After raising interest rates for the sixth consecutive time, Bank of Canada Governor Tiff Macklem hinted that rate hikes may be nearing the end as the economy teeters on the edge of recession.Sean Kilpatrick/CP
Getting caught up on a week that got away? Here’s your weekly digest of the Globe’s most essential business and investing stories, with insights and analysis from the pros, stock tips, portfolio strategies and more.
Interest rates hit a new high – but rate hikes are nearing an end
The Bank of Canada increased interest rates for the sixth time in a row, hiking its benchmark rate by 0.5 percentage points to 3.75 per cent – its highest level since early 2008, Mark Rendell reports. While the central bank has raised borrowing costs at a breakneck pace since March in an effort to curb runaway inflation, Bank of Canada governor Tiff Macklem hinted that rate hikes are nearing an end, as the economy teeters on the edge of recession. Persistent rate hikes have already started to negatively affect Canada’s job market, even amid a labour shortage. And even with the smaller-than-expected rate increase, real-estate experts expect that home resales and property prices will continue to cool, as borrowing costs push homeownership further out of reach for many Canadians. There is, however, a silver lining to endless rate hikes. As Rob Carrick writes, “The direct benefit of rising rates is higher returns on risk-free savings and investments that can help you reach financial goals like building a home downpayment or an investment portfolio.”
Lessons from the Raptors’ real MVP: Masai Ujiri
The Toronto Raptors are back and Masai Ujiri is on the cover of this weekend’s Report on Business Magazine, talking about leadership, work-life balance and how he built a team that won their first NBA championship in 2019. “Failure is not an option,” the Raptors vice-chairman and team president says to writer Nicholas Hune-Brown. “I don’t handle it.” Even that miserable season the team spent playing in Tampa because of COVID-19 restrictions, where the Raptors mostly lost, Ujiri considers “a winning season because we got Scottie [Barnes].” So how did a kid from Nigeria make the NBA equivalent of the mailroom-to-CEO ascension in record time to become the first African-born GM of any major North American sports team, NBA executive of the year and a world champion? Read on to find out.
Early retirement is now a luxury of the past
From the late 1970s to 1990s, the average retirement age steadily fell to as low as 57.80 for public-sector employees and 61.10 for private-sector workers. But in the past two decades, that trend has reversed direction, largely owing to longer lifespans and declining real interest rates that made retirement more expensive. In a new data-driven column launched this week, Frederick Vettese looks at why there’s a steady shift away from early retirement.
Rogers-Shaw merger fails to resolve Competition Bureau’s objections
A proposed $26-billion merger between Rogers Communications Inc. and Shaw Communications Inc. is headed for a lengthy tribunal hearing, after mediation talks failed to resolve the Competition Bureau’s objections to the deal, Alexandra Posadzki and Irene Galea report. The federal competition watchdog is attempting to block the merger of Canada’s two largest cable companies, arguing the deal would reduce competition and result in higher cellphone bills, poorer service and less choice for consumers. The companies involved – Rogers, Shaw and Quebecor Inc. (Quebecor stands to acquire Shaw’s wireless carrier, Freedom Mobile) – allege that the Competition Bureau was unwilling to “meaningfully engage” during the negotiations and that they are “disappointed with this outcome.” A hearing in front of the Competition Tribunal is scheduled to begin on Nov. 7 and could last until Dec. 8.
When it comes to groceries, freezing prices isn’t lowering them
Canadians who do their grocery shopping at Loblaw and Metro can enjoy a little stagnancy at the checkout after both chains announced a price freeze on certain brands through the holiday season. And while that might sound like good news in a year when skyrocketing inflation has hit grocery bills like never before, it also means lower prices are unlikely and the damage done to your personal finances lingers. As Rob Carrick explains, “Inflation is like an up escalator that usually runs in an orderly way,” and lately that escalator has been running fast. “High interest rates will slow the inflation escalator, but they’re unlikely to stop it altogether.” So temporary price store freezes could help slow inflation, but at the same time, grocers are locking in the price hikes we’ve seen in the past 18 months.
Meet Twitter’s new owner: Elon Musk
After taking ownership of Twitter on Thursday, Elon Musk fired a number of top executives, accusing them of misleading him and Twitter investors over the number of fake accounts on the platform. The Tesla CEO also tweeted “the bird is freed” after completing his $44-billion acquisition, referencing Twitter’s bird logo in an apparent nod to his desire to see the company have fewer limits on content that can be posted. Mr. Musk first mentioned his desire to buy the social-media company back in April, after revealing he had a 9.2-per-cent stake in the company, worth nearly $3-billion, making him the site’s largest shareholder. Here’s a timeline of everything that happened leading up to the closing of the deal.
Now that you’re all caught up, prepare for the week ahead with the Globe’s investing calendar.