9.46am: Proactive North America headlines:
Gratomic announces progress update on benching program at its Aukam project in Namibia
Rio2 updates on Fenix gold EIA; files appeal
BetterLife Pharma and collaborators to submit key joint research on BETR-001 to publication
Playgon Games (TSX-V:DEAL, OTCQB:PLGNF) inks software license and distribution deal with Pariplay
BANXA Holdings deepens push into US market with new payment solutions and Reno-based team
Infinity Stone Ventures expands its land position in the James Bay lithium district in Quebec
SPC Nickel posts more encouraging drill results from its Lockerby East project in Sudbury, Ontario
Hapbee Technologies launches ‘Routines By’ featuring wellness routines developed and shared by Hapbee users
Mindset Pharma files 16 national patent applications to protect family of novel next-generation psychedelics
PyroGenesis Canada awarded additional projects for magnesium processing
Lavras Gold hits ‘bonanza’ gold grades from first drilling at Zeca Souza target at Lavras do Sul project
Jushi Holdings debuts cannabis-infused chocolates; marks entry into edibles market
GR Silver Mining (TSX-V:GRSL) hails latest drill results, which show resource expansion potential at San Marcial area of Plomosas
Ortho Regenerative Technologies announces name change to ChitogenX
Delta 9 Cannabis completes acquisition of three retail cannabis stores in Manitoba
Alkaline Fuel Cell Power says Belgium subsidiary earns ISO certification
Givex Information Technology launches point of sale system for three hotels in Mexico
Endexx says its Blesswell premium skincare line for men is now available via Amazon.com
Standard Uranium plans to conduct a non-brokered private placement to raise gross proceeds of up to C$3.5M given the current strength of the global uranium sector
9.35am: More equity losses expected
US stocks opened mixed on Wednesday following a Wall Street Journal report that a 75 basis point rate hike by the Federal Reserve later this month is likely.
Just after the open, the Dow Jones Industrial Average had dipped 13 points at 31,132 points.
The S&P 500 was up 3 points at 3,911 points and the Nasdaq Composite had gained 34 points at 11,579 points.
CityIndex and FOREX.com market analyst Fawad Razaqzada said sentiment towards equities, bonds, cryptos, metals, and foreign currencies remained negative.
“Investors appear reluctant to buy anything in this macro environment, where inflation is soaring, global growth is weakening, and central banks are tightening,” he said.
“Also not helping is the fact we are in a bear market, where traders are happy to sell into the rallies than buy the dips. At this stage, there are not many technical or indeed fundamental signs to appease the bulls. So, expect more losses for equity markets.”
6:30am: Fleeting relief?
US stocks were expected to open slightly higher on Wednesday following sharp recent falls as investors ponder the prospect for more interest rate hikes, elevated levels of inflation, and a stronger dollar.
Futures for the Dow Jones Industrial Average were trading flat pre-market, while those for the broader S&P 500 index were up 0.1%, and futures for the tech-laden Nasdaq-100 were 0.2% higher.
The three major US indices fell on Tuesday, US bond yields spiked and the dollar extended its rally, as Americans returned from their Labor Day break, noted Ipek Ozkardeskaya senior analyst at Swissquote Bank.
“The S&P 500 closed a couple of points above the closely watched 3900 mark, the major Fibonacci 61.8% retracement on the summer rally, which, if cleared should point at a deeper bearish trend in the medium run,” she added.
The US Federal Reserve’s recent series of interest rate increases and its determination to fight inflation with more rate hikes have kept investors on edge as they fear that economic activity in the world’s biggest economy will start to waver. While economic data, especially in the labor market, continue to hold up well, many expect headline figures to soften over the coming months.
These factors are putting equities under pressure although each bout of selling is likely to be tempered by a spot of bargain hunting in US markets, especially as investors look to avoid turbulence in global markets.
Ozkardeskaya pointed out that the equity sell-off has deepened as US companies rush to sell bonds before it gets more expensive.
She noted: “Yesterday alone, 19 US companies including big names like Nestle, Walmart, Target and McDonalds issued a large amount of bonds – about $30 to $40 billion – following an almost 60bp point jump in high-grade yields since the beginning of August. That’s the largest amount sold since September last year.”
The demand for bonds pushed the US 2-year Treasuries yield above 3.50%, and the 10-year yield above 3.35% for the first time since mind-June, she added.
