Glossary of Terms: ‘CET’ core equity tier, ‘EBITDA’ earnings before interest, taxes, depreciation and amortization, ‘EPS’ earnings per share, ‘FCF’ free cash flow, ‘GDP’ gross domestic product, ‘ROE’ return on equity, ‘ROTE’ return on common equity, ‘ROTCE’ return on tangible common equity, ‘conjugate” a substance formed by the reversible combination of two or more others.
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U.S. housing starts: exceeded expectations, jumping 6.3% to 1.643 million in June. That marks the second straight monthly climb and not all too far from March’s 15-year high of 1.725 million. Overall, residential construction is holding up, despite supply chain constraints and a lack of skilled workers. Single-family home construction, the largest segment of the housing market, which rose 6.3%, while the volatile multi-unit category climbed 6.2%. On a regional basis, homebuilding rose in the densely populated South and West but fell in the Northeast and Midwest. Meanwhile, building permits dropped for the third month in a row, down 5.1% to 1.598 million annualized. And, for the first time since February 2020, permits are now below starts amid materials shortages, difficulty securing lots and labour constraints. Although key headwinds remain, the homebuilding sector remains sturdy in our view, even as momentum moderates. Housing demand is still elevated and construction activity is supported by a shortage of previously owned homes available in the resale market.More
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U.S. housing starts: exceeded expectations, jumping 6.3% to 1.643 million in June. That marks the second straight monthly climb and not all too far from March’s 15-year high of 1.725 million.
U.S. consumer prices surged 0.9% in June, nearly doubling expectations and the biggest one-month move since 2008. That’s a 7.3% annualized jump from six months ago, the largest since 1981, or 5.4% above a year ago, which works out to 5.4%,the highest since 2008.
SoftBank Group Corp. plans to invest an additional US$5 billion in Latin American companies, according to people familiar with the matter.
Facebook Inc. and Africa’s largest fibre company, Liquid Intelligent Technologies, are extending their reach on the continent by laying 2,000 kilometers (1,243 miles) of fibre in the Democratic Republic of Congo.
Facebook’s Instagram is adding new shopping tools, like letting people search for products using an image, as it expands E-commerce offerings across its family of apps. When users click on the images they view on Instagram, Facebook will direct them to similar-looking products for sale.
U.S. housing starts climbed 3.6% to 1.572 million in May, below expectations and following April’s sharp drop, which was revised even lower.
The Bank of Canada opted to keep the target for the overnight rate at the effective lower bound of 0.25% — a decision fully expected by the market.
Flipkart, the Indian e-commerce company controlled by Walmart Inc., is in talks to raise at least US$3 billion from investors including SoftBank Group Corp. and several sovereign wealth funds, according to the people familiar with the matter.
Paytm, India’s leading digital payments provider, is aiming to raise about 218 billion rupees (US $3 billion) in an initial public offering late this year in what could be the country’s largest debut ever, according to a person familiar with the deal.
Adani Green Energy Ltd. said it has agreed to buy SoftBank Group Corp.’s renewable power business in India, as it seeks to accelerate efforts to expand capacity.
Brookfield Asset Management Inc. reported results for the first quarter of 2021, which included funds from operations (FFO) of CA$2.8 billion, the company’s highest ever for a quarter.
Car battery maker Clarios, backed by Canada’s Brookfield Asset Management Inc., said it had confidentially filed paperwork with the U.S. Securities and Exchange Commission for an initial public offering.
Warren Buffett said that Berkshire Hathaway Inc. is being lifted by a U.S. economy performing far better than he predicted during the early stages of the coronavirus pandemic, although investor euphoria is making it hard to deploy cash.
Danaher Corporation announced results for the first quarter 2021. For the quarter ended April 2, 2021, net earnings were US$1.7 billion, or $2.29 per diluted common share which represents a 182.5% year-over-year increase from the comparable 2020 period.
Facebook Inc. - Sources say the social network is planning to announce a series of products under the umbrella of “social audio” on Monday April 19 2021. They include Facebook’s take on Clubhouse, the audio-only social network that grew rapidly last year, as well a push into podcast discovery and distribution, aided by Spotify.
Brookfield Asset Management Inc. announced it will buy the remaining stake in its commercial real estate business for about US$6.5 billion.
Oracle Corporation – sold US$15 billion of bonds Monday in the second-largest offering this year, drawing downgrades from Fitch Ratings Inc. and Moody’s Investors Service Corporation.
Ares Management Corporation announced the final closing of its Ares Pathfinder Fund, L.P. With US$3.7 billion in total commitments closed, the fund was significantly oversubscribed at its hard cap and exceeded its original target of $2.0 billion.
Facebook, Inc. plans to run more advertising on shorter videos, part of a broader push to attract popular social-media influencers and compete with TikTok. The Menlo Park, California-based company said ads will appear on clips as short as one minute.
Reliance Industries Limited led by Asia’s richest man, along with its partners plans to seek a license to enter India’s fast growing digital payments business, people with knowledge of the matter said.
On Thursday, Australia passed a world-first law aimed at forcing Google LLC and Facebook, Inc. to pay for news. But after a forceful intervention from the world’s biggest social network, the reality is Silicon Valley’s titans are paying a small price for cementing their influence over the media industry.
Berkshire Hathaway Inc. announced two major new investments, revealing an US$8.6 billion stake in the phone company Verizon Communications Inc. and a $4.1 billion stake in oil company Chevron Corporation.
Brookfield Infrastructure Partners L.P., a unit of Brookfield Asset Management, said it intends to bid $16.50 a share for the 80% stake it does not already own in Inter Pipeline Ltd., the Calgary-based pipeline and petrochemical company.
