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Briefing highlights

  • Burned out, bummed out?
  • Schwab eyes TD Ameritrade: report
  • Stocks, Canadian dollar, oil at a glance
  • OECD paints subdued picture
  • Share sales no bonanza for banks
  • What analysts are saying today
  • Required Reading

Burnout

If you’re feeling burned out and bummed out, it’s not just you.

First, according to the Conference Board of Canada, confidence among consumers and businesses is ebbing. That’s the bummed-out part.

On top of that, said standards organization CSA Group in a report, many Canadians are feeling burned out, facing “unprecedented levels of workplace fatigue due to a combination of modern day work, societal and personal pressures that may include high physical or mental workloads, long work hours, circadian disruptions from work schedule, and inadequate restorative sleep.”

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The Conference Board’s latest look at consumer confidence showed its index declining in October to its lowest since the end of last year.

“Growing negativity among respondents about how their finances have changed in the past six months drove the decline,” the group said, noting how this could hit the broader economy as “respondents also showed less willingness to make major purchases.”

Source: The Conference Board of Canada

That consumer confidence measure was released a while ago. The Conference Board’s latest, on business confidence, showed that, too, is in a “long slump” still.

“Business sentiment declined steeply in 2018 and has been languishing at a low level throughout this year,” the group said this week.

“While businesses were a bit more pessimistic this quarter, the key takeaway is that business confidence has been in a prolonged slump that shows no signs of clearing.”

Businesses are looking at “some real challenges,” including the fact that the new trade deal with the United States and Mexico hasn’t been approved yet, though the Americans say they’re close to it.

“Additionally, major U.S. tax cuts passed in 2017 have undercut us and made Canadian business tax rates non-competitive,” the Conference Board said.

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“The lack of trade certainty and the more favourable tax regime in the United States mean that, for businesses able to choose which country to invest in, it is difficult to justify investing in Canada,” it added.

“When businesses face these kinds of headwinds and are cynical about the future, we have traditionally seen less investment in machinery and equipment. This has a lasting impact on potential economic growth.”

The Conference Board survey of business executives, done between mid-August and the end of last month, knocked down the index by 1.5 points to 86 in the third quarter. This index has been “stuck at a depressed level for a year now,” compared with its reading of 100 in late 2017.

Back to the personal side of things, CSA Group said it could help to develop national standards on burnout or revise existing ones.

“Canadian industry sectors and organizations in the early phases of fatigue risk management are faced with challenges associated with raising awareness of the topic, and securing the necessary buy-in,” said authors Mike Harnett of Solaris Fatigue Management and Jason Kumagai of Optimal Fit Inc.

“Minimal requirements for training and education have been established for some industries, along with education content,” they added.

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“However, this has yet to reach all industries and there is a gap in making stakeholders aware of the existing materials.”

The World Health Organization has deemed “burnout” an illness, CSA said, but “without a standard definition of what workplace fatigue means in Canada, it’s difficult to say how pervasive the problem is.”

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Schwab eyes TD Ameritrade: report

Shares of TD Ameritrade surged after reports from CNBC and other news outlets that suggest Charles Schwab is in talks to buy the discount broker.

“A deal between Schwab and TD Ameritrade would consolidate an industry that has been going through massive disruption,” CNBC said.

“In recent months, all of the major brokerages have announced plans to go to zero commissions,” it added.

“Schwab was the first of the major players to make the move, eliminating commissions in early October. Schwab’s competitors, including Fidelity and TD Ameritrade, were quick to follow. Not charging for trades is a boon for consumers, but it has left the brokerages scrambling to find ways to maintain profits.”

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Markets at a glance

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OECD paints subdued picture

The Organization for Economic Co-operation and Development is painting a subdued picture for Canada and the world.

In a new forecast today, the group projected global economic growth at 2.9 per cent for 2019 and 2020.

For Canada, it forecast growth of 1.5 per cent in 2019 and 1.6 per cent in 2020.

“The global outlook is fragile, with increasing signs that the cyclical downturn is becoming entrenched,” the OECD said.

“GDP growth remains weak, with a slowdown in almost all economies this year, and global trade is stagnating,” it added.

“A continued deepening of trade policy tensions since May is taking an increasing toll on confidence and investment, further raising policy uncertainty.”

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The group cited “economic uncertainty” as the biggest issue for businesses across the globe since the beginning of the “trade tensions” between the U.S. and China.

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Ticker

Share sales no bonanza for banks

From Reuters: A late-year rush of giant global share sales led by Alibaba’s US$13-billion Hong Kong listing and Aramco’s US$26-billion initial public offering is failing to deliver an equivalent payday for equities bankers. Filings revealed 17 banks will split up to US$32.3-million for Alibaba Group’s Hong Kong deal. Earlier this week, sources told Reuters that banks working on Saudi Aramco’s IPO would split fees worth 0.35 per cent of the amount raised, meaning at the top of its pricing range, raising US$25.6-billion, fees would reach US$90-million. The numbers pale in comparison to the US$300-million banks made from Alibaba’s own record IPO of US$25-billion in 2014. The record fee payout was the US$550-million banks earned for the US$19.6-billion IPO of Visa in New York in 2008.

Fiat Chrysler to recall SUVs

From Reuters: Fiat Chrysler Automobiles NV said it will recall nearly 700,000 sport utility vehicles worldwide because a faulty electrical connection could prevent engine starts or contribute to a stall. The recall, covering 2011 through 2013 model year Dodge Durango and Jeep Grand Cherokee SUVs, will address silicon deposits on the contact points of fuel pump relays that may interrupt electrical current, Fiat Chrysler said in a statement. It said it is unaware of any injuries or accidents related to the faulty vehicles.

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What analysts are saying today

“The main feature of bond markets is that the rally remains pretty much intact. The main feature of equities is that dip-buyers are only quiet for so long, but the main feature of the [foreign exchange] market continues to be the lack of volatility and the small scale of moves in response to yo-yoing risk sentiment.” Kit Juckes, global fixed income strategist, Société Générale

“Expectations of a phase one trade deal [between the U.S. and China] are growing dimmer by the day. Comments from the Chinese have played to both sides of the case for a phase one … being done, but traders have a glass half-empty attitude for now. On the one hand Chinese Premier Li sounded upbeat about the prospects of a deal but a strong warning from Chinese officials directed at Donald Trump not to sign off on U.S. legalization to support Hong Kong protests risks talks falling apart altogether.” Jasper Lawler, head of research, London Capital Group

“With a presidential election still almost a year away, President Trump is likely to want to keep this particular pot simmering so to speak without getting any worse, for quite a while longer. The unrest in Hong Kong may well give the U.S. president the perfect opportunity to do that if he signs the legislation passed by Congress supporting the Hong Kong protestors. The surprising cross-party support amongst all U.S. politicians in standing behind the Hong Kong protestors adds a significant complication to the prospect of any U.S, China deal, given its insistence for annual reviews on Hong Kong’s special trade status under U.S. law.” Michael Hewson, chief analyst, CMC Markets

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Required Reading

Canada a ‘haven,’ report says

Canada’s equity markets have become a “haven” for aggressive short-sellers because of the hands-off approach taken by the market regulator, a newly released research paper charges. Greg McArthur reports.

Resist, business groups tell Morneau

Canada’s business community is urging Bill Morneau – who continues as Finance Minister following Wednesday’s reveal of the new federal cabinet – to resist demands for new spending in the minority Parliament, Bill Curry writes.

Rail strike to bite

As the Canadian National Railway Co. strike entered its second full day Wednesday, market analysts said they expect the labour action to affect oil prices sooner rather than later. Emma Graney reports.

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