Top stories today
Markets close out week in the red over ’higher for longer’ interest rate expectations
Canada’s main stock index closed out today down just a handful of points after falling more than 400 points a day earlier, while U.S. stock markets also moved lower.
It was Wall Street’s worst week in six months, but it closed with more of a whimper than a bang as Treasury yields softened slightly and investors continued to digest the U.S. central bank’s new projections for the economy and for interest rates.
In New York, the Dow Jones industrial average was down 106.58 points at 33,963.84. The S&P 500 index was down 9.94 points at 4,320.06, while the Nasdaq composite was down 12.18 points at 13,211.81.
In Canada, the S&P/TSX composite index closed down 11.65 points at 19,779.97.
The Canadian Press
Despite difficulty with Ottawa, Alberta has allies in Trudeau cabinet: Danielle Smith
Alberta Premier Danielle Smith told a business conference on Friday that despite her concerns with the federal Liberal government, there are some cabinet ministers she can work with.
Smith has been at odds with federal Environment Minister Steven Guilbeault and Natural Resources Minister Jonathan Wilkinson amid concerns over Ottawa’s climate-change policies and transition plan for a net-zero emissions economy.
Guilbeault intends to publish draft regulations this fall to cap emissions from oil and gas, then force them downward overtime. Ottawa has also set a target to have the electricity grid be net-zero by 2035, but Alberta says it’s unrealistic.
Smith says Alberta won’t implement the emissions cap, nor will it follow the 2035 target.
The premier told delegates at the Global Business Forum in Banff, Alta., that Wilkinson needs to answer for comments he made earlier this week at the World Petroleum Congress in Calgary.
Wilkinson’s call for the industry to work aggressively to get to net-zero was basically telling them to “pack it up, because the oil and gas industry is winding down,” said Smith.
“You could just feel the energy leave the room and you could just feel the investment dollars leave the room.”
Smith said energy producing provinces such as Alberta, Saskatchewan and Newfoundland and Labrador, can’t trust the Trudeau government to look out for their interests at international conferences.
“After hearing how the natural resources minister talks about our industry, after hearing how the federal environment minister talks about our industry, we can’t afford to let them carry our message,” Smith said.
“We can’t afford not to be there.”
Smith said she has been in discussions with Saskatchewan Premier Scott Moe and intends to talk to Newfoundland and Labrador Premier Andrew Furey about joint presentations at conferences in the future.
Despite her disappointment with Wilkinson and Guilbeault, Smith said it’s not all bad.
Finance Minister Chrystia Freeland among the top allies, she said.
“Let’s give her credit for shepherding through all of the constant need to give more debt financing to Trans Mountain pipeline to get that to the finish line. That has not been easy,” Smith said.
She also praised Innovation Minister Francois-Philippe Champagne, Public Safety Minister Dominic LeBlanc, Labour Minister Seamus O’Regan and Employment Minister Randy Boissonnault.
“I would say it’s not uniformly negative in the Liberal caucus. But for some reason they’re allowing Stephen Guilbeault to be a maverick and a renegade and quite offensive to those of who are trying to be reasonable and adult about this,” Smith said.
Smith said it’s time for the federal government to back away from setting “aggressive targets” in dealing with the provinces.
“Aggressive targets are not helpful. They’re not helpful to us. They’re not helpful to investors.”
The Canadian Press
Doug Ford shuffles cabinet after minister resignations
Ontario Premier Doug Ford has shuffled his cabinet in the wake of two minister resignations, moving David Piccini from environment to labour, promoting Andrea Khanjin to cabinet as environment minister, and promoting Todd McCarthy from an associate minister to minister of public and business service delivery.
The Canadian Press
Ramp up in U.S. auto strike expected to affect Canadian parts producers
Autoworkers in the U.S. ramped up their strike Friday in a move that’s expected to have knock-on effects for Canadian parts producers.
