First Look With Surveillance: China Growth, Supply Shocks
China’s economy fell victim in the third quarter to domestic forces and the same global macro challenges that we’re talking about every day. Output rose 4.9 per cent year-over-year in the period, compared to the second-quarter growth spurt of 7.9 per cent. Other than consumption, the underlying factors were weak as industrial production and fixed-asset investment expanded less than anticipated. And in a sign of apprehension in the property market amid China Evergrande Group’s debt woes, home sales in China sank 16.9 per cent last month. Nonetheless, the head of the People’s Bank of China said yesterday that his country’s economy is set to outpace the official growth target.
TSX ON A ROLL
The S&P/TSX Composite Index heads into today riding an eight-session winning streak that took it to a record close on Friday even though more than half its components closed lower on the day. Worth pointing out here that West Texas Intermediate crude hit another seven-year high this morning as it traded close to US$84 per barrel. Meanwhile, U.K. natural gas futures shot up as much as 15.6 per cent after the Bloomberg terminal pumped out a headline about Russia limiting the supply of natural gas to Europe next month.
POT SECTOR GROWING PAINS
Sebastien St-Louis is out as chief executive of Hexo. It’s an abrupt move, without a successor in place. No specific reason for his departure was stated. Naturally, Dave is looking into this and will put it in the context of a broader reset facing the industry.
BIG WEEK FOR BANK OF CANADA
The central bank is getting a slew of important inputs ahead of its rate decision next week. It starts this morning with a new Business Outlook Survey, which will shed new light on inflation and employment pressures. Later this week, we’ll get the consumer price index and retail sales updates from Statistics Canada. CIBC Chief Economist Avery Shenfeld told clients in a report Friday that the Bank is likely going to push out the timeline for closing the output gap, which by consequence would likely mean a longer wait for rates to rise.
BITCOIN INCHES TOWARD RECORD
The world’s best known cryptocurrency came within approximately US$2,000 of its all-time high this morning as anticipation builds for the launch of futures-based exchange-traded funds in the United States. Investors are on high alert after ProShares confirmed this morning that its Bitcoin Strategy ETF will start trading on the New York Stock Exchange tomorrow. We all know the U.S. is playing catch up with Canada on this; it’s fortuitous for us to have Greg Taylor from Purpose Investments – a trailblazer in this space – on The Street this morning.
OTHER NOTABLE STORIES
- TD Bank Group said this morning it’s expecting to record a $271-million boost to its third-quarter adjusted profit from its stake in The Charles Schwab Corp. as a result of the online brokerage’s latest results, which showed a fourth consecutive quarter of 1 million or more new accounts amid the retail trading boom.
- Another reminder of energy-transition challenges: TransAlta Renewables said a turbine at one of its subsidiary’s wind farms in New Brunswick collapsed and as a result the company has taken two sites offline.
- Noront Resources has changed allegiance in the hottest takeover going in the Ring of Fire, as the miner today said it has firmed up an agreement to be acquired by Wyloo Metals for $0.70 per share. BHP has five days to match.
- TCI Fund Management released a detailed pitch to investors on its ambition to overhaul CN Rail, starting by bringing in four new directors. We’re parsing through the 102-slide deck for new intel.
- Notable data: Canadian housing starts and international securities transactions; China GDP, retail sales, industrial production, and fixed-asset investment
- 10:30: Bank of Canada releases Business Outlook Survey
- 11:40: Bank of Canada Deputy Governor participates in DC Fintech Week panel "Harnessing innovation for the public interest"
- 13:00: Apple holds product launch event in Cupertino, Calif.
- 13:15: Ontario Premier Doug Ford and Deputy Premier/Health Minister Christine Elliott make announcement in Tecumseh, Ont.
- Alberta referendums on equalization and daylight savings