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Today’s headlines
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Electric vehicles are piling up at U.S. dealers as inventories hit record high
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The nearly four-month inventory of EVs is up from a 53-day supply a year ago and compares to 71-days worth of inventory for the overall auto industry, researcher Cox Automotive wrote in a blog post.
A coalition of U.S. auto dealers last month wrote to President Joe Biden asking that he “tap the brakes” on EV mandates because the cars are “stacking up on our lots.”
At the end of November, Ford’s electric Mustang Mach-E had among the highest inventory, at a 284-day supply, while the company’s F-150 Lightning had a 111-day supply, Cox reported. The Nissan Leaf had 183 days of supply, while the Kia EV6 had 145 days of supply, according to Cox.
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Cox Automotive’s inventory numbers do not include Tesla Inc. or Rivian Automotive Inc. because those automakers sell directly to consumers, rather than through dealers.
Keith Naughton, Bloomberg
11:10 a.m.
Trans Mountain warns regulator of potential ‘catastrophic’ two-year pipeline delay
Trans Mountain Corp. is nearly finished building the expansion, which will boost the pipeline’s capacity to 890,000 barrels per day from 300,000 bpd currently and improve access to export markets for Canadian oil companies.
But the Crown corporation has run into construction issues in British Columbia and has asked the regulator to allow it to use a different diameter, wall thickness and coating for a 2.3 kilometre section of pipeline.
The regulator denied that request earlier this month.
But Trans Mountain says it now has reason to believe that proceeding with the current construction plan through complex hard rock conditions could compromise a borehole and result in the failure of drilling equipment.
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The company says if that happens, it would result in “catastrophic” delays to the project’s timeline and billions of dollars in losses for Trans Mountain.
The Canadian Press
10:53 a.m.
Rogers Sugar strike at impasse, company says as it pauses talks with union
Workers at the refinery have been on strike since Sept. 28 over issues including wages, benefits and the company’s proposal to increase refinery operations to 24 hours a day, 365 days per year.
The Rogers Sugar refinery in Vancouver is one of only three large sugar refineries in the country that processes imported cane sugar.
The strike has caused intermittent sugar shortages in Western Canada this fall.
But the company says there is currently ample supply of white sugar in the market, and it has restarted production of brown sugar at the Vancouver refinery.
Rogers Sugar has been operating the Vancouver refinery at reduced capacity, and says it has enough raw sugar on site to continue to do so until May 2024.
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The Canadian Press
10:38 a.m.
Costco issues special $15-per-share dividend as earnings beat expectations
It’s the company’s first special dividend since late 2020, when investors got US$10 a share, according to data compiled by Bloomberg. Costco has shown resilience even as other big-box retailers voice caution on the consumer outlook. Walmart Inc., which operates the competing Sam’s Club chain, struck a far more cautious tone when it reported earnings last month.
The shares rose as much as 4.1 per cent as of 9:57 a.m. Friday in New York, setting a new all-time high. The stock has been trading near records, up 44 per cent this year and outpacing the S&P 500 Index’s 23 per cent gain.
Costco’s first-quarter earnings were US$3.58 a share, outpacing the average estimate compiled by Bloomberg. The closely watched measure of comparable-store sales rose 3.9 per cent excluding gas prices and currency movements, which also topped expectations.
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The company’s “strong value offering, high renewal rates, and club expansion plans make Costco well-positioned,” Jefferies analysts wrote in a note Friday.
Bloomberg
10:15 a.m.
Markets open: Stock rally cools as March rate-cut euphoria fades
This week’s everything rally lost some of its heat on Friday after New York Fed president John Williams told CNBC it was “premature” to be thinking about a March rate cut. The S&P 500 and Nasdaq 100 are still poised for their seventh consecutive weekly gains after the Fed ignited a speculative frenzy this week when it affirmed it’s ready to shift to rate cuts.
On Wall Street, the S&P 500 was down 0.23 per cent at 4,715.73. The Dow Jones Industrial Average was down 0.22 per cent at 37,164.04, while the tech-heavy Nasdaq composite held onto gains rising 0.49 per cent to 14,832.57.
In Toronto, the S&P/TSX composite index was down 0.55 per cent at 20,663.69 on across-the-board declines with the energy sector falling the most.
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A note of caution from Europe’s central bankers that they’re not ready to follow the Fed’s policy pivot damped some of the excitement. European Central Bank governing council member Madis Muller said Friday that markets are getting ahead of themselves in betting that the ECB will start cutting interest rates in the first half of next year.
Yesterday, ECB president Christine Lagarde said the bank had not discussed rate cuts at all.
“The contrast between the resilient U.S. economy adopting a dovish stance and faltering European economies holding on to a hawkish position gives the impression that something is amiss,” Ipek Ozkardeskaya, a senior analyst at Swissquote, wrote in a note to clients.
Bloomberg
9:30 a.m.
Annual pace of housing starts fell 22% in November: CMHC
The drop came as the annual pace of urban starts fell 23 per cent to 195,363 units, with the rate of multi-unit urban starts down 27 per cent at 151,297. Single-detached urban starts fell seven per cent to 44,066 units.
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The rate of starts in Montreal was down 30 per cent, while Toronto and Vancouver both saw a drop of 39 per cent, driven by significantly lower multi-unit starts.
The annual pace of rural starts for November was an estimated 17,261.
The six-month moving average of the monthly seasonally adjusted annual rate of housing starts in November was 257,777, up 0.7 per cent from 255,876 in October.
The Canadian Press
7:30 a.m.
Stock markets before the opening bell
Equities held gains after the United States Federal Reserve validated bets that it will soon move to easier policy and pushed stock market gauges toward all-time highs.
S&P 500 futures ticked up 0.3 per cent with the underlying gauge poised for its seven consecutive weekly advance. In Europe, the Stoxx 600 index hit its highest level since January 2022, on course for a fifth week of gains.
The S&P/TSX composite index closed up 149.35 points at 20,778.80 on Thursday.
Bloomberg
What to watch today
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Finance Minister Chrystia Freeland hosts the annual meeting of provincial, and territorial finance ministers to discuss shared priorities such as housing, affordability and economic growth.
Canada Mortgage and Housing Corp. will release housing starts numbers for November this morning. Other data releases include October wholesale trade and international securities transactions.
Additional reporting by The Canadian Press, Associated Press and Bloomberg
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