- What to expect in housing report
- Global markets mixed, turning sour
- New York futures down
- Canadian dollar above 74 cents
- Annual inflation at 2 per cent
- Tim Hortons parent to expand
- Required Reading
What to expect in report
Expect to see a stronger showing when the Canadian Real Estate Association releases its morning report on April home sales and prices.
Bank of Montreal projects the reading will show sales up and prices flat, the latter actually ending a string of declines.
“Better weather drove better home sales after a challenging start to the year,” said Benjamin Reitzes, BMO’s Canadian rates and macro strategist.
Mr. Reitzes expects to see that existing home sales rose 3 per cent in April from a year earlier, a turnaround from the slump of 4.6 per cent in March.
He also expects to see that average prices were flat from a year earlier, marking the first time in seven months that there wasn’t a drop. Prices fell 1.8 per cent in March.
Along the same lines, the MLS home price index, which is seen as a better measure, is also expected to be flat, following two consecutive months of declines.
We’ve seen reports from local real estate boards, but this will be a national look for April, with the industry into its spring season.
Regional housing markets, of course, have been different.
“Vancouver and B.C. generally remain weak as prices have further to fall after the multiyear sprint higher,” Mr. Reitzes said.
“However, sales appear to have bottomed (or at least are close to) as they sit near prior cycle lows,” he added.
Elsewhere, “there are signs of life in Calgary and Edmonton, though sales are improving off very weak levels,” Mr. Reitzes said.
We’ve already seen Toronto’s numbers, which showed a market rebound.
“And Montreal remained a strong spot, while Ottawa cooled after a solid run,” Mr. Reitzes said.
“Broadly, the 50-basis-point drop in mortgage rates since the start of the year is providing some support to the market; though given debt levels, don’t expect housing to rebound strongly.”
- Janet McFarland: Toronto home sales surge in April, climb near 17 per cent from last year’s sluggish level
- Brent Jang: Vancouver home sales slump to 24-year low as prices continue to fall
- A ‘foul mood’ in Vancouver, a ‘floor’ in Toronto, a ‘new normal’ in Ottawa: The state of Canadian housing
- Barrie McKenna, Janet McFarland: Bank of Canada urges lenders to offer longer-term mortgages
Global markets are mixed so far, and turning sour, at that.
“The fears over the possibility of a substantial reversal of trade war progress has added a substantial amount of volatility to markets, yet, as the past 24-hours have shown, markets still exhibit hope that we could see some form of resolution emerge from this current standoff,” said IG senior market analyst Joshua Mahony.
Tokyo’s Nikkei gained 0.6 per cent, Hong Kong’s Hang Seng 0.5 per cent, and the Shanghai Composite 1.9 per cent.
But things are a little less certain in Europe, where London’s FTSE 100, Germany’s DAX and the Paris CAC 40 down by between 0.1 and 0.8 per cent by about 8:05 a.m. ET.
New York futures were down.
“The euro zone has been in focus this morning, with GDP figures from both the German and euro zone economy for the first quarter,” Mr. Mahony said.
“We have seen few surprises in today’s figures, with quarterly German and euro zone GDP figures coming in at 0.4 per cent as expected,” he added.
“However, the big difference comes when looking at the year-on-year figures, with the German figure of 0.6 per cent standing well down the pecking order in comparison to their European peers. As the trade war continues to roll on, the story of German economic weakness looks likely to continue alongside it.”
The Canadian dollar was above 74 US cents.
Inflation ticks up
Annual inflation in Canada ticked up to 2 per cent in April as prices at the pump eased from a year earlier.
But on a monthly basis, pump prices shot up 10 per cent from March “as refineries switched to summer-blend fuels, global oil prices continued to rise due to production cuts, and carbon levies were introduced or increased in six provinces,” Statistics Canada said.
That 2 per cent, up from 1.9 per cent in March, is right at the Bank of Canada’s target.
If you strip out gasoline, annual inflation would be 2.3 per cent.
“Ex-gasoline inflation is at 2.3 per cent, underscoring our view that in upcoming quarters we're likely to see a period in which inflation runs above 2 per cent for a while when we move past year-on-year declines in pump prices,” said CIBC World Markets chief economist Avery Shenfeld.
“Recent seasonally adjusted monthly data are showing a bit of momentum, but a lot of that is gasoline, so we don’t see a material threat to inflation running within the Bank of Canada’s tolerance for divergences from the 2-per-cent target.”
RBI to expand
From Reuters: Restaurant Brands International Inc. plans to expand all three of its brands to more than 40,000 restaurants globally in the next eight to 10 years, making it one of the largest restaurant companies in the world.
China numbers weaker
From Reuters: China reported surprisingly weaker growth in retail sales and industrial output for April, adding pressure on Beijing to roll out more stimulus as the trade war with the United States escalates.
WeWork raises $1-billion
WeWork is expanding into property acquisition and management, raising US$1-billion from Canada’s Ivanhoé Cambridge to buy real estate in major cities around the world. Rachelle Younglai reports.
The Desmarais family’s Power Corp. of Canada is facing increasing shareholder dissatisfaction with its governance, with a large minority of public shareholders voting against reappointing co-CEOs Paul Desmarais Jr. and André Desmarais to the board. Institutional investment reporter David Milstead reports.
Shaw unloads Corus stake
Shaw Communications Inc. is unloading its 38.6-per-cent stake in Corus Entertainment Inc. in a $548-million share sale, after struggling to sell the position to a single buyer last year, Tim Kiladze and Andrew Willis write.
WestJet Airlines Ltd. is taking steps to assure its 14,000 employees their jobs are safe in a $3.5-billion takeover by private equity investor Onex Corp., Eric Atkins and Jeffrey Jones write. But there are questions about the employees’ profit-sharing and stock plans, which the airline has long said is key to its ownership culture.