil fuels. The upshot is that COP27 failed to build on the pledges made a year ago at COP26 in Glasgow to eliminate coal, triggering criticisms from environmental groups that oil and gas had, in effect, been given a new lease on life.
“COP27′s key steps toward a loss and damage fund are deeply marred by the lack of progress on fossil fuels,” said Collin Rees, the U.S. campaign manager of Oil Change International, an environmental group pushing for the end of fossil fuels. “Despite unprecedented discussion of equitably phasing out oil, gas and coal, the end result was yet another COP without formal recognition that Big Oil is driving the climate crisis.”
Ruth Townend,research fellow on the environment at the British think tank Chatham House, said COP27 squandered the opportunity to commit to intensified decarbonization efforts.
“World governments have, at most, three years to bend the curve on emissions, and nothing short of transformational change to energy, transport and food systems, the global financial architecture and the way individuals live their lives, can achieve this,” she said.
Developing countries and environmental groups fear that the goal of limiting average global temperature increases to 1.5C over preindustrial levels – made at the Paris Agreement in 2015 – will be harder, even impossible, to achieve since new oil and gas projects were not condemned in COP27′s final statement.
They noted that more than 600 oil and gas representatives and lobbyists attended COP27, where they pushed to keep their fossil-fuel development agenda alive as the West’s efforts to wean itself off Russian oil and gas sends energy prices soaring.
“The loss and damage deal is a positive step but risking becoming a fund for the end of the world if countries don’t move faster to slash emissions and limit warming to below 1.5C,” said Manuel Pulgar-Vidal of the WWF, a former environment minister of Peru who was the president of COP20 in Lima.
Still, the breakthrough on the loss and damage fund constitutes a big win for poor countries on the front lines of radical climate change.
The logjam was broken on Saturday, when the United States said it would not block such a fund. For decades, the U.S. has resisted the idea for fear of being on the hook for endless liability claims from hard-hit countries. The American move took place two days after the European Union, fearing a COP27 collapse, said it would support the fund. But it was the relentless Pakistan negotiating team that kept the developing countries united.
Loss and damage refers to payments required for reconstruction after climate-related disasters, such as the floods that inundated a third of Pakistan last summer. It is separate from climate-change mitigation and adaptation financing, which was launched at the Paris conference in 2015 and is supposed to pay out US$100-billion a year to vulnerable countries, but has always come up short.
Details of the loss and damage fund had yet to be worked out. A UN committee is to work on its technical design and funding mechanisms, all of which would have to be approved at the COP28 conference in Dubai this time next year.
Pushing for the creation of the fund became the developing countries’ crusade during the two weeks of fraught talks at COP27, whose outright failure appeared to go from possible to likely in the chaotic, frustrating final days. Near the end of the summit, UN Secretary-General Antonio Guterres made an emergency visit to plea for progress.
The key sticking point was determining which wealthy, or near-wealthy countries would pay for damages in which countries. The United States and the EU want China, the world’s biggest polluter, but not its biggest historical polluter, to contribute to the fund, all the more so since it has moved up the wealth curve quickly to become a manufacturing and technological superpower.
But China still considers itself a developing country, as do the World Trade Organization and the UN, which has not updated its definition of developing countries since the UN Framework Convention on Climate Change was signed in 1992.
At COP27, the head of the Chinese delegation, Xie Zhenhua, insisted that China had no obligation to provide financial assistance to poor countries. He said a “loss and damage fund, if there is any fund, the responsibility to provide funds lies with developed countries. It is their responsibility and obligation.”
He did not rule out making payments to hard-hit countries. “Developing countries can contribute on a voluntary basis,” he said.
Canada has supported the fund. African environmental groups and delegates praised the fund’s backing from developed countries but warned that going from concept to reality still faced potentially years of work and many hurdles.
“COP27 has done what no other COP has achieved and created a loss and damage fund to support the most impacted communities on climate change,” said Mohamed Adow, director of Power Shift Africa. “It is worth noting that we have the fund but we need the money to make it worthwhile. What we have is an empty bucket.”