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Powell says economy may be entering 'new normal' after pandemic – BNN Bloomberg
(Bloomberg) — Federal Reserve Chair Jerome Powell said the US economy may be entering a “new normal” following disruptions from the Covid-19 pandemic.
“We continue to deal with an exceptionally unusual set of disruptions,” Powell told business and community leaders Friday at a Fed Listens event in Washington. “As policy makers we’re committed to using our tools to help see the economy through what has been a uniquely challenging period.”
In his brief welcoming marks, Powell didn’t discuss the outlook for interest rates or offer more specifics on the economic outlook. All seven of the Board’s governors were present for the panel with Philip Jefferson and Lisa Cook making public comments in their roles as Fed officials for the first time.
Fed officials heard a consistent message that shortages and scarcity were still afflicting businesses along with high labor turnover. Speaking about the small- and medium-sized companies they consult with, Cara Walton, for Harbour Results in Southfield, Michigan, said her clients “can’t find people,” and when they do find them, turnover is high.
US central bankers raised their benchmark lending rate by three quarters of a percentage points this week for a third straight time — the most aggressive pace of tightening seen since the Fed battled inflation back in the 1980s.
Powell and his colleagues are moving rapidly to reduce the highest inflation in nearly 40 years after being slow to spot the threat of broadening price pressures. Critics have slammed them for that error, although inflation has also been worsened by Russia’s invasion of Ukraine, which boosted food and energy prices around the world.
Fed Vice Chair Lael Brainard, speaking later during the event when the panel considered how families are adapting to the post-pandemic economy, noted that price pressures were hitting the most vulnerable particularly hard.
“We have seen high wage growth among the lowest income workers but looking overall, wages haven’t kept up with inflation and inflation is very high,” she said. “If we look at who bares the burden, everybody is affected by high inflation but of course it puts special burdens on lower income families as well as on people with fixed incomes.”
US consumer prices rose 8.3% in the 12 months through August and officials have vowed to cool them even if that means causing harm to the US economy and its workers.
Officials couch this as an effort to slow excess demand and put the labor market back into “balance” — a euphemism that glosses over the fact many people could lose their jobs in the process. The labor market has so far remained strong, with unemployment at 3.7%, but policy makers this week forecast that would rise to around 4.4% next year as they continue to raise interest rates.
Fed Listens events have been held around the US since 2019 as the central bank sought public input on a review of its approach to monetary policy. That overhaul was completed in 2021 but the Fed has kept them going to maintain public engagement at a time when its actions remain front-page news.
In closing, Powell thanked the panelists for sharing their experiences of the post-pandemic economy.
“We get to spend a lot of time with data, here at the Fed. But I personally would say I need to hear narratives, I need to hear stories, about what’s really going on out there for it all to make sense,” he said. “We all learned a lot from you today.”
(Adds comment from closing remark from Powell in final paragraph.)
©2022 Bloomberg L.P.
Charting the Global Economy: Fed Headlines Concert of Rate Hikes – BNN Bloomberg
(Bloomberg) — Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.
The Federal Reserve, Bank of England and Sweden’s Riksbank were just a handful of central banks raising interest rates this week, underscoring the drastic tightening cycle underway as inflation grips the global economy.
Switzerland, South Africa also boosted their benchmark rates. Indonesia, Philippines and Vietnam raised borrowing costs as well following the Fed’s decision.
On the other hand, Turkey surprised with another rate cut, despite inflation running at a 24-year high and the lira trading at a record low. Officials in Hungary may deliver at least one more hike before considering ending the steepest monetary tightening cycle in the European Union.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
The Fed headlined a marathon week of interest-rate hikes, which also stretched to central bankers in Taiwan, Sweden and Mongolia. Meanwhile, Brazil and Norway indicated they may take a time-out from their tightening of monetary policy. The Bank of Japan stuck with its ultra-low rates and Governor Haruhiko Kuroda said there’s little prospect of a near-term rate boost.
The price of copper — used in everything from computer chips and toasters to power systems and air conditioners — has fallen by nearly a third since March. Still, some of the largest miners and metals traders are warning that in just a couple of years’ time, a massive shortfall will emerge for the world’s most critical metal.
