Warnings about Canada's red-hot housing markets are ringing out loud and clear from a pair of the country's top policy leaders. It started with Bank of Canada Deputy Governor Paul Beaudry sounding the alarm yesterday about the "influx" of investors driving up home prices, and potentially spreading risk of a correction that could be painful for highly-indebted homeowners when hot money flees the market. Then, the country's top banking regulator chimed in. Peter Routledge, the superintendent of financial institutions, warned on some questionable use of home equity lines of credit, said household credit risk is "growing marginally more fragile", and called for a more aggressive response to the supply-demand imbalance.
TRACKING B.C. FLOOD RECOVERY
The big news today is the expected resumption of Canadian National’s rail service between Vancouver and Kamloops, joining Canadian Pacific which restarted its operations in that corridor yesterday. Unfortunately, as of this morning, Environment Canada had four rainfall warnings in place for the province. We’ll keep chasing insight on the challenges ahead.
DIGGING INTO CANADA’S BIGGEST IPO OF THE YEAR
We’ve got the chief executive of Economical Insurance’s parent company lined up this afternoon to discuss the long and winding road to listing on the Toronto Stock Exchange in this country’s largest initial public offering of the year. Will be fascinating to get the inside perspective on going public, as well as insight into the outlook for the property and casualty insurance industry in the aftermath of the disaster in British Columbia. Before that, we’ll hear from the chief of executive of another company that recently hit the TSX, when Coveo’s Louis Têtu joins The Open.
IN CONVERSATION WITH CAROLYN WILKINS
The former senior deputy governor of the Bank of Canada joins Jon this morning, fresh off delivering a wide-ranging speech on the crypto market in her function as an external member of the Bank of England's Financial Policy Committee. In her remarks, she singled out Bitcoin as being "not useful" and having a "questionable" net benefit for public interest. She also called out WealthSimple for its role in stoking retail investor interest. The big question is how regulators can keep pace to drive out bad actors in the crypto space (or, "bandits", as she calls them). We'll find out when she speaks with Jon at 10:10 a.m.
AWAITING U.S. THANKSGIVING BONANZA
This has the potential to be an interesting day. A slew of American data landed at 8:30 a.m. ahead of the holiday; it included initial jobless claims at the lowest level since 1969 – which is bound to raise questions about how quickly the U.S. Federal Reserve will want to taper and eventually raise rates. Beyond the data and market reaction, there are at least two big industries to be mindful of as Americans prepare to celebrate the holiday: the next couple of days will be a crucial test for airlines amid the annual stampede of travelers. And, of course, U.S. Thanksgiving means Black Friday is almost upon us. So, lots for us to sort through.
OTHER NOTABLE STORIES
- A new global survey of business leaders by HSBC is painting the picture of a cautious corporate landscape in this country. Barely half (56 per cent) of Canadian respondents said they’re more optimistic than they were a year ago, compared to 72 per cent of American respondents who are feeling better. The survey’s other findings suggest Canadian business leaders are moving slowly in bolstering their international supply chain options, are circumspect about high-profile climate meetings, and are more worried about low workforce morale than their global peers. We’ll explore the key takeaways this afternoon in Bloomberg Markets.
- Alimentation Couche-Tard is boosting its dividend almost 26 per cent to 11 cents per share. That sweetener came alongside results showing some profit erosion in the latest quarter, which the company attributes to higher expenses.
- We’ll definitely want to keep an eye on shares in Standard Lithium today. Early this morning, it announced a $127-million private placement with a subsidiary of Koch Investments Group via shares priced at $9.43 apiece. The big-name backing for Standard Lithium comes a few days after the company was thrust into the spotlight by short seller Blue Orca Capital.
- Nordstrom shares collapsed in after-hours trading yesterday after the retailer reported third-quarter profit that fell way short of the average estimate. Selling, general and administrative expenses jumped to US$1.2 billion from US$964 million a year earlier, with Nordstrom pinning the blame on labour cost pressure.
- Gap was also pounded by investors after the bell as the retailer slashed its full-year profit forecast while warning it could miss out on US$650 million in sales due to supply chain problems, and faces US$450 million in expenses for air freight. Gap also lopped 10 full percentage points off its 2021 sales growth outlook.
- BHP is once again buying itself more time to finalize the takeover of Noront Resources. The Australian-based miner announced this morning that its offer of 75 cents per share will be valid until Dec. 14. It was previously scheduled to expire next Tuesday. The extension is designed to give BHP more time to secure the support of Wyloo Metals.
- TSX-listed BSR Real Estate Investment Trust is on our radar after it announced a pair of divestments that fetched US$147.9 million.
NOTABLE RELEASES/EVENTS
- Notable data: U.S. initial jobless claims, GDP (Q3), durable goods orders, new home sales, personal income and spending
- Notable earnings: Deere & Co.
- 10:30: CRTC hearing into Rogers' proposed takeover of Shaw continues. Notable presenters include Cogeco Communications and Public Interest Advocacy Centre and National Pensioners Federation
- 13:00: Alberta Jobs, Economy and Innovation Minister Doug Schweitzer announces new business accelerators to support startups
- 14:00: U.S. Federal Reserve releases minutes from last meeting
- 16:30: Deputy Prime Minister and Finance Minister Chrystia Freeland makes announcement alongside Employment Minister Carla Qualtrough (plus avail)
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