Tausi Insider

A person shops at a grocery store in Glenview, Ill., on July 4. Nam Y. Huh/The Associated Press Price increases moderated in the United States last month in the latest sign that the inflation pressures that have gripped the nation might be easing as the economy slows and Americans grow more cautious. Consumer inflation reached 7.7 per cent in October from a year earlier and 0.4 per cent from September, the government said Thursday. The year-over-year increase, down from 8.2 per cent in September, was the smallest rise since January. A separate gauge called core inflation, which excludes volatile food and energy, rose 6.3 per cent in the past 12 months and 0.3 per cent from September. The numbers were all lower than economists had expected. Helping drive the inflation slowdown from September to October were used car prices, which dropped for a fourth straight month. Prices of clothing and medical care also fell. Food price increases slowed. By contrast, energy prices rebounded in Octo...

Once burning-hot Canadian house prices are expected to tumble a total 17.5 per cent from their peak, roughly double the fall during the 2008-09 financial crisis, in a slowdown already well under way, according to a Reuters poll of market experts. A succession of rapid-fire Bank of Canada interest rate rises that has taken the overnight rate from near-zero to 3.75 per cent in just eight months has removed some steam from the market, with a doubling in the average five-year mortgage rate to near 5 per cent. But after a more than 50 per cent rise in house prices during the pandemic on top of what was already seen as one of the world’s most expensive property markets, that expected fall would not be enough to bring prices to affordable levels. With a debt to net disposable income ratio of 1.85, Canadian households are among the top most indebted in the world and more vulnerable to higher rates given their higher exposure to variable rate mortgages. Peak-to-trough correction forecasts in ...

Oil prices have erased all the gains made during 2022, but by the look of things, energy investors don’t seem to really care. This week the price of West Texas Intermediate, the U.S. crude benchmark, fell into the red for the year and is down roughly 40 per cent from its 52-week high in March of more than US$120 a barrel, when Russia’s invasion of Ukraine sparked a global energy crisis. Meanwhile, energy-stock indexes might have given up some of their gains, but are down just 16 per cent from their peak in the case of Canada’s energy index, and down 9 per cent for global and U.S. energy stocks. The disconnect between oil and oil stocks reflects two big, contrasting bets facing commodities and the economy. Oil prices, like other commodities, are being hammered by fears that rising interest rates are causing a slowdown in global economic growth, which would further crimp demand for fuel. On the other hand, energy investors see value in oil and gas stocks. It helps that energy stocks ar...

After a bumper year of share buybacks and dividends, investors in debt-light Canadian oil and gas producers are set to reward shareholders even more in 2023 as they generate ample cash and show little appetite for acquisitions. Oil companies are facing faltering prices and Canadian firms are also absorbing an unusually punishing discount for their heavy-grade crude. BMO Capital Markets analysts estimate the top 35 companies will generate C$54 billion ($39.7 billion) in free cash flow in 2023, 16% lower than this year. But the portion of cash that flows to shareholders may be higher because companies will spend less on debt repayment, BMO’s managing director of oil and gas equity research Randy Ollenberger said. “We don’t see 2023 as being challenging for the sector given the improvement to balance sheets,” he said. Most large- and mid-size producers expect to be net-debt-free in the second half of 2023, according to BMO. Net debt represents a company’s gross debt minus cash and cash-...

People shop for shoes in a Nike store in New York, on Nov. 25. Julia Nikhinson/The Associated Press Inflation in the United States slowed again last month in the latest sign that price increases are cooling despite the pressures they continue to inflict on American households. Consumer prices rose 7.1 per cent in November from a year ago, the government said Tuesday. That was down sharply from 7.7 per cent in October and a recent peak of 9.1 per cent in June. It was the fifth straight decline. Measured from month to month, which gives a more up-to-date snapshot, the consumer price index inched up just 0.1 per cent. And so-called core inflation, which excludes volatile food and energy costs and which the Federal Reserve tracks closely, slowed to 6 per cent compared with a year earlier. From October to November, core prices rose 0.2 per cent – the mildest increase since August, 2021. All told, the latest figures provided the strongest evidence to date that inflation in the United State...

