Today’s top headlines
Market close: TSX closes down along with U.S. stock markets
Canada’s main stock index closed at its lowest point since October last year as part of a pullback that saw sharper drops in U.S. markets.
The S&P/TSX composite index ended down 156.26 points at 19,020.92.
In New York, the Dow Jones industrial average closed down 430.97 points at 33,002.38. The S&P 500 index was down 58.94 points at 4,229.45, while the Nasdaq composite was down 248.31 points at 13,059.47.
The Canadian dollar traded for 72.93 cents U.S. compared with 73.96 cents U.S. on Friday.
The November crude contract was up 41 cents at US$89.23 per barrel and the November natural gas contract was up 11 cents at US$2.95 per mmBTU.
The December gold contract ended down US$5.70 at US$1,841.50 an ounce and the December copper contract was down two cents at US$3.62 a pound.
The Canadian Press
Network-wide system failure halts GO trains and UP Express
GO Train and UP Express, which services the Toronto Pearson International Airport, have been temporarily suspended as a CN network-wide system failure shuts rail corridors.
A notice on the GO Transit website said trains would be held at the nearest station as teams work with CN to resolve the issue. It encouraged travellers to consider alternative travel options.
VIA Rail also said trains arriving and departing from Union Station may encounter delays as a result of the outage, CP24 reported.
Calgary home sales jump 29% in September, hitting record high
The Calgary Real Estate Board says there were 2,441 home sales in September, setting a record high last month.
The figure marked a 29 per cent increase compared with the same month last year, as the unadjusted residential benchmark price rose to $570,300, nearly nine per cent higher than September 2022.
But despite reporting year-over-year gains over the past four months, the board says year-to-date sales are still nearly 12 per cent lower than last year’s levels.
It says inventory levels in September remained more than 24 per cent lower than levels last year and have not changed enough relative to sales activity to prompt a significant shift in supply and demand balances.
CREB chief economist Ann-Marie Lurie says strong interprovincial migration has boosted housing demand in the region despite higher lending rates and that “while new listings are improving, it has not been enough to take us out of sellers’ market conditions.”
New apartment condominium listings in September were at the highest levels reported for the month, as year-to-date sales in the category reached 6,286 sales, a 25 per cent gain over last year.
The Canadian Press
Brookfield raises US$12 billion for new global private equity fund
Brookfield Asset Management Ltd. says it has raised US$12 billion for its latest global private equity fund.
The company says Brookfield Capital Partners VI is the largest private equity fund it has raised.
The fund includes institutional investors, including public and private pension plans, sovereign wealth funds, financial institutions, endowments and foundations, and family offices.
Brookfield has committed US$3.5 billion to the fund.
It says, to date, the fund has committed about US$4 billion to acquire six businesses.
Brookfield Asset Management has US$850 billion of assets under management.
The Canadian Press
CMHC says $1-trillion investment needed to fix housing crunch
At least $1 trillion in investment is needed to achieve housing affordability in Canada, and the private sector has a key role to play, according to a new study by Canada Mortgage and Housing Corp.
The $1-trillion investment is estimated to be the cost of building the millions of homes needed to fix affordability, the national housing agency said on Oct. 3. It reported last month that Canada still needs 3.5 million more homes to close the affordability gap by 2030.
“That amount of money is so enormous that we really need the private sector involved,” deputy chief economist Aled ab Iorwerth said. “The government can’t do it alone.”
Denise Paglinawan, Financial Post
Fed could hike interest rates again in November: Mester
United States Federal Reserve Bank of Cleveland president Loretta Mester said she would support another interest-rate increase at the Fed’s next policy meeting if the economy is performing about the same as at the time of the September gathering.
“If the economy looks the way it did at the next meeting similar to the way it looked at our recent meeting, I would” support another rate increase, Mester told reporters on a conference call Tuesday.
Fed officials voted last month to leave the target range for their benchmark unchanged at 5.25 per cent to 5.5 per cent, a 22-year high. Projections published at the same time showed 12 out of 19 policymakers expected one more rate increase for this year, and fewer rate cuts in 2024 than previously anticipated.
Mester, who does not vote on monetary policy decisions this year, said on Monday that the U.S. central bank will likely need to raise rates once more this year and then hold them at higher levels for some time to get inflation back to its two per cent target.
However, Mester said the final decision will depend on how the economy evolves, pointing to a slowdown in China, the possibility of an extended strike by members of the United Auto Workers union and a possible government shutdown as risks to the outlook for inflation and growth.
Midday markets: Stocks slide, TSX at lowest point since October last year
Canada’s main stock index fell to its lowest point since October last year in midday trading, while U.S. stock markets also pulled back.
The S&P/TSX composite index was down 194.78 points at 18,982.40.