SoftBank Group reported a record profit in its Vision Fund as a surging stock market lifted the value of its portfolio companies. The Vision Fund reported an 844.1 billion yen (US$8 billion) profit in the December quarter, surpassing record numbers set just a quarter earlier.
D.R. Horton, Inc. – raised its 2021 home sales forecast, as historically low mortgage rates and a pandemic-driven shift towards suburban living continue to stimulate homebuyer activity.
Brookfield Asset Management Inc. and KKR & Co. Inc. are, reportedly, among top infrastructure investors weighing bids for a share of Saudi Aramco’s oil pipelines. Apollo Global Management Inc. and China’s state-backed Silk Road Fund Co., Ltd. are also said to have been studying whether to make offers.
Danaher Corporation – announced that Health Canada has issued Cepheid, a Danaher subsidiary, a medical device license for Xpert® Xpress SARS-CoV-2/Flu/RSV, a rapid molecular diagnostic test for qualitative detection of the viruses causing COVID-19, Flu A, Flu B, and RSV infections from a single patient sample.
The joint venture of Amazon.com, Berkshire Hathaway Inc. and JPMorgan Chase & Co. will cease to exist at the end of February, three years after the companies came together hoping to clamp down escalating healthcare cost.
U.S. stimulus package gets done …no political party wanted to be known as the Grinch who stole Christmas and so Congress finally arrived at an agreement on coronavirus relief.
SoftBank Group shares surged as its paper profit from the initial public offering of DoorDash, Inc. hit $11.2 billion, adding to gains from the prospect the Japanese company could attempt to go private.
Billionaire hedge fund manager William Ackman, who cautiously hedged his portfolio before the historic market sell-off in March, has extended his gains to 62.8% for the year so far.
The owner of the Toronto Blue Jays is reportedly seeking to demolish the Rogers Centre and construct a new stadium as part of a redevelopment. Rogers Communications and Brookfield Asset Management are working with city, provincial and federal government officials on a plan that would effectively cut the Rogers Centre in half.
India’s antitrust regulator approved Reliance Industries’ $3.5 billion acquisition of Future Retail Limited, disregarding calls by Amazon.com, Inc. to block the deal. Competition Commission of India approved the transaction by Reliance Retail Ventures Ltd. and Reliance Retail Ltd., the regulator said on Friday.
Samsung Electronics is challenging Sony Corporation’s stronghold in the global market for image sensors used in smartphones at a time when geopolitical risks involving Chinese technology player Huawei Technologies Co., Ltd. are changing the competitive landscape.
On November 5, Reliance Industries Limited and Reliance Retail Ventures Limited (RRVL) announced that The Public Investment Fund of Saudi Arabia (PIF) will invest approximately $1.3 billion for an equity stake of 2.04% into Reliance Retail Ventures Limited, a subsidiary of Reliance Industries Ltd.
Facebook posted a better-than-projected gain in third-quarter revenue, indicating that a major advertiser boycott had a limited impact against the backdrop of a broader revival of spending on digital marketing. The sales rose 22% to $21.5 billion, compared with the $19.8 billion average analyst estimate in a Bloomberg survey.
Danaher Corporation announced results for the quarter ended October 2, 2020, which included net earnings of $883.5 million, or $1.16 per diluted common share which represents a 38.0% year-over-year increase from the comparable 2019 period.
Altice USA, Inc. raised its bid for Cogeco Inc. and Cogeco Communications Inc. to $8.4 billion, but the offer was immediately turned down by the Canadian cable firm’s controlling shareholder.
Beckman Coulter Inc., a clinical diagnostics leader and Danaher subsidiary, announced its Access SARS-CoV-2 Immunoglobulin M (IgM) assay has received Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration (FDA).
On October 1, Reliance Industries Limited announced that Mubadala Investment Company, the Abu Dhabi-based sovereign investor, will invest US$850 million into Reliance Retail Ventures Limited (RRVL), a subsidiary of India’s Reliance Industries.
Apple Inc. said it is giving some businesses a reprieve from paying a 30% commission on paid events and experiences through mobile apps, a move that comes as the App Store owner faces scrutiny from software developers and regulators over how its digital marketplace operates.
On September 20, media reports announced that ByteDance Ltd. has received tentative approval for an agreement with the U.S. Government to resolve the outstanding issues, which will now include Oracle and Walmart Inc. together investing to acquire 20% of the newly formed TikTok Global business.
Oracle Corporation has reportedly beat Microsoft Corporation in the battle for the U.S. arm of TikTok with a deal structured as a partnership rather than an outright sale.
Altice USA Inc.’s CA$10.3 billion (US$7.9 billion) offer for the U.S. assets of Cogeco Inc. and plan to sell the rest to Rogers Communications Inc. has been rejected by the Canadian cable company’s top investor. “Members of the Audet family unanimously reiterated that they are not interested in selling their shares,” Louis Audet, president of Gestion Audem Inc, said in a statement.
Berkshire Hathaway bought stakes in five of Japan’s biggest trading companies, adding to its wager on the commodities sector and marking one of his largest-ever forays into Asia’s second-largest economy. Warren Buffett’s Berkshire Hathaway has acquired a slightly more than 5% stake in each of the five leading Japanese trading companies.
Warren Buffett’s Berkshire Hathaway said it has sold shares of some of the largest U.S. banks, slashing its stakes in Wells Fargo & Company and JPMorgan Chase & Co. and exiting an investment in The Goldman Sachs Group, Inc.