There is no money in the fund and some developing countries fear that the wealthy countries who agreed to push the idea forward will bring it alive by diverting money from existing financial mechanisms, such as the US$100-billion adaptation and mitigation fund.
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Five countries, other than China, most dependent on the South China Sea
- An estimated $3.37 trillion worth, or 21% of all global trade, transited through the South China Sea in 2016, according to the United Nations Conference on Trade and Development.
- Territorially, there are seven claimants to the South China Sea: China, Brunei, Indonesia, Malaysia, the Philippines, Taiwan and Vietnam. But to whom does the South China Sea matter most?
- Analysts name the top five countries, other than China, that are most dependent on the South China Sea: Vietnam, Singapore, Indonesia, Japan and South Korea.
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Attorney General Merrick Garland names Jack Smith special counsel in Trump criminal probes
Attorney General Merrick Garland names Jack Smith special counsel in Trump criminal probes
- U.S. Attorney General Merrick Garland named former federal prosecutor Jack Smith special counsel for two criminal investigations by the Department of Justice of former President Donald Trump.
- Smith’s appointment came three days after Trump, a Republican, announced plans to run for president in 2024.
- One investigation that Smith will handle is currently looking into whether any person, including Trump, unlawfully interferred with the transfer of presidential power following the 2020 election, or the certification of the Electoral College vote in President Joe Biden’s favor on Jan. 6, 2021.
- The other DOJ probe is focused on whether Trump broke the law and obstructed justice in connection with his removal of hundreds of documents from the White House, which were shipped to his residence at Mar-a-Lago club in Palm Beach, Florida.
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Economic Calendar: Nov 21 – Nov 25
Economic Calendar: Nov 21 – Nov 25
Monday November 21
Germany PPI
(8:30 a.m. ET) U.S. Chicago Fed National Activity Index for October.
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Tuesday November 22
Euro zone consumer confidence
(8:30 a.m. ET) Canadian retail sales for September. The Street is forecasting a decline of 0.5 per cent from August.
(8:30 a.m. ET) Canada’s new housing price index for October. Estimate is a drop of 0.2 per cent month-over-month
(8:30 a.m. ET) Canadian manufacturing sales for October.
(8:30 a.m. ET) Canadian wholesale trade for October.
(11:45 a.m. ET) Bank of Canada Deputy Governor Carolyn Rogers conducts a fireside chat on risks to the stability of the Canadian financial system
Earnings include: Alimentation Couche-Tard Inc.; Analog Devices Inc.; Best Buy Co. Inc.; Canadian Solar Inc.; Dollar Tree Inc.; George Weston Ltd.; HP Inc.; Medtronic PLC; VMware Inc.; Zoom Video Communications Inc.
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Wednesday November 23
Japanese markets closed
Euro zone PMI
(8:30 a.m. ET) U.S. initial jobless claims for week of Nov. 19. The estimate is 225,000, up 3,000 from the previous week.
(8:30 a.m. ET) U.S. durable goods orders for October. The Street expects a rise of 0.4 per cent from September with core orders increasing 0.3 per cent.
(9:45 a.m. ET) U.S. S&P Global Manufacturing PMI for November.
(10 a.m. ET) U.S. new home sales for October. The Street is forecasting an annualized rate decline of 5.5 per cent.
(10 a.m. ET) U.S. University of Michigan Consumer Sentiment Index for November.
(2 p.m. ET) U.S. Fed minutes for Nov. 1-2 meeting released.
(4:30 p.m. ET) Bank of Canada Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers appear before the House Standing Committee on Finance
Earnings include: Deere & Co.; Dell Technologies Inc.
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Thursday November 24
U.S. markets closed (Thanksgiving)
Japan PMI, department store sales and machine tool orders
Germany business climate
(8:30 a.m. ET) Canada’s Survey of Employment, Payrolls and Hours for September.
