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Today’s headlines
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Inflation stalls at 3.1% in November, above Bank of Canada target
The consumer price index report shows progress on easing inflation stalled as higher prices for recreation and clothing put upward pressure on headline inflation. Economists had expected the rate of inflation to come in between one and three per cent.
The inflation rate was 3.1 per cent in October.
Excluding volatile food and energy readings, the consumer price index increased 3.5 per cent in November, after rising 3.4 per cent in October.
Mortgage interest costs rose 29.8 per cent and grocery prices were up 4.7 per cent from a year ago, marking a slowdown from 5.4 per cent in October. Rent increased 7.4 per cent.
Prices for services were unchanged last month, rising 4.6 per cent year over year, as higher prices for travel tours were offset by lower prices for cell phone services.
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Forecasters expect the central bank’s next move will be to cut interest rates once it feels more confident that inflation is heading back to two per cent.
Financial Post, The Canadian Press, Bloomberg
9:45 a.m.
Wall Street hovers near records on rate cut hopes
North American stock markets are drifting near record highs as investors wagered the United States Federal Reserve is on track to engineer a soft landing and start cutting rates.
The S&P 500 was up 0.2 per cent early Tuesday, just one per cent shy of its record set a little bit less than two years ago. The Dow edged up 54 points. The Nasdaq composite was up 0.3 per cent.
The S&P/TSX composite index rose 0.71 per cent.
Markets abroad were mixed, except for Japan. The Nikkei 225 jumped 1.4 per cent after the country’s central bank decided to keep its benchmark rate below zero in hopes of encouraging more borrowing and spending.
The Associated Press, Bloomberg
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9 a.m.
Canada’s population growth hits record in Q3, expands by more than 430,000
Statistics Canada released its population estimates as of Oct. 1, which shows Canada’s population topped 40.5 million.
The country’s total population growth over the first nine months of the year has already surpassed the total growth in any other full year, including the record set in 2022.
The record-high population growth has been fuelled by international migration, with an increase in non-permanent residents making up most of this increase.
The report shows the number of non-permanent residents increased by about 313,000 over the three-month period.
The increase in non-permanent residents was driven by work and study permit holders, and to a lesser extent, refugee claimants, Statistics Canada said.
The Canadian Press
7:30 a.m.
S&P raises Alberta’s credit rating on strong oil price outlook
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The oil-rich province’s credit rating was lifted to AA-, the fourth-highest available, from A+, S&P said in a note Dec. 18. The outlook on the rating was “stable,” the firm said.
Alberta is benefiting from strong oil prices with bitumen royalties expected to be about $1.8 billion more than initially expected in the current fiscal year, according to a recent budget update. That helped swell the provincial government’s projected fiscal surplus to C$5.5 billion.
“We expect that Alberta will be able to carry this momentum into the next two years as it continues to produce after-capital surpluses,” S&P said.
Those surpluses should limit Alberta’s debt burden to about 127% of operating revenue, helping the province fully service its debt with internal liquidity, the credit rating firm said. Risks to the forecast include recession, a “significant” drop in oil prices, unexpected shifts in policies or ineffective financial management, according to S&P.
The ratings firm also said that it could raise Alberta’s ratings in the next two years if the province could “meaningfully diversify its economy and decrease its dependence on resource revenues,” though it deemed it unlikely.
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Kevin Orland, Bloomberg
Stock markets before the opening bell
Europe’s Stoxx 600 equity index gained 0.3 per cent while United States futures were little changed after the Nasdaq 100 hit a record high Monday for the second consecutive session.
In Canada, the S&P/TSX composite index closed up 93.56 points at 20,622.71.
Bloomberg
What to watch today
Inflation data for November is out this morning with the release of the conumser price index for November from Statistics Canada. Also on tap are industrial product and raw material prices indices and U.S. housing starts and building permits for November.
Environment Minister Steven Guilbeault will outline the details of his plan to eventually phase out the sale of gas-powered vehicles in Canada.
FedEx Corp., Accenture PLC release earnings.
Additional reporting by The Canadian Press, Associated Press and Bloomberg
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