Good morning. We’re a day late to our weekly lookahead, which we’ve been trying to do more routinely. Good news: There’s still lots of week left! Bad news: There’s still lots of week left! Today, we’ll cover off all the files that will help make Friday come a little faster.
Up first
In the news
Deals: Ottawa is pushing Anglo American PLC to redomicile to Canada as it reviews the British miner’s proposed acquisition of Teck Resources Ltd., two sources familiar with the matter told The Globe and Mail.
Defence: A new Canadian company plans to build the country’s biggest explosives factory since the Second World War with the help of France’s state-controlled Eurenco, Europe’s top maker of military explosives and propellants.
Law: Ontario’s Attorney-General has come out against a proposal to eliminate the province’s bar exam for new lawyers and replace it with a course-based licensing process.
Investment: China’s global lending portfolio is at least double previous estimates.
Janet Bannister in her Toronto home.Fred Lum/the Globe and Mail
Sharing is caring
Janet Bannister, one of Canada’s best-known startup financiers, has raised $32-million for the second seed-stage fund of her firm, Staircase Ventures. The company invests in early-stage startups and pays for their founders’ coaching, financial advice and family-care support – and early results suggest Janet Bannister’s model is working. You can find the full story here.
In focus
Six stories to watch
All in the execution: Bank of Canada Deputy Governor Nicolas Vincent is poised to deliver a speech tomorrow on the country’s productivity levels, an issue bank officials have called a crisis. Today’s report from the Council of Canadian Academies shows the country is failing to spend on the kind of research and development that leads to innovation, which leads to productivity, which leads to economic growth.
After cutting the bank’s benchmark lending rate last month, Governor Tiff Macklem said that unless governments and businesses can find ways to improve productivity, “our standard of living as a country, as Canadians, is going to be lower than it otherwise would have been.”
Macklem said the recent federal budget could enhance the country’s productivity, “but it’s going to come down to execution.”
Finding a signal: Following a record 43-day U.S. government shutdown, federal agencies are expected to begin clearing out a backlog of data.
The first significant report – non-farm payrolls for September – could come this week. Private numbers have suggested the labour market continues to weaken, supporting the case for a December Federal Reserve rate cut. Officials are warning, though, that some data may have been lost forever, meaning the economic fog might take time to clear.
A fragile deal might have been reached to end the longest government shutdown in U.S. history, but the loss of key economic reports has left policy makers and market watchers struggling to take the pulse of the U.S. economy.
Once the information backlog starts to clear and the disparity between best guesses and reality is revealed, the market response is expected to be dramatic.
“It is terrifying, to be honest with you,” Ian Pollick, head of fixed income, currencies and commodities strategy at CIBC Global Markets, told The Globe. “I know what happens the day this is done. You will get this copious amount of data printing all at once, or in small batches in very quick succession.”
More than meets AI: Nvidia’s quarterly report tomorrow will be a critical test for the high-flying AI trade that has started to make some spluttering noises in recent weeks.
The semiconductor giant became the world’s first US$5-trillion company last month. It has lost a bit since then, but with a staggering 8-per-cent weighting in the S&P 500 and significant influence in many global indexes, it can easily sway markets on its own.
The AI bellwether’s forecasts and the broader industry perspective will have ramifications for the wider tech ecosystem. It will either ease or fuel those nagging investor concerns that this is already the next big bubble.
Shares in Nvidia dropped 1.9 per cent yesterday, following swings of at least 1.8 per cent in eight of the last 10 days. It’s still up nearly 40 per cent for the year.
Retail therapy: Statistics Canada’s early estimate shows retail sales dipped 0.7 per cent in September, reversing most of the 1-per-cent gain in August. Even so, sales volumes still appear to have grown in the third quarter – just at a slower pace than in the spring. A report from RBC said that matches what economists saw in its own cardholder spending data for the third quarter – a trend that suggests consumers are still holding up reasonably well, even as overall spending continues to cool.
On autopilot: October inflation numbers will be reported by individual European countries and the euro zone as a whole. Core consumer inflation has stayed around the European Central Bank’s 2-per-cent target for most of 2025, and money markets have priced in no moves from the ECB next year.
In conflict: After initially suggesting it would leave monetary policy largely to its central bank, Japan’s new government is now urging the central bank to go slow on raising rates. Consumer price data due on Friday could give the Bank of Japan little choice.
With files from Reuters and the Associated Press
Charted
Prices rise, but more slowly
Cheaper prices at the gas pumps and grocery stores helped bring down inflation in October, Statistics Canada reported yesterday.
The annual rate of inflation cooled to 2.2 per cent, down from 2.4 per cent in September. Gas prices fell 4.8 per cent as retailers switched to cheaper winter blends of fuel. Prices at the grocery store also fell 0.6 per cent in October, the largest month-to-month decline since the fall of 2020.
Quoted
I can confirm to this House that we will respect our Paris commitments for climate change and we’re determined to achieve them.
Prime Minister Mark Carney on whether the government is committed to several of its environmental policies. The last-minute climate pledge won over Green Party MP Elizabeth May, helping the government survive yesterday’s confidence vote.
Morning update
Global markets fell in a broad risk-off mood, sparked by worries about an overvalued tech sector and diminishing prospects of an imminent interest rate cut from the U.S. Federal Reserve.
Wall Street futures were in negative territory, while TSX futures followed sentiment lower after major North American markets closed down yesterday.
Overseas, the pan-European STOXX 600 was down 1.18 per cent in morning trading. Britain’s FTSE 100 declined 1.21 per cent, Germany’s DAX dropped 1.09 per cent and France’s CAC 40 retreated 1.12 per cent.
In Asia, Japan’s Nikkei closed 3.22 per cent lower, while Hong Kong’s Hang Seng dropped 1.72 per cent.
The Canadian dollar traded at 71.25 U.S. cents.