Talks between SoftBank chip designer Arm Limited and Nvidia Corporation are accelerating, with a deal expected to be reached by the end of the month according to media reports. Negotiations between the companies have been exclusive for the past two weeks, with exclusivity period expected to last 30 to 45 days.
On August 5, Facebook-owned Instagram launched Reels, which is its answer to the popular karaoke app TikTok. Reels enters the short video social media fray as TikTok, threatened with a ban because of its Chinese ownership, has opened negotiations to be acquired by Microsoft Corp.
Total revenue grew approximately 40% year/year to $88.9 billion (vs. 26% in Q1), approximately 9% above consensus and representing the highest level of top-line growth for the company since Q1 2018.
The U.S. economy is forecast to shrink by 6.6% in 2020 due to the shock of the coronavirus pandemic, but a resurgence in coronavirus infections and a systemic increase in poverty could worsen that outlook, the staff of the International Monetary Fund warned last week.
Wunder Capital, the U.S. leader in commercial and industrial solar financing, announced it has partnered with funds managed by Ares Management Corporation’s Infrastructure and Power strategy (AIP), Cyrus Capital Partners, and Keyframe Capital to provide financing for more than US$100 million in commercial solar loans.
Warren Buffett has donated roughly $2.9 billion of Berkshire Hathaway Inc. stock to four family charities and the Bill & Melinda Gates Foundation, the latest but not largest contribution in his plan to give away his fortune.
Billionaire investor William Ackman said in June he was looking to raise $3 billion and commit at least $1 billion from his hedge fund Pershing Square Capital Management LP for a new blank-check investment vehicle, the largest of its kind.
Abu Dhabi National Oil Company (ADNOC) said it had signed a $10 billion gas infrastructure deal with a consortium of investors. The mega pipeline deal is the world’s single largest energy infrastructure investment this year.
On June 18, 2020, Reliance Industries and Jio Platforms Limited announced that the Public Investment Fund of Saudi Arabia (PIF) will invest approximately US $1.5 million into Jio Platforms for a 2.32% equity stake on a fully diluted basis.
Between June 1 and June 15, 2020 Softbank Group repurchased 36.14 million shares for a total amount of JPY188.3 billion. Since the announcement of March 13, Softbank repurchased a total of 107.68 million shares for a total amount of approximately JPY 500 billion.
Pershing Square Capital Management – Bill Ackman’s hedge fund is boasting double-digit gains at a time many portfolios have sunk along with the economy during the coronavirus pandemic, after the billionaire investor plowed cash into a number of companies he already owned and dumped Warren Buffett’s Berkshire Hathaway Inc. among other stocks.
U.S.-China relations remain a concern as tensions show no sign of release. The U.S. Commerce Department added two dozen Chinese companies with ties to Weapons of Mass Destruction and military activities and nine Chinese entities “related to human rights abused in the Xinjian Ulghur Autonomous Region” to the “Entity List”.
Warren Buffett’s Berkshire Hathaway Inc. reported it has sold much of its stake in Goldman Sachs Group, Inc. In a regulatory filing (13F) detailing its U.S.-listed investments as of March 31, Berkshire said its Goldman stake fell 84% to 1.9 million shares, from 12 million at year-end, with the stake’s market value dropping to $297 million from $2.76 billion.
Ares Management Corporation reported first quarter results, which included that despite the economic disruption, the company generated another record level of fee related earnings with growth of 31% versus the prior year period and its fee paying AUM exceeded $100 billion for the first time.
D.R. Horton, Inc. reported that net income per common share attributable to D.R. Horton for its second fiscal quarter ended March 31, 2020 increased 40% to $1.30 per diluted share compared to $0.93 per diluted share in the same quarter of fiscal 2019.
The day after U.S. crude prices crashed into negative territory for the first time, two of three Texas oil and gas regulators delayed a controversial vote to force producers to curtail oil output, predicting the move could lead to protracted legal battle.
The Bank of Canada (BoC) kept its policy interest rate at 0.25%, which amounts to the lower effective bound for a BoC that would prefer to avoid zero/negative interest rates. (That rate had been 1.75% prior to the onset of the COVID-19 crisis, but was cut three times in March by 50 bps apiece, with the last two moves being unscheduled.)
Daily carbon dioxide emissions have fallen about 58% across the EU since coronavirus lockdowns put the world economy into reverse and so reduced the human impact on the environment, according to calculations by Sia Partners, a French consultancy specializing in energy. Emissions from cars and motorcycles were down 88% while those from the energy sector fell almost 40% from before the crisis. (Source: Financial Times)
Canada’s mortgage rates are ....rising - even though the country’s central bank has slashed borrowing costs to combat the COVID-19 pandemic. That’s due to the “enormous pressure” Canadian banks face amid disruptions caused by the outbreak, said Sherry Cooper, chief economist at Dominion Lending Centres Inc. “The costs of funds for banks is skyrocketing and bank earnings are plunging,” Cooper said Monday in a phone interview.
In another unscheduled move, the Bank of Canada has last Friday March 27th cut its target for the overnight rate 50 bps to 0.25% (the lower effective bound). This latest interest rate cut, which brings cumulative conventional monetary easing to 1.50% in just 23 days, an unprecedented pace of easing as economic and financial market damage related to the COVID-19 global pandemic elicits a monumental policy response across the globe.
Reuters highlighted Canada’s federal government would provide $27 billion in direct support to families and businesses struggling because of the coronavirus outbreak, and stands ready to do more. Further, the government will also provide $55 billion in additional aid to businesses and households through tax deferrals. The combined measures will put more than 3% of the country’s annual output into circulation, officials said.
