Bloomberg Surveillance for Tuesday, December 6, 2022
Home prices in Canada’s largest city are slowing their slide as more potential sellers sit on the sidelines. Toronto home prices fell for the eighth-straight month in November, albeit by just 0.8 per cent – the smallest decline since prices began to drop in April. That said – the benchmark price is still $1.09 million, somewhat out of reach for many buyers. Now, if we switch over to year-over-year data – dicey as that is, given the frenzied activity we saw in 2021 – there’s some signs would-be sellers just aren’t willing to settle for lower prices. Some 4,544 homes were sold in November, down 49 per cent from a year ago. New listings also declined on both a year-over-year and sequential basis – though as always, there’s some pronounced seasonality to the domestic real estate market, which tends to slow down into the winter months.
MARKETS STABILIZE AFTER PAINFUL MONDAY SESSION
We’re seeing some signs of stability after yesterday’s stock market rout, with futures pointing to a muted open when the bells ring at 9:30 a.m. EST. Essentially, investors seem to be weighing a few key factors as we head into the year – the resiliency of the American economy, how sticky inflation proves to be in the face of continued rate increases, and the easing of COVID-zero measures in China. All that said, the S&P 500 remains on course for its biggest fourth-quarter gain since 1999 in spite of three consecutive sessions of losses (most notably yesterday’s 1.79 per cent decline).
CANADA’S $2.36-TRILLION DEBT BINGE
A new report from Equifax Canada says consumers haven’t yet been driven away from the debt trough. Equifax says total consumer debt rose 7.3 per cent in the third quarter to hit $2.36-trillion (yes, with a “T”) as credit card demand has risen “aggressively” as consumers exit the worst ravages of the pandemic. If we flick back at the housing story, the pace of mortgage debt growth did slow in the quarter, due to the drop in new mortgage originations, which Equifax says dropped below pre-pandemic levels for the first time in the third quarter.
CENOVUS UNVEILS SPENDING PLAN
Cenovus Energy is opening its wallet to the tune of as much as $4.5 billion this year, a significant increase from the top end of its 2022 range of $3 billion. The plan calls for as much as $1.7 billion of spending on optimization and growth, including the construction of the West White Rose project off the coast of Newfoundland. Overall, Cenovus expects total upstream production to come in between 800,000-840,000 barrels per day, which would be an increase of three per cent from this year. And with all that, what a great day for our own Tara Weber to have booked Cenovus CEO Alex Pourbaix for an interview at 11 a.m. EST.
OTHER NOTABLE STORIES
- The Wall Street Journal is reporting PepsiCo is cutting hundreds of jobs from its North American snack and beverage units. Our Paige Ellis is on the hunt for confirmation and how this impacts any Canadian operations.
- There are some more signs of pressure in the forestry industry, with Canfor announcing a temporary curtailment of about 150 million board feet in December and January at its Canadian facilities, citing “very weak” market conditions.
- WSP Global is buying Swiss-based BG Consulting Engineers as it expands its footprint in central Europe. Terms of the deal were not disclosed.
- Microsoft is offering rival Sony a 10-year access deal to Activision’s popular Call of Duty franchise as it looks to grease the wheels on getting its US$69-billion deal for the videogame maker through regulatory approvals.
- Notable data: : Merchandise Trade Balance, Ivey PMI, US Goods & Services Trade Balance, US Global Supply Chain Pressure Index, TREBB releases November Toronto price data
- Notable earnings: Evertz Technologies, Casey’s General Stores, Toll Brothers, Dave & Buster’s Entertainment, Smith & Wesson Brands