A dockworkers’ strike that cost the U.S. economy billions. Shots fired at the homes of two executives tied to a Canadian giant in the North American waste space. A change in ownership of the country’s most storied hockey brands. At the end of a dizzying week, we find five takeaways for the final stretch of the 2024. But first:
In the news
The mortgage mountain on the horizon might become more of a hill. Homeowners with upcoming renewals might have less reason to panic as rates come down.
Commission mission: The country’s Competition Bureau has obtained a court order for a probe into the Canadian Real Estate Association’s commission policies.
Raise money? In this economy? Y2K was still a major concern for Bay Street the last time quarterly stock sales were this bad. That means Canadian companies aren’t building when the economy needs them to be.
Happening today
- Investors are watching today’s U.S. non-farm payrolls report, which could set the market’s mood ahead of the Federal Reserve’s next rate decision.
What we're aiming for today.
In focus
Five takeaways from a dizzying week
1. We have questions
In the span of 66 minutes, multiple shots were fired at the Toronto homes of two executives tied to waste management giant GFL – including the company’s chief executive officer – in what police are calling connected incidents.
The first shooting took place at 11:52 p.m. Sunday at the Rosedale home of GFL founder and CEO Patrick Dovigi.
The second shots were clocked at around 12:58 a.m. on Monday, at a home in the affluent neighbourhood of York Mills – optimistically estimated by Google to be about a 25-minute drive. That house belongs to Ted Manziaris, a long-time business partner of the company’s CEO.
- It’s striking, if not unsurprising, that shots can be fired at the house of a CEO of a company worth $20-billion and its stock value barely budges.
- But investors likely have the same questions we all do: Why were they targeted? Who was behind the shooting? What impact, if any, might this saga have on a Canadian-born company that grew into one of the largest environmental waste disposal firms in North America?
With the company set to report earnings in the coming weeks, unanswered questions are unlikely to subside.
2. The business of hockey is changing
In the span of two days, news emerged that two of Canada’s most recognizable brands were changing ownership.
On Tuesday, Andrew Willis reported that CCM – a company that started making skates from the scrap steel of its bicycle-making business – was being sold to a Swedish asset manager. That news came a day after Bauer, also founded in the early decades of hockey’s booming popularity in Canada, was moving under the control of Fairfax Financial Holdings.
- The new owners are both seeking to capitalize on a swell of enthusiasm around hockey in new markets as the sport grapples with declining youth participation numbers in Canada.
- One of those markets is Europe, where the puck will drop tonight on the first game of the NHL’s regular season. The Czech Republic, which has produced its share of hockey stars, plays host to the Buffalo Sabres and the New Jersey Devils in Prague.
- That might not make for a headliner in North America, but that’s beside the point: For the NHL – and potentially hockey itself – the league’s ability to carve out new fans will prove critical to the game’s growth.
3. The dockworkers’ strike wasn’t just about money
Odds are you’ve seen some of the numbers: 45,000 dockworkers went on strike this week along the entirety of the U.S. East and Gulf Coasts. Billions of dollars were lost each day.
Even after as the ports begin to reopen, all of it could still prove damaging to the global supply chain. (Bananas, in particular, were reportedly at risk.)
- But those dockworkers weren’t just fighting for higher pay and better pensions. They were demanding “absolute airtight language that there will be no automation or semi-automation.”
At the ports, automation is replacing humans with driverless trucks and high-tech cranes. But you don’t need to look too far to see similar battles unfolding across industries: The use of artificial intelligence was the thorniest issue in the longest strike in Hollywood’s history last year and continues to play out in the video game world.
- And last week, California Governor Gavin Newsom vetoed a bill that would have become the most comprehensive set of policies around AI in the U.S., putting up guardrails around its use in virtually every space in which the technology is being applied.
- The tech companies in Silicon Valley won that battle, arguing the rules would stifle growth and innovation.
In many ways, those striking dockworkers were on the front lines of a war many of us have waged only in our worst – and, let’s be honest, sometimes best – daydreams: that one day, the tap on the shoulder will come, we will swivel around, and a robot will be making eyes at our chair.