Global banks are pushing for guidance from regulators over the exemptions and temporary permissions they will need to keep their trading businesses open if the coronavirus outbreak forces staff to work from home or triggers a mass quarantine. Trading room compliance is the biggest logistical concern for financial groups as they plan for scenarios such as evacuating offices, moving staff to back-up sites and the shutdown of infrastructure such as postal services.
24 hours after the U.S. Federal Reserve rate cut, the Bank of Canada (BoC) has followed suit, lowering its policy interest rate 50 basis points (bps) to 1.25%. This marks the first rate cut from the BoC since 2015 and its first 50 bps easing since March 2009 (when the global financial crisis raged). So it’s an aggressive move, but one many were primed for post-Fed.
The Globe & Mail reported on Friday that the Canadian economy nearly ground to a halt in the final quarter of 2019, and the few flickers of momentum could be short-lived as the world contends with the coronavirus outbreak.
U.S. housing starts, after surging 17.7% in December to a 13-year high of 1.626 million units annualized rate (upwardly revised), dropped by only 3.6% in January to 1.567 million units, the 2nd highest level in 13 years (taking a backseat to the prior month). Singles fell 5.9% but that can be shrugged off as they had jumped over 14% in December. The more affordable multi-unit category climbed for the fourth month in a row.
The Globe & Mail reported that Bill Morneau is warning that the coronavirus outbreak will have a significant impact on the Canadian economy, hitting the tourism and petroleum industries particularly hard. The Finance Minister said he expects the economic fallout from the outbreak, which has killed more than 1,000 people and infected tens of thousands, will be a major topic as he attends meetings in the coming weeks with Group of 20 finance ministers and central bank governors.
American companies kicked off the year in high style, cranking out 225,000 net new jobs in January 2020. This fits with a spate of other indicators (ISMs, auto sales, consumer confidence) that suggest resilience in the economy.
Housing markets across the world, from the U.K. to China, are losing steam, holding back prospects for the global economy that last year grew at its slowest rate since the financial crisis. Across 23 countries, an index of inflation-adjusted home prices compiled by the Federal Reserve Bank of Dallas grew 1.8 per cent in the third quarter of 2019 from a year earlier, down from a recent peak of 4.3 per cent in 2016, according to an Oxford Economics analysis.
Stocks sharply declined early on Monday after more cases of the coronavirus were confirmed over the weekend. This has increased fear over the effect this will have on the global economy and its growth.
The world economy expanded by just 2.3% last year, its slowest pace in a decade, and could grow by 2.5% in 2020 if downside risks are kept at bay. People in a number of countries, mostly in Latin America and sub-Saharan Africa, will see their incomes stagnate or decline this year, the UN stated. “For this year there is a hope of a pick-up, but downside risks and vulnerabilities remain very significant,” said Richard Kozul-Wright, head of globalization and development strategies at the UN Conference on Trade and Development and co-author of the report.
The Globe & Mail reported that Canada’s banks are under intense pressure to prove to nervous shareholders that banks are adequately prepared to absorb loan losses when the next economic downturn arrives, according to Bank of Nova Scotia’s chief executive officer.
Despite this being the year 2020, don’t expect a significant improvement in your vision when it comes to forecasting the economy and financial markets against renewed geopolitical stress. Nonetheless, geopolitical uncertainty is not a sufficient condition to write off risk assets. 2019 was a case in point. Global equity markets had their best performance in a decade in 2019 with the MSCI ACWI Index returning 26.9%.
A group of global banks, including Barclays, UBS, Citi, JP Morgan and BNP Paribas, were ordered to pay a total of $337 million to settle antitrust claims around the alleged rigging of the $550 billion market for bonds backed by Fannie Mae & Freddie Mac.
Equifax Canada reported that the average Canadian consumer owed $72,500 in debt at the end of September 2019, an increase of 2.1% compared to the same time last year.
The Bank of Canada (BoC) left the overnight rate unchanged at 1.75%, and the accompanying communiqué had an optimistic tone. The domestic economy was described in broadly positive terms, and the global economy was seen as stabilizing despite ongoing trade tensions.
U.S. consumer confidence unexpectedly fell for the fourth consecutive month in November, down 0.6 pts to a 5-month low of 125.5. Despite record highs on Wall Street and still-low rates, the view of the present situation dimmed for the second time in three months
Google will stop giving advertisers the ability to target election ads using data such as public voter records and general political affiliations. The move coincides with pressure on social media platforms over their handling of political advertising ahead of the U.S. presidential election in 2020.
Bank of England left rates unchanged at 0.75% but the markets were a little surprised that two members dissented (Michael Saunders and Jonathan Haskel) and voted for a cut. Both cited heightened global risks, Brexit and the soft labour market. GDP forecasts for 2020 were down to 1.2% and 2021 growth forecasts fell to 1.8% from 2.3%.
EU member states have agreed to grant Britain a three-month flexible delay on its departure from the European Union, European Council President Donald Tusk has tweeted. Envoys representing the 27 remaining European Union members states agreed to the request, which will see the UK leave on January 31, 2020, EU Council President Tusk said on Twitter.
Bloomberg reported today that Royal Bank of Canada set a goal nine years ago to become a Top 10 investment bank in the U.S. -- but cracking Wall Street’s upper echelons for advising on takeovers had proved elusive.
BHE Canada, a unit of billionaire Warren Buffet’s Berkshire Hathaway Energy, will start construction on a $200 million wind farm in southeast Alberta next year.
Linamar Corporation estimated a profit impact of up to $1 million per day due to a fall in orders from its customer General Motors Co. GM workers have been on a two-week long strike, forcing the number one U.S. automaker to halt production at its pickup and transmission plant in Mexico and crippling its operations across North America.
