Briefing highlights
- Canadian dollar at about 76.5 cents
- Markets at a glance
- Manufacturers suffer January setback
- Counting multimillionaires
- What to watch for today
Sunny and warm but …
It's expected to be 26 degrees and sunny in Orlando today.
If you happen to be there for March break, enjoy it. Because you won't enjoy the cost of dinner tonight.
The Canadian dollar is near 76.5 US cents today, driven lower by a stronger greenback and economic indicators at home. Thus, the buying power of a Canadian on vacation is that much less.
(Maybe you should have gone in early February - to the beach, skipping Mickey and without the kids - when the loonie was worth 81.5 US cents.)
So far today, the Canadian dollar has traded at between 76.4 and 76.7 US cents, having taken a sharp tumble Thursday.
Consider, for example, that on straight conversion, tickets for three days to the Disney World theme parks would cost just over US$405 for two adults and two kids. That would mean about $531.50 now, compared to $500 for the same price in early February.
And dinner at the Be Our Guest Restaurant for two kids and a family of four, assuming the children don't want a salad, would look like this:
Two garden salads, two pan-seared chicken breasts and dessert for the adults, and two Mickey Meatloafs and dessert for the kids would run about US$118, or around $154.28 today and $145 early last month.
(Don't believe me? Ask the dishes.)
"This is definitely a broad USD move as opposed to just a USD/CAD move," Bipan Rai, North American head of foreign exchange strategy at CIBC World Markets, said of the loonie's weakness, referring to the U.S. and Canadian dollars by their symbols.
"For catalysts, we'd point to incoming White House economic adviser Larry Kudlow's endorsement of a strong USD, along with some residual impact from the U.K./Russia diplomatic spat that's now involving Germany and the U.S.," he added.
That's how the rise in the U.S. dollar affected the loonie. But there were also fresh numbers Thursday from the Canadian Real Estate Association showing home sales across the country tumbling in February.
Sales fell 6.5 per cent from January, marking the second monthly decline in a row in the wake of new mortgage qualification rules from the Office of the Superintendent of Financial Institutions, the commercial bank regulator.
"Taken with the January decline, that's amongst the largest two-month decline in the series, and indicative that the effect of the new mortgage measures will present a headwind to growth in Q1," Mr. Rai said.
Read more
- Loonie still on death row despite ‘stay of execution’ on tariffs
- Home sales fall nearly 17% in February from a year ago
- A ‘softer Trump’ buoys the Canadian dollar (but that mercy means holding Ottawa hostage)
- Scott Barlow: Canadians are taking on less debt - and that’s bad news for the loonie
Markets at a glance
Factory sales drop
Canada's manufacturing sector suffered a January setback, with sales down 1 per cent.
Shipments fell in 14 of 21 industries, accounting for 56 per cent of the sector, led by a decline in durable goods, Statistics Canada said today.
In straight volume terms, sales slumped 1.1 per cent, falling in five provinces led by Ontario.
Inventory levels rose 0.9 per cent, unfilled orders 0.6 per cent, and new orders 0.1 per cent.
"The survey suggests that GDP data could look soggy to open the new year," Royce Mendes of CIBC World Markets said of the manufacturing data.
"Factory shipments could feel some benefit as U.S. tax cuts make their way through the American economy, but already elevated inventory levels and capacity constraints could limit the gains."
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Rich and richer
The number of multimillionaires in Canada is growing again after a few lean years. As are those best described as even multier.
And their ranks are forecast to expand even more, so you've still got a chance.
The number of Canadians worth US$5-million or more dipped last year to 76,720 from 84,510 five years earlier, according to the Knight Frank real estate consulting group. But the 2017 figure marked a rebound of 16 per cent from the number in 2016. What's more, Knight Frank expects more than 97,000 of those rich folks by 2022.
It's a similar story for those worth US$50-million or more, of whom there were less to begin with. Their ranks slipped to 5,500 last year from more than 6,000 in 2012, but still saw a rebound from 2016. And, who knows, if you're lucky you may be one of the almost 7,000 in the 50-plus group expected over the next five years.
We're talking about a really small group when we get into the category of US$500-million or more, just 270 people in 2017 compared with 300 five years earlier. (I know, it sucks to be one of those 30.) Again, the 2017 number was higher than that of 2016, and we can expect 340 by 2022.
Watch Canada's housing markets, too, though housing may be too simple a word here. Here's Knight Frank's look at luxury real estate, tracking "the performance of the world's leading prime second home and city residential markets."
"With global wealth flows and house prices rising in tandem, policymakers are walking a fine line between trying to attract investment at the same time as ensuring affordability for residents, reducing the risk of house price bubbles and maintaining tax revenue," Knight Frank said.
"In some markets, overseas buyers have borne the brunt of these measures; in others, domestic buyers have also had their wings clipped," the group added.
"In an era of low growth, the option of monetary tightening has largely been off limits for over a decade. Instead, cooling measures have become the go-to means of controlling price inflation, gradually eroding the notion of truly open markets."
Knight Frank noted the moves by British Columbia and Ontario to tax foreign buyers of real estate in certain areas.
The Fitch Ratings agency said just yesterday that it expects B.C.'s new housing affordability plan will at least slow the pace of increase in real estate prices, and probably "lead to a price correction," particularly in Vancouver.
"The new measures will make investing in the Vancouver housing market less attractive and reduce the number of foreign buyers and speculators interested in the Vancouver market," Fitch said.
"The high-end single family and condo markets in and around Vancouver, where foreign buyers and speculators tend to invest, will be the most impacted," it added, noting Canadian statistics that indicate foreign buyers own just 5 per cent of Vancouver properties.
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