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Friday November 25
Germany CPI and consumer confidence
Also: Canada’s Fiscal Monitor for September.
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NFI Group reports US$42.6-million third-quarter loss, revenue up from year ago
NFI Group reports US$42.6-million third-quarter loss, revenue up from year ago
NFI Group Inc. NFI-T +0.69%increase reported a loss of US$42.6-million in its latest quarter compared with a loss of US$15.4-million in the same quarter last year as its revenue edged higher.
NFI chief executive Paul Soubry says the results reflect the ongoing impacts of unreliable supplier performance, associated production inefficiencies and heightened inflation on input costs.
The bus maker, which keeps its books in U.S. dollars, says the loss amounted to 56 cents per share for the company’s third quarter compared with a loss of 22 cents per share a year earlier.
Revenue for the quarter totalled US$514.0-million, up from US$492.0 in its third quarter of 2021.
On an adjusted basis, NFI says it lost 63 cents per share in its latest quarter compared with an adjusted loss of 16 cents per share in the same quarter last year.
The company says it is in talks with Export Development Canada, the Manitoba government and other banking syndicate members regarding credit facility covenant relief and potential financing solutions.
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Keystone oil pipeline issues resolved after storms cause volumes to be cut
Keystone oil pipeline issues resolved after storms cause volumes to be cut
The weather issues that prompted TC Energy to declare force majeure on Keystone oil pipeline deliveries this week have been resolved but the company will reduce injections for the rest of November, according to a market source.
Calgary-based TC said on Tuesday it was curtailing volumes on the 622,000 barrel-per-day (bpd) pipeline after the line was hit by three separate storms between Nov. 4 and Nov. 11. The company did not specific the size or duration of the cut in volumes, but market players estimated it at about 7 per cent.
The storms caused power failures at two pump stations on the U.S. part of the system and at the Patoka, Illinois, delivery station, causing the pipeline to temporarily shut down, the source said.
Keystone ships crude from Alberta’s oil sands to the U.S. Midwest and on to the Gulf Coast, and is a key part of Canada’s oil export network.
The events have been resolved and the pipeline is operational, but the cumulative impacts prompted TC to reduce November injections, he added.
TC did not respond to a request for comment.
Western Canadian crude is trading at a discount of about $29 under the U.S. benchmark WTI, due to weak refining demand and months of U.S. strategic reserve releases that have added to competition for heavy Canadian oil.
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Canada’s annual inflation rate steady at 6.9 per cent in October as gas costs climb
Canada’s annual inflation rate steady at 6.9 per cent in October as gas costs climb
Canada’s inflation rate held steady in October after slowing for three months, increasing the likelihood that the Bank of Canada will raise interest rates again in December.
The Consumer Price Index rose 6.9 per cent in October from a year earlier, matching the inflation rate in September, Statistics Canada said in a report on Wednesday. The result was in line with analyst expectations. On a monthly basis, consumer prices rose 0.7 per cent – just shy of the 0.8-per-cent increase that Bay Street analysts had predicted.
After hitting a near-four-decade high of 8.1 per cent in June, the annual inflation rate has eased somewhat, largely because gasoline prices have fallen from record highs seen in the aftermath of Russia’s invasion of Ukraine.
But that dynamic shifted again in October. Gas prices jumped 9.2 per cent from September, which Statscan attributed to a weaker Canadian dollar and announcements of oil production cuts overseas. The increase in gasoline costs offset slowing price growth for other items, such as groceries and travel-related expenses.
Several analysts were encouraged by the underlying details in Wednesday’s report. For instance, core inflation (excluding food and energy) rose 0.2 per cent in October on a monthly basis, the slowest increase seen this year. Some other short-term indicators also suggest price growth is fading quickly. But inflation remains lofty, meaning the Bank of Canada will likely have to hike rates in December in order to bring it under control.