In New York, the Dow Jones industrial average was down 412.57 points at 33,020.78. The S&P 500 index was down 61.44 points at 4,226.95, while the Nasdaq composite was down 232.16 points at 13,075.61.
The Canadian Press
Data shows U.S. jobs market hotter than expected, roiling markets
United States job openings unexpectedly rose in August, another sign the U.S. labour market remains strong despite higher interest rates — perhaps too strong for the inflation fighters at the United States Federal Reserve.
American employers posted 9.6 million job openings in August, up from 8.9 million in July and the first uptick in three months, the Labor Department said Tuesday. Economists had expected only another 8.9 million vacancies. The number of layoffs and of people quitting their jobs — a sign of confidence in their prospects — were both essentially unchanged from July.
Nick Bunker, head of economic research at the Indeed Hiring Lab, noted that most of the August increase in openings came from just one industry: professional and business services. “”Yes, the job market is still retaining a lot of heat,” he said, “but it hasn’t gone back on the boil.”
The Federal Reserve wants to see the red-hot U.S. job market cool off, reducing pressure on businesses to raise pay, which can feed into higher prices. The central bank has raised its benchmark rate 11 times since March 2022 to combat inflation.
Fed chair Jerome Powell has expressed hope that hiring would moderate in the least painful way possible — with fewer vacancies and less job-hopping rather than through layoffs.
The strong jobs data sent a ripple through U.S. markets with many investors seeing increased odds of more aggressive actions by the Fed. The Dow Jones dipped by 100 points in seconds.
The Associated Press
Shopify CEO says employees should stop working side hustles
The chief executive of Shopify Inc. is discouraging staff from taking on side gigs that divert their attention away from the company.
Tobi Lütke said in a memo circulated to staff that the Ottawa-based e-commerce company’s mission to build world-class software for millions of merchants requires their unshared attention.
He said he felt like he was on the Truman Show when he recently learned the company was handing out offer letters to prospective hires encouraging side gigs.
He said staff should still feel free to run a Shopify store to learn about the company’s products, but if it grows, he wants them to hire help or become a full-time entrepreneur.
Lütke said occasional side hustles like teaching a weekend yoga class or coaching kids soccer once or twice a week aren’t the kind of activities he’s concerned about.
Lütke’s memo comes after the company laid off thousands of workers over the last two years, saying it had misjudged how lasting the growth of e-commerce would be following the height of the COVID-19 pandemic.
In recent years, Shopify president Harley Finkelstein co-founded Firebelly Tea and co-hosts Jewish entrepreneurs podcast Big Shot with DavidsTea Inc. founder David Segal.
The Canadian Press
Stock markets are open: TSX, Wall Street head lower
North American stocks fell at the opening bell, continuing on Monday’s losses.
Wall Street is sinking again under the weight of higher yields in the bond market. The S&P 500 fell 0.5 per cent early Tuesday and is back to where it was in June. The Dow fell 157 and the Nasdaq composite was down 0.6 per cent.
After charging higher much of the year, U.S. stocks have lost roughly 40 per cent since the end of July. The main culprit is an unrelenting rise in Treasury yields, which have reached levels unseen in more than a decade. The 10-year Treasury yield climbed again to 4.72 per cent from 4.66 per cent late Monday and from just 0.50 per cent early in the pandemic.
In Canada, the S&P/TSX composite index also headed lower in early morning trading, losing 127.64 points to 19,049.54. The TSX slumped 1.9 per cent on Monday to its weakest close since October, leaving it down about 1.1 per cent this year.
The Associated Press, Bloomberg
Bank of Canada: Frequent price hikes by businesses contributing to sticky inflation
Bank of Canada deputy governor Nicolas Vincent says businesses are still raising their prices more frequently and by larger amounts than they did before the pandemic, which is contributing to higher-than-expected inflation.
Vincent made the comments in his first speech as deputy governor this morning to the Chamber of Commerce of Metropolitan Montreal.
According to his prepared remarks, Vincent says the Bank of Canada believes that higher-than-expected inflation over the last year is “intimately linked” to larger and more frequent price increases from businesses.
Although he notes pricing behaviour by firms has been shifting closer to normal since the beginning of the year, that progress has been slow.
Recent research from the central bank shows price increases have mirrored the cost increases businesses have faced, but Vincent notes that even stable profit margins would mean customers are carrying the entire burden of higher prices.
Vincent says these recent discoveries about the affect pricing behaviour may be having on inflation is leading the Bank of Canada to question the relationship between inflation and its drivers.
He also said the bank isn’t finished in its fight to tame inflation.
“It is clear that we are not out of the woods yet,” he said in the speech. “We need to acknowledge that an unusual amount of uncertainty continues to cloud our view.”
