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S&P 500 falls 19.4% in 2022, worst year since 2008 financial crisis

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Stocks closed lower across the board on Friday to finish off the worst year for the U.S. stock market since the financial crisis.

When the year’s final closing bell rang on Friday, the S&P 500 and Dow were each off about 0.2%, while the tech-heavy Nasdaq fell a more modest 0.1%.

With Friday’s losses, the S&P 500 fell 19.4% in 2022, its largest calendar-year decline since a 38% drop in 2008. Closing at 3,839.50 on Friday, the S&P 500 now stands at the same level as March 2021.

The Nasdaq Composite dropped 33% and stands at the same level as July 2020.

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The Dow, meanwhile, fell a comparably modest 9% in 2022, while the bond market suffered through its worst year in modern history.

The yield on the 10-year Treasury rose from around 1.5% at the beginning of 2022 to settle at 3.88% on Friday. This move triggered a sell-off across fixed income markets and weighed on housing, with the average 30-year fixed mortgage rate finishing 2022 near 6.4%, its highest year-end level since 2001.

Tesla (TSLA) shares rose 1.1% on Friday, a move that followed the stock gaining some 8% on Thursday in a bid to recover sharp losses suffered this year and this month. Tesla shares lost over 65% this year and more than 30% in December.

WTI crude oil gained more than 2.5% on Friday, finishing 2022 at $80.40 per barrel and giving oil its second-straight annual gain. Though after the price of crude oil surged more than 50% in 2021 and then doubled early this year, WTI finished with a more modest 7% for the year.

The modest gain in oil prices, however, belies the strength seen by energy stocks in 2022, with the energy sector (XLE) rising some 57% this year, the only one of the 11 sectors in the S&P 500 to log gains this year.

The Federal Reserve’s aggressive rate hike campaign in 2022 weighed particularly heavy on technology stocks. The technology sector (XLK) fell 28% this year, its biggest drop since 2008, while communication services (XLC) — which was added to the S&P 500 in 2018 — logged its biggest drop on record, falling 38% in 2022, the most of any sector in the S&P 500.

In currency markets, the dollar was weaker on Friday but logged its biggest annual gain since 2015 as interest rate increases from the Federal Reserve boosted demand for the greenback.

Crypto markets also endured a challenging 2022, as bitcoin (BTC-USD) is set to finish the year down 65%. The price of bitcoin was little-changed on Friday to trade near $16,500.

 

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Big banks raise prime lending rates to 6.7% after Bank of Canada hike

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Canada’s six biggest banks raised their prime lending rates following an eighth consecutive increase to the Bank of Canada’s benchmark interest rate.

The central bank’s target for the overnight rate now sits at 4.5 per cent following a quarter-point hike on Wednesday.

The central bank’s policy rate sets borrowing rates for other lending institutions, which feeds into terms for Canadian consumer loans like mortgages.

After Wednesday’s decision, TD Bank, Scotiabank, BMO, RBC, CIBC and National Bank all raised their prime lending rate by 25 basis points to 6.7 per cent.

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This marks the highest point for the prime lending rate in Canada since 2001, according to data from RateSpy.com.

Believing inflation is set to “decline significantly,” the Bank of Canada signalled Wednesday that it was ready for a pause after 425 basis points of hikes to its policy rate.

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Home Depot investigation: Data shared without consent

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OTTAWA –

Retailer Home Depot shared details from electronic receipts with Meta, which operates the Facebook social media platform, without the knowledge or consent of customers, the federal privacy watchdog has found.

In a report released Thursday, privacy commissioner Philippe Dufresne said the data included encoded email addresses and in-store purchase information.

The commissioner’s investigation discovered that the information sent to Meta was used to see whether a customer had a Facebook account.

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If they did have an account, Meta compared what the customer bought at Home Depot to advertisements sent over the platform to measure and report on the effectiveness of the ads.

Meta was also able to use the customer information for its own business purposes, including user profiling and targeted advertising, unrelated to Home Depot, the commissioner found.

It is unlikely that Home Depot customers would have expected their personal information to be shared with a social media platform simply because they opted for an electronic receipt, Dufresne said in a statement.

He reminded companies that they must obtain valid consent at the point of sale to engage in this type of activity.

