Bank of Canada Governor Tiff Macklem gestures at a press conference at the Bank of Canada in Ottawa, on Wednesday, Oct. 26, 2022. The Bank of Canada hiked its key policy rate half a percentage point to 4.25 – the highest it's been since January 2008 – on Wednesday as its bid to rein in stubbornly-high inflation rates and address slowing economic growth continues. THE CANADIAN PRESS/Sean KilpatrickSean 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 went up, again. But here’s the good news
The Bank of Canada raised interest rates for the seventh consecutive time this week, increasing the benchmark lending rate by half a percentage point to 4.25 per cent, the highest level since early 2008. While the rapid rate-hike cycle has been painful for borrowers – especially for Canadians with a variable-rate mortgage, line of credit or floating rate loan – according to Rob Carrick, there’s a positive spin here, too. If we haven’t reached the peak for the overnight rate, we’re very close. The interim period until rates fall is an endurance test for variable-rate mortgage holders and people with home equity lines of credit. For everyone else – savers, GIC investors and fixed-rate mortgage holders – it’s time to change your thinking on interest rates.
The ire of Swifties? Live Nation’s czar from Thunder Bay
Michael Rapino, the Thunder Bay-born CEO of music industry goliath Live Nation – part concert promoter, venue operator, artist manager and dispenser of coveted tickets through Ticketmaster – has found himself thrust into the role of corporate villain after last month’s bungled presale of tickets for Taylor Swift’s Eras tour. Now, the US$15-billion-a-year company is facing attacks from multiple fronts. Legions of Swift fans have filed lawsuits claiming Live Nation “violated California’s antitrust and unfair competition laws.” The House energy and commerce committee demanded a briefing from Mr. Rapino about “the circumstances surrounding the Eras tour,” and the U.S. Department of Justice had already launched an antitrust investigation prior to the ticketing debacle. Jason Kirby looks at Mr. Rapino’s rise from son of a Thunder Bay accountant to global impresario and political target.
Are you covered by a workplace pension plan?
Pensions are rarely an option for private-sector workers today. As Frederick Vettese examines in this week’s Charting Retirement, coverage peaked at 31.7 per cent in 1982 and has trended downward ever since, and is expected to fall even further in 2025 when higher CPP contribution rates are fully in place. Meanwhile, coverage for public-sector employees is almost 100 per cent.
Porter airlines is expanding to Pearson with new jets
Toronto’s Porter airlines is spreading its wings with a fleet of Embraer E-195 jets that’ll help the company compete with its mainline rivals. Unlike its fleet of turboprops at Billy Bishop Toronto City Airport, the new 132-seat aircraft will be based at Toronto Pearson International Airport, putting Porter in direct competition with Air Canada, Air Transat, WestJet Airlines and the low-cost carriers in Eastern Canada. As Eric Atkins reports, Porter is targeting economy-class passengers, and will extend its reach to all of North America, as well as Caribbean vacation spots. Porter is scheduled to receive 50 of the Brazilian jets by the end of 2024 and has options for another 50, for a total purchase price of $7.4-billion at list prices.
Greater transparency might be coming to short selling
A coalition of Canadian securities regulators is considering stricter transparency rules for short sellers, including disclosing their names and trading positions to the public whenever they make a significant short sale. Short selling is a bet that the price of a stock will decrease. A short seller will borrow shares and sell them, only to repurchase them at what they hope will be a lower price. When they replace the borrowed shares, the short seller can pocket the difference. According to Greg McArthur, the regulators’ new notice is part of a broader review of short selling – one of the most polarizing issues in the capital markets – by the Canadian Securities Administrators. Over the past few years, a number of organizations have taken aim at several aspects of how Canada regulates short selling, and in 2022, seven Canadian public companies have been targeted by activist short-selling campaigns
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Now that you’re all caught up, prepare for the week ahead with the Globe’s investing calendar.