The expanded strike saw United Auto Worker members walk out at 38 General Motors and Stellantis parts-distribution centres in 20 states, adding 5,600 workers to the 13,000 who began strikes last week at three Ford, GM and Stellantis assembly plants.
Sam Fiorani, vice-president of global vehicle forecasting at AutoForecast Solutions, says he expects Canadian parts suppliers to be either directly or indirectly affected by any shutdowns, whether they’re assembly plants or parts distribution centres.
Canadian companies operating in the U.S. have already been affected by the strike, with Magna International Inc. confirming they’ve temporarily laid off about 650 employees at a seat producer that suppliers one of the affected plants.
The Canadian Press
Supply management off-limits in Ottawa’s competition drive
Industry Minister François-Philippe Champagne was on BNN Bloomberg this morning to talk about how the federal government aims to enhance competition in the grocery sector.
But when interviewer Amber Kanwar asked why Ottawa didn’t loosen Canada’s supply management system to accomplish that, the minister balked.
“We’re not going to go there. You know, supply management has been part of the fabric of this country,” Champagne said. “I would say you just need to talk about farmers in small communities. And I will tell you that this is not something that we will entertain.”
Canada’s supply management controls the supply of dairy products and poultry and eggs through production controls and pricing. It’s been the target of more than one trade dispute and critics at home say the policy leads to higher prices for Canadians while stifling innovation and export opportunities.
Champagne went on to say there were many other ways to boost competition such as the bill introduced yesterday by Finance Minister Chrystia Freeland designed to strengthen Canada’s competition law.
Midday markets: Stocks bounce back after jittery week
Broad-based but shallow strength helped lift Canada’s main stock index modestly higher in midday trading after falling more than 400 points a day earlier, while U.S. stock markets also posted gains.
The S&P/TSX composite index was up 66.80 points at 19,858.42 at noon.
In New York, the Dow Jones industrial average was up 25.52 points at 34,095.94. The S&P 500 index was up 22.74 points at 4,352.74, while the Nasdaq composite was up 88.66 points at 13,3312.65.
“We could get some relief before we head into the weekend,” said Matt Maley, chief market strategist at Miller Tabak + Co. “However, with bond yields still at 15-year highs (albeit slightly lower than yesterday), it’s going to be difficult for a bounce to gain much traction going forward.”
The Canadian Press, Bloomberg
UAW turns up heat on GM and Stellantis but spares Ford
General Motors Co. and Stellantis NV face walkouts at 38 more facilities as talks with their workers’ union failed to make headway, even as Ford Motor Co. was spared the escalation after making progress in the negotiations.
The United Auto Workers will target GM and Stellantis parts plants, UAW President Shawn Fain said in a Facebook livestream briefing on Friday. The strike of one Ford factory in Michigan will not be expanded at the current time, he said.
The additional factories will be subject to a walkout as of 12:00 p.m. local time, Fain said.
Canada’s Stelco weighs bid for U.S. Steel, sources say
Stelco Holdings Inc., Canada’s biggest steelmaker, is pursuing a bid for United States Steel Corp., adding to a growing list of suitors for the iconic American company, according to people familiar with the matter.
Stelco is seeking to purchase the entire company as it looks to increase its portfolio of steelmaking assets and boost its share of the market for supplying metal to the automotive sector, the people said. Stelco is in talks with a potential partner on its bid, the people said, asking not to be identified because the details are private.
No final decision has been made and Stelco could opt against making a bid, the people said.
Stelco’s interest comes amid Pittsburgh-based U.S. Steel’s review of strategic alternatives, which has coincided with a rebuffed offer from rival Cleveland-Cliffs Inc. The battle for the company could spell the end of what was once the world’s biggest company.
U.S. Steel fell 0.6 per cent to close $31.23 in New York trading Thursday, giving the company a market value of about $7 billion. Stelco fell about 1 per cent to $27.68, giving it a market value of about $1.5 billion.
Stock Markets: Opening Bell
Stocks are cautiously bouncing back after yesterday’s bruising.
