Business

U.S. stocks climb in volatile Federal Reserve day

Published

2 years ago

September 21, 2022

Stocks saw some wild swings, with traders overwhelmed by the many headlines that followed the Federal Reserve decision and ended up signaling at least one thing: policy will remain aggressively tight — making the odds of a soft landing look increasingly elusive.

The S&P 500 ended near session lows, pushing its slide from a January record to more than 20 per cent. The gauge whipsawed in the aftermath of the Fed announcement, climbing as much as 1.3 per cent at one point. Treasury two-year yields topped 4 per cent, piercing that mark for the first time since 2007. The dollar rallied.

Jerome Powell vowed officials would crush inflation after they raised interest rates by 75 basis points for a third straight time and signaled even more aggressive hikes ahead than investors had expected. Powell said his main message was that officials were “strongly resolved” to bring inflation down to the Fed’s 2 per cent goal and added that “we will keep at it until the job is done.” The phrase invoked the title of former Fed chief Paul Volcker’s memoir “Keeping at It.”

“Jerome Powell almost channeled his inner Paul Volcker today, talking about the forceful and rapid steps the Fed has taken, and is likely to continue taking, as it attempts to stamp out painful inflation pressures and ward off an even worse scenario later down the line,” said Seema Shah, chief global strategist at Principal Global Investors. “With the new rate projections, the Fed is engineering a hard landing — a soft landing is almost out of the question.”

Officials forecast that rates would reach 4.4 per cent by the end of this year and 4.6 per cent in 2023, a more hawkish shift in their so-called dot plot than expected. That implies a fourth-straight 75-basis-point hike could be on the table for the next gathering in November — about a week before the US midterm elections.

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“We do think that markets, and consequently the economy, will become ‘Fed up’ with too much tightening, if growth (and employment) are tangibly slowing alongside of these tighter policy moves,” said Rick Rieder, BlackRock’s chief investment officer of global fixed income.
“Today’s Fed action, combined with ongoing rollercoaster-like market volatility, underscore the unease of investors amid the magnified economic and market uncertainties driven by high inflation, corporate earnings warnings, geopolitical concerns and other factors weighing heavily on both Wall Street and Main Street,” said Greg Bassuk, chief executive officer at AXS Investments.
“They have a brief window to act aggressively, and they seem eager to use it,” said Jan Szilagyi, co-founder of Toggle AI, an investment research firm.
“The first set of Fed releases from the September meeting are unambiguously hawkish,” said Krishna Guha at Evercore. “The macro projections signal increased risk of a harder landing.”
“The Fed was late to recognize inflation, late to start raising interest rates, and late to start unwinding bond purchases,” said Greg McBride, chief financial analyst at Bankrate. “They’ve been playing catch-up ever since. And they’re not done yet.”

Key events this week:

Bank of Japan monetary policy decision, Thursday
The Bank of England interest rate decision, Thursday
US Conference Board leading index, initial jobless claims, Thursday

Here are some of the main moves in markets:

Stocks

The S&P 500 fell 1.7 per cent as of 4 p.m. New York time
The Nasdaq 100 fell 1.8 per cent
The Dow Jones Industrial Average fell 1.7 per cent
The MSCI World index fell 1.5 per cent

Currencies

The Bloomberg Dollar Spot Index rose 0.7 per cent
The euro fell 1.2 per cent to US$0.9847
The British pound fell 0.9 per cent to US$1.1281
The Japanese yen was little changed at 143.88 per dollar

Bonds

The yield on 10-year Treasuries declined six basis points to 3.51 per cent
Germany’s 10-year yield declined three basis points to 1.89 per cent
Britain’s 10-year yield advanced two basis points to 3.31 per cent

Commodities

West Texas Intermediate crude fell 0.7 per cent to US$83.34 a barrel
Gold futures rose 0.6 per cent to US$1,681.40 an ounce

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Business

Carry On Canadian Business. Carry On!

Published

16 hours ago

October 22, 2024

Steven Kaszab

Human Resources Officers must be very busy these days what with the general turnover of employees in our retail and business sectors. It is hard enough to find skilled people let alone potential employees willing to be trained. Then after the training, a few weeks go by then they come to you and ask for a raise. You refuse as there simply is no excess money in the budget and away they fly to wherever they come from, trained but not willing to put in the time to achieve that wanted raise.

I have had potentials come in and we give them a test to see if they do indeed know how to weld, polish or work with wood. 2-10 we hire, and one of those is gone in a week or two. Ask that they want overtime, and their laughter leaving the building is loud and unsettling. Housing starts are doing well but way behind because those trades needed to finish a project simply don’t come to the site, with delay after delay. Some people’s attitudes are just too funny. A recent graduate from a Ivy League university came in for an interview. The position was mid-management potential, but when we told them a three month period was needed and then they would make the big bucks they disappeared as fast as they arrived.