Fed Chair Jerome Powell vowed the US central bank would crush inflation after officials raised interest rates by 75 basis points for a third straight time and signaled even more aggressive hikes ahead than investors had expected.
Sales of previously owned homes fell for the seventh straight month in August as rising mortgage rates continued to erode affordability and deal a considerable blow to the housing market. The string of declines was the longest since the housing market crashed in 2007.
More consumers are saddled with credit-card debts for longer periods of time, according to a survey, struggling to pay down amid high inflation and rising interest rates. Sixty percent of credit-card debtors say they have been in credit-card debt for at least a year, up from 50% a year ago, CreditCards.com said.
The risk of a euro-area recession has reached its highest level since July 2020 as concerns grow that a winter energy squeeze will cause a slump in economic activity. Economists polled by Bloomberg now put the probability of two straight quarters of contraction at 80% in the next 12 months, up from 60% in a previous survey.
Dockers at Liverpool, Britain’s fourth-biggest container port, voted unanimously to reject their employer’s latest pay offer — and walk off the job for two weeks in a strike that got into full swing on Tuesday. It’s the latest outbreak of the labor unrest that’s sweeping through key choke points of the world economy.
Singapore looks like an attractive location for firms wanting to exit Hong Kong, but they may find a move to the city-state hits their bottom line more than expected. With inflation soaring to the highest level in 14 years, expenses including the hiring of talent, office space and utilities are rising at a faster pace in Singapore than in its financial rival, where price increases have been more modest.
South Korea’s early trade data showed exports are only just still growing in September in a sign of fallout from lockdowns in China and a struggling global economy. Headline exports dropped 8.7%, led by a 14% decline in shipments to China.
Emerging Asian markets are reaping the rewards of years of building up foreign-exchange reserves as they become a preferred destination for risk investors. Even as the dollar rallied, emerging Asia’s currencies are mostly faring better than traditional havens such as the yen and euro.
Mexico’s inflation remained little changed in early September, giving Banxico minimal room to reduce the pace of interest rate hikes at its meeting next week.
©2022 Bloomberg L.P.
TSX slumps as oil falls below $80 and economic gloom settles in – CBC News
Canada’s benchmark stock index dropped heavily on Friday as prospects of a global recession cause investors to sell first and ask questions later.
The S&P/TSX Composite Index was off by more than 520 points or 2.75 per cent to close at 18,480, dragged down by a plunge in the price of oil. That’s the lowest level for the benchmark Canadian stock index since July.
The benchmark price of crude oil in North America lost almost $5 to close at $79.13 a barrel, its lowest price since January. The catalyst for oil’s decline seems to have been central banks signaling this week that they are so committed to reining in inflation that they are willing to create a recession to achieve it.
The U.S. Federal Reserve hiked its benchmark interest rate on Wednesday, and nine other countries around the world followed suit the next day. That will help bring down inflation, but it will likely come at great cost to the economy.
“Clearly what they are saying is they are so determined to bring inflation down that they are going to bring down the economy in the process,” said John Zecher, the founder of Toronto-based money manager J Zechner & Associates. “That’s the way the market is reading it … They aren’t going to stop until the economy turns down.”
Oil price down to lowest since January
A recession would lead to much less demand for energy, which is why oil sold off. About a fifth of the companies on the TSX are in the energy sector, and they were among the biggest losers Friday. Shares in Suncor, Cenovus, MEG Energy and Crescent Point all lost more than eight per cent on the day.
More and more economic indicators are starting to suggest Canada’s economy either already has derailed or is about to. Employment numbers last week showed the economy has lost jobs for three months in a row, and retail sales data on Friday showed that Canadians are putting away their wallets once more.
Stock markets are responding to that gloom, and some analysts think there is a lot more pain to come.
“The lows that we saw recently in the summer months are going to be challenged in the next couple of days to weeks,” said Larry Berman, chief investment officer with Toronto-based money manager QWealth, in an interview. “The market [isn’t] priced for what the central banks are going to do.”
The Canadian dollar dipped as low as 73.61 cents US, its lowest level in more than two years.
Shares in New York also sold off, with the Dow Jones Industrial Average closing down almost 500 points to 29,590 — its lowest level of the year.
“Over the next couple of weeks, long-term investors may hesitate buying into weakness,” said Edward Moya, an analyst with foreign exchange firm Oanda. “How far we go below the summer lows is anyone’s guess.”
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