“As businesses increasingly look to deliver services electronically, they must carefully consider any consequential uses of personal information, which may require additional consent.”

Home Depot told the privacy commissioner it relied on implied consent and that its privacy statement, available through its website and in print upon request at retail outlets, adequately explained the company’s use of information. The retailer also cited Facebook’s privacy statement.

The commissioner rejected Home Depot’s argument, saying the privacy statements were not readily available to customers at the checkout counter, adding shoppers would have no reason to seek them out.

“The explanations provided in its policies were ultimately insufficient to support meaningful consent,” Dufresne said.

He recommended that Home Depot stop disclosing the personal information of customers who request an electronic receipt to Meta until it is able to put in place measures to ensure valid consent.

Home Depot fully co-operated with the investigation, agreed to implement the recommendations and stopped sharing customer information with Meta in October, the commissioner said.

This report by The Canadian Press was first published Jan. 26, 2023.

 

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Meta funds a limited number of fellowships that support emerging journalists at The Canadian Press.

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Rent increased more than 18% last year for new tenants, new numbers show – CBC News

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A surge in demand pushed Canada’s rental market to its tightest level in two decades last year, with the vacancy rate in purpose-built apartments dipping below two per cent and rent for new tenants going up by 18 per cent.

Those were some of the main takeaways from the Canada Mortgage and Housing Corporation’s annual report on the state of Canada’s rental market.

The figures cited above were for purpose-built rental apartments, so they don’t include what’s happening in condos, or in apartments built out of occupied family homes.

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For purpose-built rentals, the national vacancy rate fell to 1.9 per cent last year, its lowest level since 2001. 

Booming demand for apartments pushed up the price to get one, too, with the average rent hitting $1,258 a month. That was up by 5.6 per cent from the previous year’s level, and roughly twice the annual average seen for the past 30 years.

But rent didn’t go up at the same pace for every unit.

Apartments where there was a change in tenants saw the rent go up by 18.9 per cent. Those where there was no change in tenancy saw rents go up by only 2.9 per cent, on average. “This reflects the fact that, once a tenant vacates a unit, landlords are generally free to increase asking rents to current market levels,” the CMHC said.

That gap was even more stark in two of Canada’s biggest cities, Toronto and Vancouver, where average rents for a unit that saw a tenant change went up by 29 and 24 per cent, respectively.

Geordie Dent, the executive director of the Federation of Metro Tenants Association, has spent more than a decade as a watchdog for the rental market in Toronto. He says the situation is as dire as he’s ever seen, with a surge in so-called “renovictions,” where landlords are eager to take advantage of higher market rents by evicting tenants and raising rents to someone new

“There’s an incentive for them to try to illegally evict people and raise the rent,” he told CBC News in an interview. He says he hears stories every day of people staying in unsuitable housing situations because of desperation. “They’re afraid that if they get kicked out of their current place for a new one, rent’s going to be like $1,000 higher.”

WATCH | ‘Renovictions’ becoming common, tenant advocate says: 

Toronto tenant advocate says market is dire

6 hours ago

Duration 6:07

Geordie Dent, the executive director of the Federation of Metro Tenants’ Association, says the situation in Toronto’s rental market is the worst he’s ever seen.

Things aren’t much better across the country in Vancouver, either. The vacancy rate fell to just 0.9 per cent, with the average price for a two-bedroom hitting $2,002 a month. That’s up by 5.7 per cent from last year, but it’s up by 24 per cent among units that have seen a tenancy change.

Some of those in the lower mainland’s rental market fear the system is irreparably broken.

Vinny Cid was working and living in Victoria, but when his job allowed him to work remotely in 2021, he made the decision to move home with his parents. 

He, his sibling and his two parents share a rental home in Richmond, B.C. for $2,800 a month which suits their needs, but he says they are only able to get that because his parents have lived in the unit since 2016.

“The rental situation has devolved quickly,” he told CBC News in an interview Thursday. “I check rental listings almost daily, and something similar today would cost $4,000 or more.”

“It’s depressing to see how prices have spiraled out of control very quickly,” he said.

While his situation works for him for now, should his employment or needs change, he suspects he would have to leave the province, or even the country. And he says he worries for those who don’t have the income and family support he has.

“Everybody is being told to either improvise or get pushed out,” he said. “In terms of outlook, it doesn’t look good.”

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