A random market indicator which has worked amazingly well is the Super Bowl Indicator that says that the stock market’s performance in a given year can be predicted based on the outcome of the Super Bowl of that year. It was “discovered” by Leonard Koppett in the ‘70s when he realized that it had never been wrong, until that point.
Cruise operator Carnival cut its 2019 profit forecast for the third time as it expects to take a hit from higher fuel prices.
U.S. housing starts jumped 12.3% in the month, bringing to an end three straight declines, and the largest increase since October 2016 (and that particular surge was a rebound from a few soggy/windy months). The current level of 1.364 million units is the highest since June 2007.
U.K. wages are rising at their fastest rate in more than a decade and the unemployment rate has fallen to a record low. Latest figures from the Office for National Statistics (ONS) show earnings excluding bonuses growing at an annual pace of 3.8% year/year in the May to July period, down slightly from the previous reading of 3.9% year/year.
Bank of Canada left the overnight rate unchanged at 1.75% last week. The BoC acknowledged Q2 2019 Canadian GDP growth was better than expected, but thought that some of the strength was temporary, e.g. rebound in energy output and exports. The central bank bemoaned weakness in business investment and consumption and expects economic activity to slow in the second half of the year.
Canadian economy expanded ahead of the expectations, at an annualized rate of 3.7% in the second quarter, thanks to a jump in goods exports. Exports of goods jumped 3.7% in the second quarter, on higher exports of energy, farm and fishing products, and non-metallic minerals.
U.S. new home sales plunged 12.8% in July to 635,000 units, annualized, a 2-month low. But note that June was revised up big time, and are now up 20.9% to 728,000 units (was 646,000 units), the highest since July 2007.
Last week, the Washington Post reported that Denmark’s Jyske Bank has started offering home buyers 10-year mortgages at an interest rate of -0.5 per cent.
U.K. Employment - The July index of 49.7 (where 50 signals expansion) means permanent placements have now fallen for five months in a row – the sixth time in seven months. The rate of decline was however modest and a slight improvement from June’s 48.7 and May’s 48.5, with Brexit continuing to weigh on hiring decisions.
U.S. trade deficit shrank less than expected in June and only slightly to $55.2 billion, with both exports and imports retracing prior month gains. The deficit with China remained large but has narrowed this year.
The International Monetary Fund (IMF) has cut its growth forecasts for the global economy for this year and next. It predicts growth of 3.2% in 2019, down from its April forecast of 3.3%. Growth next year is set to pick up to 3.5% next year, although that is below its earlier forecast of 3.6%.
BlackRock, Inc., the world’s largest asset manager, took in less cash last quarter as investors moved into lower-cost bond funds and it made less money lending out stocks.
China’s exports (USD-terms) was slightly better-than-expected at -1.3% year/year in June while the contraction in imports came in at a larger -7.3% year/year. Trade surplus widened to US$50.98 billion from US$41.66 billion in May.
Canada’s goods trade registers a surplus of C$760 million for May from a revised deficit of C$1.08 billion. The trade surplus with the U.S. registered a surprising C$5.95 billion print. Nominal exports up 4.6% (against imports of 1%) and in real terms, exports were up 4% (against 1.2% gain in imports).
U.S. new home sales unexpectedly fell for the second month in a row, down 7.8% in May to 626,000, the lowest since December. Revisions to the prior 2 months were, on net, lower.
Oracle Corporation forecast current-quarter profit above estimates, as the business software maker benefited from demand for its on-premise IT, cloud services and license support businesses. The company said, assuming currency headwind, it expected first-quarter adjusted profit to be between 80 cents and 82 cents per share.
U.S. retail sales jumped 0.5% in May, meeting expectations. But perhaps the better news came from the significant revisions for the past couple of months. March’s already strong 1.7% rise was revised to 1.8%, and April’s decline was erased to reflect a 0.3% increase. This once again shows how one should never get too comfortable with any economic data release as revisions can change the picture a great deal.
The global economy is weakening, according to a new assessment from the World Bank. The Bank said it now expects growth of 2.6% for 2019 edging up to 2.7% the following year. The slowdown is widespread, according to the Bank’s economists, affecting many countries.
The Canadian economy advanced by 0.4% in the first quarter, a modest pace of improvement, falling short of the already low expectations for a 0.7% increase, with March being the stronger of the three months surveyed. A strong quarter in the consumer sector and business activity was offset by weakness in residential construction and a drop in net exports.
U.K. inflation jumped above the Bank of England’s target of 2% in April, fueled by rising prices for air fares, gasoline and household electricity and gas. Consumer prices were 2.1% year/year higher than a year ago, as well as higher than March’s reading of 1.9% year/year.
Google LLC announced an expansion of its advertising real estate to boost revenue from mobile shoppers. It will feature ads on the homepage of its smartphone app worldwide, show more ads in Maps and place ads with image galleries in search results.
After weeks of negotiations with Beijing and indications that a trade deal was in the making, President Trump suddenly decreed a tariff hike to 25% from 10% on $200 billion of Chinese imports, effective May 10.
Stock Markets fell on Monday on the U.S. President Donald Trump’s trade tweets over the weekend. Trump threatened to raise tariffs from 10% to 25% on $200 billion of China’s exports to the U.S. The U.S. is still unhappy that China demands a very broad and immediate rollback of Special 301 tariffs without offering more concessions on enforcement, or China’s own tariffs.
AT&T Inc. reported first quarter results, which included total revenue for the quarter up nearly 18% to $44.83 billion, just shy of the expectations for $45.11 billion. AT&T lost a net 544,000 premium TV subscribers, a category that includes DirecTV satellite and U-verse television customers.