An employee does a quality control check on an assembly line of generic drugs at Pharmascience manufacturing facility in Montreal, Quebec. Christinne Muschi/Tausi Insider When federal Health Minister Jean-Yves Duclos announced in April that the Trudeau government was dropping key aspects of its proposed plan to cut the cost of patented drugs, it looked like a truce had finally prevailed in the five-year long war between the pharmaceutical industry and the regulatory body that sets maximum prices for brand-name drugs in Canada. It did not take long, however, for hostilities to resume after the Patented Medicine Prices Review Board (PMPRB) tabled draft regulations in October setting out new criteria the agency intends to use to determine whether to open an investigation into “excessive pricing.” The move has put the industry back on the warpath. It is calling on Mr. Duclos to scrap the new guidelines, which are set to take effect on Jan. 1, even though the PMPRB itself is in disarray....

A for sale sign in front of a house in Prospect Heights, Ill., on July 10. Nam Y. Huh/The Associated Press House prices in most major property markets will fall in 2023, according to nearly 100 housing market analysts polled by Reuters, but they predicted double-digit peak-to-trough declines will not come close to making them affordable. Mortgage rates have doubled on average in developed economies since the start of the year as their central banks fight runaway inflation with higher interest rates. With a few more hikes still expected to come, that trend was unlikely to reverse in the short-to-medium term. House prices in the United States, Canada, Britain, Germany, Australia, and New Zealand rose between 25 per cent and more than 50 per cent since the outbreak of the coronavirus pandemic in early 2020. That rally, lit by rock-bottom rates and a scramble by millions who shifted to work from home to find more living space, pushed properties further out of reach for many first-time ho...

A person leaves a Toronto supermarket on Oct. 5. Alex Lupul/The Canadian Press Canada’s inflation rate eased slightly in November but there were signs that underlying price pressures in the economy remain strong, increasing the odds that the Bank of Canada moves ahead with another interest-rate increase in January. The Consumer Price Index rose 6.8 per cent compared with the previous year, as lower prices at the gas pump offset an acceleration in grocery prices and rent costs, Statistics Canada reported Wednesday. That’s down from 6.9 per cent in October, although slightly ahead of economist expectations of 6.7 per cent. The rate of inflation has trended down since peaking near a four-decade high of 8.1 per cent in June. But key measures of core inflation, which strip out volatile food and gasoline prices, continued to rise in November. That suggests the economy is still running hot in the face of multiple interest-rate hikes, and makes it more likely that the Bank of Canada will rai...

A person leaves a Toronto supermarket on Oct. 5. Alex Lupul/The Canadian Press Canada’s inflation rate eased slightly in November but there were signs that underlying price pressures in the economy remain strong, increasing the odds that the Bank of Canada moves ahead with another interest-rate increase in January. The Consumer Price Index rose 6.8 per cent compared with the previous year, as lower prices at the gas pump offset an acceleration in grocery prices and rent costs, Statistics Canada reported Wednesday. That’s down from 6.9 per cent in October, although slightly ahead of economist expectations of 6.7 per cent. The rate of inflation has trended down since peaking near a four-decade high of 8.1 per cent in June. But key measures of core inflation, which strip out volatile food and gasoline prices, continued to rise in November. That suggests the economy is still running hot in the face of multiple interest-rate hikes, and makes it more likely that the Bank of Canada will rai...

Food prices continue to soar, which push the cost of Christmas dinner even higher. Sean Kilpatrick/The Canadian Press Christmas comes but once a year, which is probably for the best given how much more expensive holiday dinner with the family will be this weekend. A hypothetical basket of food items that go into a traditional Christmas dinner costs nearly 12 per cent more than a year ago, based on inflation data for November released by Statistics Canada this week. That tops the 10.3-per-cent rise in overall food prices and far exceeds the all-items consumer price index, which eased slightly to 6.8 per cent, from 6.9 per cent the month before. The Christmas dinner basket is the average inflation rate of items such as poultry, potatoes, bread and rolls, butter, jams and preserves (for the cranberry crowd) and fresh and canned vegetables, with some potato chips and ice cream thrown in for snacks and dessert. Statistics Canada doesn’t specifically break out turkey prices in its monthly ...