4. Canadian miners are in tough
At least in Mali. Barrick Gold Corp. is among the companies grappling with new tensions as the ruling military junta seeks greater control of the mining sector. Following the arrest of four senior employees (who were later released), the Toronto-based company said this week it had reached an agreement to “find a global resolution” with authorities to settle disputes.
An agreement sounds promising in concept, but the lack of details provided in the announcement suggests an agreement to negotiate an agreement. If nothing else, the statement might provide a sense of how urgently Barrick might be moving to qualm concerns that it’s losing its grip on crucial operations in the West African country.
- Mali introduced a new mining code last year aimed at imposing higher royalties on foreign companies operating in the country.
- Barrick is pushing back on the new code, and has challenged an audit of the company’s operations in the country conducted by the government.
- But the miner finds itself negotiating with a government that is becoming increasingly close with Russia, which is providing mercenaries to combat jihadist groups.
- Recent rebel insurgencies have created “an atmosphere of political and economic desperation in which the government could contemplate more extreme measures against investors,” Africa correspondent Geoffrey York told me.
5. Geopolitical shocks leave markets (mainly) unmoved
The challenge presented by the dockworkers’ strike threatened a “multiplier effect” on other concerns, like the worrisome possibility of conflict in the Middle East erupting into wider regional war. And vice versa. Though the port disruption only lasted a few days, its effects might not wind their way through the economy for weeks, or even months.
But these are geopolitical concerns, from which markets have become mostly immune. In the long run, both the prices of oil and the direction of the markets in general find balance after their immediate, more emotional swings.
- Oil has spiked this week, but recent history suggests prices will fall if any sign of de-escalation emerges.
- Jackie Forrest, executive director of the ARC Energy Research Institute in Calgary, told The Globe that oil markets have been shrugging off developments in the Middle East given the long-broiling conflict has yet to result in disruptions.
- And Tim Shufelt’s piece this week shows an apparent disconnect between what’s happening in the world and how the markets see it isn’t a bug, but a feature: They’ve been here before.
- The further back you step from the markets’ performance over the last several decades, the more their trajectories track against wider economic gains.
I don’t know if there’s a sharper lesson to be learned from the markets’ slow and steady climb further and further up the mountain even as these corporate twists and economic shocks unfold. Maybe it’s reassuring to know there is some logic to it. Maybe it’s that I’m lucky to be sitting here, thinking about these things, relatively safe and stocked up on bananas. Or that I’m able to sit here and think at all. Could a robot do this? Ha! Hold on, I just felt something on my shoulder.
Views
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Public money should not fund Ottawa Senators’ fancy new stadium.
Dockworker strikes are a lose-lose for governments.
Charted
It’s not time to panic about consumer insolvencies – yet
For Canadian households, the one-two punch of high inflation and interest rates has left a deep mark, forcing consumers to cut back on spending and shaking housing markets.
On the surface, the latest insolvency numbers for August point to even more strain. But as with every measure of Canada’s economy these days, Jason Kirby writes, the population boom skews the picture. You can read more in this week’s Decoder.
Morning markets
Global stocks rose on Friday while oil prices were headed for their biggest weekly gain in two years, as escalating tensions in the Middle East kept markets on edge. With the all-important monthly U.S. nonfarm payrolls report just hours away, investors were reluctant to drive any asset prices too hard in one direction or another.
Wall Street futures were flat as traders looked ahead to the anticipated report.
Overseas, the pan-European STOXX 600 was up 0.2 per cent in morning trading. Britain’s FTSE 100 was down 0.44 per cent, Germany’s DAX was up 0.24 per cent and France’s CAC 40 was up 0.54 per cent.
In Asia, the Nikkei rose 0.22 per cent, but was set for a weekly loss of about 3 per cent, while Hong Kong’s Hang Seng climbed 3 per cent to an over two-year high as investors continued to cheer China’s stimulus measures.
The Canadian dollar traded at 73.78 U.S. cents.