U.K. Wage growth at decade high - According to the latest Office for National Statistics, labour conditions within the jobs market remained tight with employment growing by 179,000 in the three months to February.
The global economy is at what the International Monetary Fund (IMF)’s chief economist calls a “delicate moment”. Gita Gopinath says that while she does not predict a global recession, “there are many downside risks”.
The Globe & Mail reported on April 7, 2019 that Canada’s commercial real estate market is defying expectations, as investors buy skyscrapers in Vancouver, Toronto and Montreal to capitalize on surging demand by tenants for prime urban space.
U.S. housing starts fell 8.7% to a 2-month low of 1.162 million units in February 2019. Easing some of that sting were the upward revisions to the prior two months, and the fact that February was a terrible month for weather.
The EU granted an extension to April 12th but by then the U.K. Parliament has to decide if it wants to go with Prime Minister May’s deal and exit on May 22, 2019 or come up with other alternatives that may include, no-deal Brexit, re-negotiate a more detailed exit plan with a longer delay, another Brexit vote or cancelling Article 50 altogether.
Greece has entered a period of economic growth that puts it “among the best performers in the eurozone”. That rather striking judgement comes from the International Monetary Fund (IMF) in a new report on the Greek economy. A senior IMF official said there were a lot of positive developments to point to.
The outlook for the U.S. economy has softened and there may be a more persistent slowdown on the cards overseas, bolstering the need for a period of “watchful waiting” on interest rates, a senior Federal Reserve policymaker said.
China Economy - The Caixin Purchasing Manufacturers’ Index (PMI) jumped to 49.9 last month — close to the 50 mark that divides expansion and contraction — and soundly beating the consensus of 48.5. Similar to recent signals in the official PMI data, the forward-looking new orders showed a strong rebound, Bloomberg Economics said.
U.S. Business activity remains robust in the U.S., with durable goods orders advancing by 1.2% in December, just shy of the expectations for a 1.5% improvement.
Germany’s economy just about avoided falling into recession during the final three months of last year. The German economy registered zero growth during the fourth quarter of 2018, the country’s Federal Statistics Office said.
The Bank of England expects growth this year to be the slowest since 2009 when the economy was in recession. It is forecasting growth of 1.2% this year, down from its previous forecast of 1.7% made in November.
U.K. Brexit Update - The Brexit train rolled on last week with the U.K. parliament conducting a debate and series of votes on possible deal options.
Sales of previously owned homes in the US fell more than expected last month to the lowest level since November 2015, data on Friday showed.
Royal Bank of Canada (RBC) has become the first of the major banks to lower its posted interest rate for five-year fixed-term mortgages, a move that has been widely anticipated amid tumbling bond yields.
The World Bank cut its forecast for the global economy as slowing growth in trade and investment and rising interest rates sapped momentum, especially in emerging markets, according to the development lender’s semi-annual update to its global outlook.
Toronto, Vancouver Housing Sales Plummet to Decade-Lows in 2018 after new data was released from the Toronto Real Estate Board, Bloomberg highlighted that higher borrowing costs and stricter mortgage rules dampened real estate sales.
U.S. retail sales rose 0.6% in March, beating expectations which were looking for 0.4%. Sales of motor vehicles and parts rose for the first time in five months, climbing 2.0% on a monthly basis.
Oracle Corporation as reported by Bloomberg, Oracle Corp. chief executive Safra Catz criticized the bidding process for a huge Pentagon cloud computing contract in a private dinner with President Donald Trump, complaining that it seemed designed for Amazon.com, Inc., to win.
The Wall Street Journal reported that Walmart is in preliminary talks to buy Humana Inc. Humana is among the top 5 largest health insurers in the country and its Pharmacy Benefits Manager – Humana Pharmacy Solutions - is also among the largest – filling an estimated 439 million prescriptions in 2017 (per Humana April 2017 Investor Day).
U.S. existing home sales bounced back 3.0% in February, beating expectations for about a 0.5% rise and the first increase in three months. The 5.54 million level (annualized) is only a 2-month high but the upward trend remains intact. Sales of single-family homes were snapped up (+4.2%).
The European Union has proposed making it a formal requirement for asset managers to consider “sustainability” when picking investments. The E.U. wants more money going into sustainable and “green” projects that help cut greenhouse gas emissions, as part of a wider “capital markets union” project to expand funding from financial markets for companies and growth.
We attended the EnTrustPermal’s 10th Annual Investment Summit last week. We were pleased to hear most of the investment themes we have been espousing for years at Portland being reinforced as top of mind for some of the world’s most renowned (mostly activist) investors.
Berkshire Hathaway Inc. posted a record $44.94 billion annual profit, though $29.1 billion stemmed from the slashing of the U.S. corporate tax rate, which reduced the Omaha, Nebraska-based conglomerate’s deferred tax liabilities.
U.S. housing starts beat expectations with a 9.7% jump to 1.326 million units annualized in January, the 2nd highest level in 10½ years (or, more specifically, August 2007).
U.S. energy companies added 26 oil rigs this week, boosting the count to 791, its highest since April 2015. The U.S. Energy Information Administration in February projected U.S. production would rise to a record high annual average of 10.6 million barrels per day (bpd) in 2018 and 11.2 million bpd in 2019, up from 9.3 million bpd in 2017.
The Eurozone’s economy grew at its fastest pace for a decade in 2017, according to official figures. The economy of the 19-nation bloc grew by 2.5% last year, according to Eurostat, the strongest growth since the 3% rate seen in 2007.