The S&P 500 advanced, while still heading toward its worst week since March. Big tech led gains after bearing the brunt of the recent selloff. Apple Inc. rose as its latest iPhones and watches went on sale Friday.
The TSX was up almost 80 points or 0.4 per cent.
Oil rose. The WTI was up 1.5 per cent at US$91 and Brent was near US$94 a barrel.
Apple iPhone 15 goes on sale and the world lines up
Apple Inc.’s latest iPhones and watches went on sale today, a test of whether a new smartphone design and modest smartwatch changes can help return the company to growth.
The devices are going on sale in about 40 countries in its first wave, including Canada. The iPhone 15 Pro and Pro Max models will represent Apple’s biggest sellers throughout the rest of the year — and the ability to both create and fulfill demand for the products will make or break its holiday period.
So far, the new devices have fared well for Apple, based on the initial online sales of the product. New online orders for the highest-end iPhone 15 models won’t arrive for customers until at least mid-November in several countries, while reservations for in-store pickups quickly sold out.
Still, long lines for the iPhone 15 formed in Dubai, Australia and China.
BREAKING Ontario MPP Monte McNaughton leaving government
TORONTO — Ontario Premier Doug Ford says Labour Minister Monte McNaughton is leaving government for the private sector.
McNaughton has been a legislator for Lambton-Kent-Middlesex since 2011.
He has been a key ally to Ford by drumming up support from private sector unions in the construction industry.
The news comes a day after Ford pledged to return protected Greenbelt lands his government had selected to be removed in order to build housing.
Two cabinet ministers resigned in the wake of a pair of scathing reports into the government’s handling of those land swaps.
The Canadian Press
Canadian consumers are slowing down
Canadian consumers appear to be quickly rolling back their spending as the Bank of Canada’s higher interest rates start to bite into more household budgets.
Receipts for retailers dropped 0.3 per cent in August, the first decline since March, according to an advance estimate from Statistics Canada released Friday. That followed a 0.3 per cent increase a month earlier, which missed the median estimate of 0.4 per cent in a Bloomberg survey.
Sales rose in seven of the nine subsectors in July, and were led by increases at food and beverage retailers. Motor vehicle and parts dealers saw the largest decrease that month, and fell for the first time in four months.
Excluding autos, retail sales rose 1 per cent, double the expectations.
In volume terms, retail sales edged down 0.2 per cent in July.
IA Financial shutters institutional group, fires analysts
Quebec-City-based IA Financial Corp. is cutting jobs in its capital markets business, ending its institutional activities — including equity research — amid bumpy markets.
“We are stopping all institutional operations within IA Capital Markets,” spokesperson Pierre Picard said in an email in response to inquiries from Bloomberg News. As a result, the company will eliminate more than a dozen jobs, he said.
IA Financial is making the cuts at a time of sweeping changes in the finance job market. Within Canada, Royal Bank of Canada pushed ahead with a round of layoffs in its capital markets unit, part of broader reductions announced in August. In June, Bank of Montreal’s capital markets division trimmed about 100 positions, or 3.5 per cent of the division’s staff, in response to a weak environment for deals.
Stock markets: Before the opening bell
U.S. stock futures are edging up today after the S&P 500 yesterday lost 1.6 per cent in its worst day since March.
Markets were unnerved by the United States Federal Reserve’s hawkish hold on Wednesday. The Fed kept its key interest rate steady, but indicated another hike could be coming in 2023, and halved its projected cuts in 2024.
Canada’s TSX was swept up in the decline, falling 423.07 points to close at 19,791.62.
What to watch today
Retail sales numbers for Canada are out today. Statistics Canada’s early estimate for the month of July was a rise of 0.4 per cent. How much Canadians are spending and on what can offer clues to how hot or cold the economy is running.
Could Montreal challenge Toronto for business capital?
‘Impossible’ for Alberta to exit with half of CPP assets, official says
Need a refresher on yesterday’s top headlines? Get caught up here.
Additional reporting by The Canadian Press, Associated Press and Bloomberg