People shop at Fiesta Farms independent grocery in Toronto on Jan. 20. Christopher Katsarov/Tausi Insider In many homes, dry pasta is a ubiquitous pantry item. Busy families with picky eaters can prepare steaming bowls of cost-friendly spaghetti or penne in minutes, a salve to hectic schedules and stretched budgets. Of late, those costs aren’t nearly as friendly. Pasta prices have been climbing rapidly during this spell of high inflation, far exceeding the increases for most other grocery items. As of October, the price of pasta products had jumped 27.4 per cent over the past year, according to Statistics Canada, compared with general food inflation of 10 per cent. Dry and fresh pasta was up 45 per cent. The average retail price for a 500-gram package of pasta was $3.40 in October, an increase of $1.19 (54 per cent) from two years earlier. Food inflation takes a big bite out of Christmas dinner budgets It’s not just a Canadian trend. In Britain, the price of pasta products and cousco...

Spanish Energy Minister Teresa Ribera, in Madrid, Spain, on Oct. 7, 2022. VIOLETA SANTOS MOURA/Reuters Spain will seek European Union permission to extend its temporary cap on reference prices for natural gas and coal used by power plants until at least the end of 2024, Energy Minister Teresa Ribera said on Monday. The so-called Iberian mechanism, in place in Spain and Portugal after the two countries reached a deal with the European Commission in the spring of 2022, is a joint scheme through which fossil fuel plants’ power costs are subsidized in a bid to bring down soaring electricity prices. “We intend to ask for the Iberian mechanism to be maintained for the duration of the energy crisis or until the electricity market is reformed and European regulation is updated,” Ribera said in an interview with TV station Antena3. “We would like the gas cap to stay within the lower end of the range, about 45 or 50 euros per megawatt hour, extending it at least until the end of 2024,” she add...

A woman shops at a grocery store in Glenview, Ill., on Nov. 19, 2022. Nam Y. Huh/The Associated Press U.S consumer prices unexpectedly fell for the first time in more than 2½ years in December amid declining prices for gasoline and other goods, suggesting that inflation was now on a sustained downward trend. The consumer price index dipped 0.1 per cent last month after gaining 0.1 per cent in November, the Labor Department said on Thursday. That was the first decline in the CPI since May 2020, when the economy was reeling from the first wave of COVID-19 infections. Economists polled by Reuters had forecast the CPI unchanged. In the 12 months through December, the CPI increased 6.5 per cent. That was the smallest rise since October 2021 and followed a 7.1 per cent advance in November. The annual CPI peaked at 9.1 per cent in June, which was the biggest increase since November 1981. Inflation remains well above the Federal Reserve’s 2 per cent target. Price pressures are subsiding as t...

An oil storage tank and crude oil pipeline equipment at the Strategic Petroleum Reserve, in Freeport, Tex., on June 9, 2016. Richard Carson/Reuters The Republican-controlled House on Thursday voted to block oil from the country’s emergency stockpile from going to China. The bill, one of the first introduced by the new GOP majority, would prohibit the Energy Department from selling oil from the Strategic Petroleum Reserve to companies owned or influenced by the Chinese Communist Party. It passed easily, 331-97, with 113 Democrats joining unanimous Republicans in support. Rep. Cathy McMorris, R-Wash., the new head of the House Energy and Commerce Committee, said the bill would help end what she called President Joe Biden’s “abuse of our strategic reserves.” Biden withdrew 180 million barrels from the strategic reserve last year in a bid to halt rising gasoline prices amid production cuts by OPEC and a ban on Russian oil imports following Moscow’s invasion of Ukraine. The monthslong sal...