Core retail sales, which excludes sales of vehicles and parts, jumped by 1.6%, ahead of the expectations for a 0.8% advance. Sales of electronics led in the month, supported by clothing, sporting goods and general merchandising.
U.S. government shutdown will cause the release of any data compiled by the federal government to be postponed. Data from the Federal Reserve Board or the regional Federal Reserve banks will not be impacted, nor will private sector releases.
Canada’s mortgage-rate trendsetter, Royal Bank of Canada, hiked its posted five-year fixed mortgage rate Thursday. Government regulations now force most Canadians to prove they can afford much higher rates before getting approved for a mortgage called ‘stress testing’.
Employment in Canada surprisingly expanded by 78,600 positions in December, as the expectations were only factoring in about 1,000 jobs added in the month.
Canadian economy added 79,500 jobs in November, significantly outpacing the expectations for 10,000 job gains and October’s 35,300 positions. The job gains were driven by retail, manufacturing, education and construction.
Paris has won a battle to host the European Banking Authority (EBA), which will relocate from London after the UK leaves the European Union.
Venezuela has suffered what is expected to be the first in a cascade of defaults on more than US$60 billion in international bonds after missing several interest payments.
Brookfield Property Partners L.P. (BPY): Bidding U$23/share for the 66% of GGP Inc. it does not own for a Transaction Value of U$14.8 Billion.
Canadian rig count increased by 2 rigs week/week, and is up 26% from the level this time last year.
U.S. durable goods orders, a key indicator of U.S. business activity, advanced 2.2% in September, well ahead of the expected 1.0% improvement and building on August’s robust 2.0% growth.
Alphabet Inc. – Lyft Inc. has raised $1 billion in fresh financing in a round led by one of Alphabet’s investment funds, further complicating the convoluted world of ride-hailing alliances and dealing a blow to rival Uber Technologies Inc.
Bank Of Canada Governor Poloz says there is “comfort” that the global economy continues to improve and that Canada has led the Group of Seven in growth.
Canadian rig count is up 28% from this time last year.
Dufry AG will open a new downtown retail store at Genting Highlands, which is an entertainment and shopping resort close to Kuala Lumpur.
Carnival Corporation – Fincantieri, leader in cruise ship design and construction, and Carnival Corporation & plc, the world’s largest cruise company, announced the signing of a memorandum of agreement.
Bitcoin “is a fraud” and will blow up, Jamie Dimon, chief executive of JPMorgan, said last Tuesday.
Alphabet unit Google appealed against a record €2.4 billion EU antitrust fine.
Warren Buffett celebrated his 87th birthday by going on record on CNBC on a number of topics related to recent developments and portfolio decisions.
Oracle Corporation this year is hiring more than five-thousand new engineers, consultants, sales and support people into its rapidly growing cloud business.
U.S. industrial production, rose 0.2% in July, slightly below expectations and following an unrevised 0.4% gain in June.
Alphabet Inc. reported a 21% jump in quarterly revenue, maintaining a growth rate that is rarely seen among companies its size.
The Globe & Mail reported last Monday that house sales fell in a majority of markets across Canada in June.
The Bank of Canada raised interest rates last Wednesday.
Canada Employment rose a hefty 45,300.
Alphabet Inc. (GOOGL) – Not surprisingly, the largest EU regulatory fine has seen a lot of press.
Canadian retail sales significantly outperformed expectations.
Eurozone governments threw Greece another 11th-hour credit lifeline.
An anonymous fan of Warren Buffett agreed to pay $2,679,001 at an online charity auction.
Pattern Energy Group Inc. has inaugurated the 324MW Broadview Wind power unit.
Canadian oil rig count increased by 7 rigs, and is up 114% from the level this time last year.
A Google artificial intelligence program defeated a Chinese grand master at the ancient board game Go.
Prime Minister, Justin Trudeau is setting up his new infrastructure bank in Toronto.
The French election Emmanuel Macron defeated Marine Le Pen by 66% to 34%.
U.S. new home sales jumped 5.8% to 621,000 annualized in March.
U.S. manufacturing production, which makes up 75% of total industrial production.
The U.S. consumer sentiment, meanwhile, bounced back in April, against expectations for weakening during the month.
Just released, the Canadian housing starts jumped in March, to a 253,700 units annualized level.
Canada January GDP Jumps by 0.6% on Widespread. According to Statistics Canada.
Royal Bank of Scotland says branch transactions are down 43% since 2010; online and mobile increased >400%.
Canada’s foreign trade balance improved to a $0.81 billion surplus in January, from a $0.45 surplus in December.
The U.S. 2 year/10 year treasury spread is now 1.18% and the U.K.’s 2 year/10 year treasury spread is 1.10%.
U.S. existing home sales exceeded expectations. Sales jumped 3.3%.
U.S. land rig count increased by 13 rigs week/week to 730 rigs, up 96 rigs in the last five weeks and is up 95% off the May 2016 trough.
Canadian economy added 48,300 new jobs in January, surprising on the upside, as 15, 800 full-time and 32,400 part-time positions.
The Eurozone’s economy is showing signs of recovery after the latest data pointed to a fall in unemployment.
Japan’s exports expanded more than expected at 5.4% year/year in December.
Retail sales in Canada fell short of expectations for the month of November.
U.S. retail sales grew 0.6% in December, not far from expectations while November was revised up slightly.
U.S. Nonfarm payrolls rose 156,000 in December, extending the longest unbroken string of monthly advances since record-keeping began in 1939.
Broadband internet access will be considered a basic service in Canada, the country’s telecom regulator ruled.
U.S. industrial production headline reduced by 0.4% mainly due to the volatile utilities sector.
