For those of you who would like to take advantage of our Luck O' the Irish SALE but prefer not to make payments online, you are welcome to send us a check or money order in the amount of $114.12 for a 3-year AD-FREE Premium Service Bundle or $190.20 for a 5-year Bundle. Make checks or money orders payable in US funds to "Investor Village" and send to: Investor Village, P.O. Box 2958, Marrero, LA 70073.
As many of you know, we operate on the honor system around here. So, in closing out our Luck O' the Irish SALE, we wanted to advise those of you who plan to pay by check or money order that you can send a PM to Admin informing us of your intention. We will then upgrade your account for 7 days, allowing you to enjoy our ad-free premium service now and giving you a reasonable amount of time to get your payment in.
This is a semi-private group. You are free to browse messages, but you must be a member of this group to post messages. Join This Group
Group: Canadian Blue-chip Industrial Forum
/ Message Board / Read Message
Futures are down this morning as investors brace for another supersized rate hike from the Fed. The FOMC kicks off its September meeting today, where central bankers are expected to announce a 75-bps rate hike tomorrow. Equities pushed higher in the final hour of trading yesterday, with a rally in megacaps driving the rebound that followed the worst weekly rout since mid-June. In economic news, Canadian CPI eased for a second month in August on lower gasoline prices. Prices rose 7% from a year ago, down from 7.6% in July and a four-decade high of 8.1% in June. Economists expected a reading of 7.3%, so today’s reading is a welcome development that may give the BoC confidence its interest rate hikes are working.
First it was the 1-year on Friday, now the 2-year U.S. Treasury yield is about to break above 4% as the FOMC starts its two-day meeting. The 2-year yield hit 3.99%, the highest since 2007, and is heading for its largest annual increase since 1994. Yields on the shorter end of the curve have shot up after stronger-than-expected U.S. inflation data last week dashed speculation that cost pressures had peaked, increasing the probability of a jumbo hike by the Fed tomorrow.
The Canadian government is getting tougher in its fight against tax avoidance, with corporations facing new reporting mandates and costs. The changes include tightening more than a dozen anti-avoidance laws, expanding the amount of information companies must report, and putting more resources into tax collection. Many factors have prompted the changes, including new international norms, a string of major court losses for the government, and growing political pressure to take on companies that use aggressive strategies to reduce their taxes. Big businesses are not thrilled about the changes, with many corporations already facing tax fatigue from previous changes to the tax code.
The pandemic provided many Canadians the opportunity to rethink their financial goals, with people deciding to move, switch careers, and travel. A recent survey found that 67% of Canadians are re-evaluating their priorities as restrictions ease, with many surveyed reporting that they already have made significant life decisions during the pandemic. Looking ahead, more than one-third of Canadians say they are planning to travel within the next 12 months and 13% say they are planning for a large purchase.
Harsh weather takes its toll. Hurricane Fiona hit Puerto Rico, causing the entire electric grid to fail. Power is now being restored to the island’s 3.1 million residents, with priority given to hospitals and critical infrastructure. Fiona’s top winds rose to 145 kilometers per hour, causing damage estimated at $2 billion. In Japan, typhoon Nanmadol has brought rain and winds that have triggered floods, landslides, forced the evacuation of millions, and have left hundreds of thousands without power in parts of Japan.
For anyone obsessed with true crime Podcasts, yesterday a judge vacated the murder conviction of Adnan Syed. The release comes years after the hit podcast ‘Serial’ chronicled his case and cast doubt on his role in the 1999 murder of former girlfriend Hae Min Lee. Prosecutors made a compelling argument that Syed’s conviction was flawed and has ordered him released without bail. The judge said the state must now decide whether to seek a new trial date or dismiss the case within 30 days.
Peloton Interactive is trying to fix their revenue issues from a different angle and is launching its long-awaited $3,195 rowing machine. The company will start taking orders today and begin deliveries to U.S. customers in December. The rowing machine is the first major new piece of exercise equipment since 2020, when it debuted a cheaper version of its treadmill. Make sense to us, being in a multi-person boat would be very similar to riding in a peloton.
Kinross Gold announced a new, enhanced share buyback program. The Company’s Board of Directors and management believe Kinross’ shares offer the best return available on shareholders’ capital and therefore have decided to allocate a more substantial portion of cash available to share buybacks to enhance per-share metrics and improve shareholder returns.
Ford Motor Co. said inflation is pushing supplier costs $1 billion higher than expected in the current quarter, joining other major corporations warning about macro challenges to the global economy. The automaker expects to report a decline in earnings next month, which has pushed its shares down as much as 4.8% to $14.21 in pre-market trading this morning. The stock has already declined 28% this year through yesterday’s close.
A disproportionate number of the nearly 1 million Canadians who identify as Muslim have been shut out of the real-estate market as their faith prohibits them from paying or receiving interest. This has limited their access to conventional mortgages, but a new Alberta-based startup is aiming to change that. Canadian Halal Financial Corp was able to receive two fatwas (a form of religious edict) permitting it to create a mortgage product meeting both provincial and Islamic laws. The company offers a form of financing that requires a minimum 25% down payment, regular payments until the home is paid for, and a fee charged in addition to the price of the home that is not interest based.
Commodities
Wheat prices are lower as exporter competition for market share intensified and worries escalated about an economic slowdown hurting grain demand. Last week was the first weekly decline since mid-August. A strong US dollar is also not helping and curbing the appeal of American grain exports, making its supply more expensive on the global stage. Russian prices have become relatively cheaper as the nation harvests a record crop, which might help it to accelerate sales after a sluggish start. However, financial and logistics challenges remain due to its invasion of Ukraine.
Oil prices ticked up this morning as OPEC and its allies keep producing less than their quotas. Still, oil prices are heading for a fourth monthly decline. Crude has lost about a third of its value since early June, erasing all the gains made in the wake of Russia’s invasion of Ukraine, as concerns about a global slowdown weigh on demand. Liquidity also thinned, leading to volatile price swings, while a stronger U.S. dollar has added to headwinds.
Fixed income and economics
USD denominated fixed income primary issuance is at a lull this past week and month with issuers sitting on the sidelines waiting for more clarity from the Federal Reserve’s future outlook. The Fed is widely forecast to lift its key rate by 75 basis points tomorrow to combat soaring inflation, but much of the focus will be on what Fed Chair Jerome Powell signals for the coming months. That’s resulted in both municipal and corporate entities pausing debt sales as they seek to avoid potential volatility at a time when yields are already approaching the highest level in years. According to Bloomberg, just $1.7 billion of long-term muni paper is poised to hit the market this week which is approximately 80% below the 2022 average. Exacerbating the pullback is that issuers seem reluctant to commit to sales going forward as scheduled supply in the district calendar for the next 30 days is tabled for $4.9 billion, the least since the first week of January. Perhaps the lack of issuance will help balance the demand side of the equation and help support a space that has lost more than -10% this year and waned on revenue streams for many smaller American counties and towns. Bond sales are stalling in the U.S. investment-grade primary market as well, with no high grade bond offerings priced yesterday and just a handful on tap for today (markets in Japan and the U.K. were closed because of national holidays that likely weighed in this result). and long-term Treasury yields hitting new multi-year highs.
Chart of the day
Markets
Quote of the day
Freedom consists not in doing what we like, but in having the right to do what we ought. Pope John Paul II