Here are five things you need to know this morning:
About that slowdown: We just got a read of retail sales in Canada that certainly does not paint a picture of a restrained consumer. Retail sales for the month of September advanced 0.6 per cent. Economists were expecting no growth at all. However, much of this was driven by autos. The advance reading for October is even more eye-popping. Sales rose 0.8 per cent, which is the biggest jump since April. Weirdly, e-commerce sales were actually down in the month of September. Perhaps this foreshadows a better-than-expected holiday spending season. Nevertheless, this looks like a robust dataset and interesting considering this week we had Bank Of Canada Governor Tiff Macklem declare that excess demand in the economy was gone and rates are likely restrictive enough to get inflation back down to two per cent. We will test his thesis against today’s data with our guests today.
Half-day: U.S. markets are back in action but only for half a day, so expect trading to be light on both sides of the border. Another central bank has also confirmed it is on pause. ECB President Christine Lagarde said the ECB is now at a point where it can pause, after a final reading of Germany’s economic growth in the third quarter confirmed a contraction. But as central banks around the world hold rates in place, investors are literally flocking to equities. Bank of America points out that global stock fund inflows in the past few weeks has topped US$40 billion, the most in almost two years.
Glass half empty: Shares of Nvidia are lower in the pre-market, continuing its weakness following a blockbuster set of quarterly results Tuesday afternoon. Recall, the company warned that China sales would decline. Today there is a report by Reuters that Nvidia is telling its Chinese customers they are delaying the launch of their new AI chip until next year. The stock is on track for losses three sessions in a row, but keep in mind, that is still but a blip on a rally of more than 230 per cent so far this year.
Deal mode activated: Shares of iRobot are surging as it looks like Amazon has cleared a big hurdle in buying the robot vacuum maker. Reuters is reporting that Amazon is set to win unconditional EU antitrust approval for the deal. Amazon announced this deal in August 2022 for US$51.75 per share. Due to concerns about regulatory approval, the stock has been trading well below the offer price, closing yesterday below $30 per share. Official word of approval isn’t supposed to come until Feb. 14, 2024, so it’s worth noting that investors are still not taking shares up to the deal price even with a rally of 30 per cent in the pre-market.
Black Friday: Many of us will be perusing for deals while still definitely working and being productive. Black Friday is the unofficial start to the holiday shopping season, perhaps just as sacred as Thanksgiving itself. The National Retail Federation predicts 182 million Americans are planning to shop in-store and online between Black Friday and its digital cousin Cyber Monday. That is the highest projection since 2017. It is a litmus test for the holiday season. I’ll watch for data from Shopify, which has a lot at stake. “I don’t sleep for that five-day period,” Shopify president Harley Finkelstein told The Canadian Press in an interview. Their data show that Canadians are amongst the biggest spenders this weekend, second only to the U.S. when it comes to spending intensions.