Reuters highlighted that in the Bank of Canada’s (BoC) rate decision to hold the overnight rate unchanged.
Italian Prime Minister Matteo Renzi said he would resign after suffering a crushing defeat on Sunday.
Retail sales in Canada advanced by 0.6% in September, much as expected, driven chiefly by strong auto sales.
The Bank of Japan (BOJ) announced its first operations to purchase an unlimited amount of Japanese government bond.
Donald Trump’s victory this week creates numerous opportunities and potentially risk.
Berkshire Hathaway Inc. reported third-quarter profit dropped 24% than the prior year, when it recorded a large one-time gain, but acquisitions helped boost operating profit at the conglomerate run by billionaire Warren Buffett.
The U.S. economy rebounded smartly in the third quarter, which we think keeps the Federal Reserve on track for a year-end rate hike.
Britain could slash corporation tax to 10% if the European Union refuses to agree a post-Brexit free trade deal.
Bank of America Corporation reported earnings per share of $0.44, well above consensus.
Citigroup Inc. is investing another $1 billion in its Mexican bank .
OPEC lines-up production cut – Just when everyone least expected, OPEC managed to reach an agreement.
Barclays Plc - Offers to buy back 8 bonds worth as many as $2.1 billion.
Citigroup Inc. said its trading revenue is performing above expectations so far in the third quarter.
Barclays PLC has struck a landmark deal with the Commonwealth Bank of Australia.
Bank of Nova Scotia, Canada’s third-biggest lender, has pulled back on mortgage lending in its domestic market.
Barclays PLC has announced that it completed the sale of Barclays Risk Analytics And Index Solutions Ltd..
HSBC Holdings Plc bought back 1.45 million shares.
Brookfield Asset Management Inc. (BAM) reported second quarter results which exceeded expectations in terms of funds from operations (FFO) generation.
Three of the U.K.’s biggest banks face extra charges of about £1.5 billion ($2 billion).
First National Finance Corporation reported Q2 2016 core EPS of $0.79 compared to consensus of $0.70.
Citizens Financial Group Inc. reported Q2 Earnings Per Share (EPS) of $0.46.
Bank of America Corporation reported Earnings Per Share of $0.36.
Berkshire Hathaway Inc. – Brooks Sports Inc., the running brand owned by Warren Buffett’s Berkshire Hathaway.
Berkshire Hathaway Inc. is seeking permission from the Federal Reserve to increase its ownership stake in Wells Fargo & Company.
UK decides to leave European Union: Firstly, I was wrong in thinking the undecided camp would be the swing vote (ie. Expats and younger voters being pro-EU but Brexit voters overall were much stronger than polls showed). Britain has voted to leave the EU, a stunning repudiation of the nation’s elites that deals the biggest blow to the European project of greater unity since World War Two.
Brookfield Asset Management Inc. (BAM) today announced the completion of the spin-off of Brookfield Business Partners L.P. (BBU).
JPMorgan Chase & Co. Chairman and Chief Executive James Dimon warned that the bank could cut jobs in the U.K.
Bank of America Corporation’s U.S. Trust business plans to add more than 100 financial advisers.
Bank of Canada left rates unchanged at 0.5% as expected. The Bank remains optimistic on a U.S. recovery and says the wildfires could knock off 1.25% from GDP growth.
Sixteen of the world’s largest banks including JPMorgan Chase & Co. and Citigroup Inc. must face antitrust lawsuits.
U.S. retail sales beat expectations in April, surging 1.3% in the month.
Last Friday, Reuters highlighted employment data from Statistics Canada that outlined that the Canadian labor market stalled in April.
Berkshire Hathaway Inc.’s annual meeting in summary: 1) Warren Buffett is open to additional (perhaps multiple) acquisitions.
Influenced by the withdrawal of quantitative easing, the U.S. 30 year mortgage market rate has increased to 3.59% (was 3.31% end of November 2012, the lowest rate since the Federal Reserve began tracking rates in 1971).
The new housing price index in Canada beat the expectations in February.
Oversea-Chinese Banking Corporation Limited (OCBC) has agreed to buy Barclays’ wealth management operations in Singapore.
Warren Buffett’s Berkshire Hathaway said it has increased its ownership stake in Wells Fargo & Company to 10%.
The Goldman Sachs Group, Inc. is buying an online retirementsavings start-up .
Canadian economy lost 2,300 jobs in February, against expectations for a 9,000 jobs gain in the month.
Greece’s creditors will attempt to bridge their differences at a meeting of eurozone finance ministers.
U.S. offshore rig count increased by 2 units to 27 and is down 50% over the last 18 months.
Inflation accelerated in Canada, to a 2.0% rate of change from the prior year, exceeding the consensus expectations calling for a more muted 1.7% reading in the month.
Berkshire Hathaway Inc. – has bought an additional $1 billion of stock in The Phillips 66 Company this year.
UBS AG‘s prized wealth management division and its ‘new’ investment bank suffered big earnings falls in the fourth quarter. The Swiss bank has been Europe’s star performer since its 2012 decision to dramatically cut its investment bank and put wealth management, at the centre of the group.
US new home sales surged 10.8% in December to 544,000 units annualized. That was a lot more than expected.
US headline inflation rate, as measured by the year on year change in the consumer price index (CPI), was 0.7% for the month of December.
Canadian oil production – Oil companies reeling from the collapse in global crude prices have slammed the brakes on conventional crude production in Canada.
RBC set to raise mortgage rates: The Globe & Mail reported last Tuesday that Royal Bank of Canada is set to raise rates on several of its mortgages.
Commerzbank ag has sued four banks in the United States,.