“Canadian consumers are obviously still feeling the pinch from high inflation,” said Royce Mendes, head of macro strategy at Desjardins Securities. “However, the underlying trend is slowing and would be consistent with maybe the Bank of Canada hiking rates just once more.”
The Bank of Canada has raised its benchmark interest rate to 3.75 per cent from a pandemic low of 0.25 per cent in March, in its most aggressive rate-hike campaign in decades. Its next rate decision is on Dec. 7.
The central bank has said in several public statements that further rate increases will be needed to slow the economy and quell inflation. Financial analysts are divided over whether the bank will hike by 25 or 50 basis points next month. And they have also expressed differing views on where rates will peak in 2023. (There are 100 basis points in a percentage point.)
“The economy is in excess demand, the job market is too tight, and inflation is too high,” Bank of Canada Governor Tiff Macklem said last week in a speech. “Monetary policy has begun to have an impact, but it will take time for the effects of higher interest rates to spread through the economy and reduce demand and inflation.”
As borrowing costs have risen, Canada’s housing market has entered a slump. Those taking out loans or renewing their mortgages are facing higher costs that are crimping household budgets. The Statscan report showed that mortgage interest costs rose 11.4 per cent in October over the previous year, the largest increase since early 1991.
Rents, meanwhile, rose 4.7 per cent over the past year, marking the ninth consecutive month they have done so. The rental market is under pressure from strong population growth, home affordability challenges and decades without enough apartment construction.
Consumers saw a reprieve of sorts at the supermarket. Grocery prices climbed at an annual rate of 11 per cent, slowing from 11.4 per cent in September. Still, prices are growing near the highest rates in several decades. And the increases have been hefty for some staples: Over the past year, pasta prices have risen by 45 per cent, lettuce by 30 per cent and soup by 18 per cent.
Despite the recent moderation in general prices, paycheques continuing to lag behind inflation. In October, average hourly wages rose 5.6 per cent from a year earlier. This means the average worker is experiencing a decline in their purchasing power, leading many unions to bargain for better pay.
Mr. Macklem has recently warned that the labour market is overheating, and that unemployment will need to rise to help ease inflation. More than 100,000 jobs were created in October, erasing all the positions that were lost this summer. The unemployment rate held at 5.2 per cent, among the lowest seen in nearly five decades of comparable data. In this hiring environment, companies will often have to raise wages substantially to recruit workers.
“The tightness in the labour market is a symptom of the general imbalance between demand and supply that is fuelling inflation and hurting all Canadians,” Mr. Macklem said last week.
Labour groups have frequently criticized Mr. Macklem for what they perceive as him blaming workers for high inflation, rather than focusing on policy decisions or the corporate sector’s role in pricing.
Mr. Mendes projects the Bank of Canada will hike its policy rate once more in December, by 25 basis points, which would be the bank’s smallest move since March. This, he said, would come as a relief to households, many of which are highly indebted. He also cited risks for variable-rate mortgage holders, who are immediately affected by every increase in borrowing rates.
“For that reason, I think the Bank of Canada probably needs to be very cautious on taking rates materially higher,” he said. “And given that inflation is co-operating, they probably can step down to just a 25-basis-point rate increase.”
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Xi confronts Trudeau at G-20, says private conversation was ‘leaked’ to media: ‘Not appropriate’
Xi confronts Trudeau at G-20, says private conversation was ‘leaked’ to media: ‘Not appropriate’
Chinese Communist Party President Xi Jinping took a stern tone with Canadian Prime Minister Justin Trudeau at the G-20 world meeting in Indonesia on Wednesday, complaining of “inappropriate” leaks to the press.
The confrontation followed Canadian government sources‘ discussion of the world leaders’ conversation on the sidelines of the G-20 on Tuesday, where Trudeau reportedly voiced “serious concerns” about Chinese attempts to influence the country.
“Everything we discussed has been leaked to the papers. That’s not appropriate,” Xi told Trudeau in an informal conversation at the G-20, according to video shot by a Canadian pool reporter. “And that’s not the way the conversation was conducted.”