Government agencies are really no help, sending us people unsuited or unwilling to carry out the jobs we offer. Handing money over to staffing firms whose referrals are weak and ineffectual. Perhaps with the Fall and Winter upon us, these folks will have to find work and stop playing on the golf course or cottaging away. Tried to hire new arrivals in Canada but it is truly difficult to find someone who has a real identity card and is approved to live and work here. Who do we hire? Several years ago my father’s firm was rocking and rolling with all sorts of work. It was a summer day when the immigration officers arrived and 30+ employees hit the bricks almost immediately. The investigation that followed had threats of fines thrown at us by the officials. Good thing we kept excellent records, photos and digital copies. We had to prove the illegal documents given to us were as good as the real McCoy.

Restauranteurs, builders, manufacturers, finishers, trades-based firms, and warehousing are all suspect in hiring illegals, yet that becomes secondary as Toronto increases its minimum wage again bringing our payroll up another $120,000. Survival in Canada’s financial and business sectors is questionable for many. Good luck Chuck!. at least your carbon tax refund check should be arriving soon.

Steven Kaszab
Bradford, Ontario
skaszab@yahoo.ca

Business

Imperial to cut prices in NWT community after low river prevented resupply by barges

Published

19 hours ago

October 22, 2024

Anne Joseph

NORMAN WELLS, N.W.T. – Imperial Oil says it will temporarily reduce its fuel prices in a Northwest Territories community that has seen costs skyrocket due to low water on the Mackenzie River forcing the cancellation of the summer barge resupply season.

Imperial says in a Facebook post it will cut the air transportation portion that’s included in its wholesale price in Norman Wells for diesel fuel, or heating oil, from $3.38 per litre to $1.69 per litre, starting Tuesday.

The air transportation increase, it further states, will be implemented over a longer period.

It says Imperial is closely monitoring how much fuel needs to be airlifted to the Norman Wells area to prevent runouts until the winter road season begins and supplies can be replenished.

Gasoline and heating fuel prices approached $5 a litre at the start of this month.

Norman Wells’ town council declared a local emergency on humanitarian grounds last week as some of its 700 residents said they were facing monthly fuel bills coming to more than $5,000.

“The wholesale price increase that Imperial has applied is strictly to cover the air transportation costs. There is no Imperial profit margin included on the wholesale price. Imperial does not set prices at the retail level,” Imperial’s statement on Monday said.

The statement further said Imperial is working closely with the Northwest Territories government on ways to help residents in the near term.

“Imperial Oil’s decision to lower the price of home heating fuel offers immediate relief to residents facing financial pressures. This step reflects a swift response by Imperial Oil to discussions with the GNWT and will help ease short-term financial burdens on residents,” Caroline Wawzonek, Deputy Premier and Minister of Finance and Infrastructure, said in a news release Monday.

Wawzonek also noted the Territories government has supported the community with implementation of a fund supporting businesses and communities impacted by barge cancellations. She said there have also been increases to the Senior Home Heating Subsidy in Norman Wells, and continued support for heating costs for eligible Income Assistance recipients.

Additionally, she said the government has donated $150,000 to the Norman Wells food bank.

In its declaration of a state of emergency, the town said the mayor and council recognized the recent hike in fuel prices has strained household budgets, raised transportation costs, and affected local businesses.

It added that for the next three months, water and sewer service fees will be waived for all residents and businesses.

This report by The Canadian Press was first published Oct. 21, 2024.

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Business

U.S. vote has Canadian business leaders worried about protectionist policies: KPMG

Published

19 hours ago

October 22, 2024

Anne Joseph

TORONTO – A new report says many Canadian business leaders are worried about economic uncertainties related to the looming U.S. election.

The survey by KPMG in Canada of 735 small- and medium-sized businesses says 87 per cent fear the Canadian economy could become “collateral damage” from American protectionist policies that lead to less favourable trade deals and increased tariffs

It says that due to those concerns, 85 per cent of business leaders in Canada polled are reviewing their business strategies to prepare for a change in leadership.

The concerns are primarily being felt by larger Canadian companies and sectors that are highly integrated with the U.S. economy, such as manufacturing, automotive, transportation and warehousing, energy and natural resources, as well as technology, media and telecommunications.

Shaira Nanji, a KPMG Law partner in its tax practice, says the prospect of further changes to economic and trade policies in the U.S. means some Canadian firms will need to look for ways to mitigate added costs and take advantage of potential trade relief provisions to remain competitive.

Both presidential candidates have campaigned on protectionist policies that could cause uncertainty for Canadian trade, and whoever takes the White House will be in charge during the review of the United States-Mexico-Canada Agreement in 2026.

This report by The Canadian Press was first published Oct. 22, 2024.

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