Watch Vincent’s speech below:
The Canadian Press, Financial Post
Neighbourly Pharmacy moves to go private after deal with top shareholder
Neighbourly Pharmacy Inc. has signed an agreement to be taken private by its largest shareholder in a deal that values the company at about $916 million.
Under the letter of intent, Persistence Capital Partners (PCP) has offered to pay $20.50 per share in cash for the stake in the company it does not already own.
Shares in Neighbourly, which owns a network of community pharmacies across Canada, closed down 44 cents at $12.12 on the Toronto Stock Exchange on Monday.
The company says the offer, which will require shareholder approval, also represents a premium of about 21 per cent to the company’s May 2021 initial public offering price of $17 per share.
PCP already owns about 22.4 million Neighbourly shares or a 50.2 per cent stake in the company.
PCP managing partner Stuart Elman says Neighbourly, as a private company, will have more flexibility and resources to pursue its strategic vision to advance the role that independent pharmacies can play in Canada.
The Canadian Press
India tells Canada to remove 40 diplomatic staff as tensions grow
India has instructed Canada to reduce the number diplomats in the South Asian country by two thirds as relations between the two nations continue to slide over the murder of a Sikh separatist leader, the Financial Times reported, citing people it didn’t identify.
New Delhi has told Canada it must repatriate about 40 diplomats by Oct. 10 and has threatened to revoke the immunity of diplomats who remain after that date, the newspaper said. Canada has 62 diplomats in India and has been told to reduce that by 41, it said.
The Canadian foreign ministry and the Indian government declined to comment to the newspaper.
Prime Minister Justin Trudeau has accused India’s government of involvement in the June killing of a Sikh separatist leader in Canada. India’s Foreign Minister Subrahmanyam Jaishankar, who was in Washington last week, said he had discussed the issue with United States Secretary of State Antony Blinken and U.S. National Security Adviser Jake Sullivan, and added that political assassination was “not consistent with our policy.”
India said last month it informed the Canadian government that there should be parity in the nation’s diplomatic presence in New Delhi and expects Canada to reduce its diplomats in the country.
Lundin Mining CEO resigns, to be replaced by Jack Lundin
Lundin Mining Corp. said chief executive Peter Rockandel has resigned and will be replaced by president and former director Jack Lundin.
The announcement marks the latest in a wave of leadership departures since the Canadian mining company moved its headquarters from Toronto to Vancouver in September, prompting several executives and managers to step down.
In a Monday press release, the company said Rockandel will leave his post at the end of the year and Lundin will assume the role Jan. 1. Rockandel will then continue to act as an adviser, Lundin said in the statement.
Jack Lundin has worked at several Lundin Group companies, including as CEO of Bluestone Resource Inc. and project superintendent at Lundin Gold Inc.
His late father, Lukas H. Lundin, co-founded Lundin Mining.
Rockandel moved to Vancouver as part of the headquarters shift in September but said in a Monday interview he plans to return to Toronto, where his family resides.
“We wanted to ensure we got continuity over the next five years to carry out the next phase with the company,” said Rockandel. “I was willing to commit to two or three years, but to commit to five would be a bit of a stretch. Family’s important to me.”
Rockandel joined Lundin Mining in 2018 and served as senior vice president of corporate development and investor relations before being appointed CEO in 2021. During Rockandel’s tenure, the company acquired a majority interest in the Caserones copper mine in Chile and advanced several projects across South America.
Lundin produces copper and gold from mines in South America, including Chile, Brazil and Argentina, and gets about 65 per cent of annual revenue from copper. The Lundin family trusts currently own about 15.4 per cent of Lundin Mining.
Bloomberg, The Canadian Press
Stock markets: Before the opening bell
U.S. stock market futures are trending lower this morning, along with the price of oil.
Traders are continuing to feel gloomy, after hawkish signalling from the United States Federal Reserve bolstered speculation the central bank will keep raising interest rates to counter inflation.
On Monday, the S&P/TSX composite index ended down 364.09 points at 19,177.18. The S&P 500 ended little changed and the Dow Jones industrial average slipped 0.2 per cent. The Nasdaq composite rose 0.7 per cent to 13,307.77.
Bloomberg, The Associated Press
What to watch today
Nicolas Vincent, external non-executive deputy governor of the Bank of Canada, will speak before the Chamber of Commerce of Metropolitan Montreal this morning. He will address Canada’s economic situation.
We’ll get fresh data on the state of the housing market in Calgary when the Calgary Real Estate Board releases September home sales.
The U.S. job openings and labour turnover survey for August will be released this morning.
Tilray Brands Inc. will report its earnings before markets open.
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Additional reporting by The Canadian Press, Associated Press and Bloomberg