Daily Pulse
One of our most accessible tools, this daily comment keeps you abreast of developments on the North American and international financial markets.
Michel Doucet
Vice-President and
Portfolio Manager
May 16, 2024
Canada
Canada’s housing starts fell for a second consecutive month as the country’s construction shortfall continues. Builders started work on an annualized 240,229 units in April, according to data released Wednesday by the Canada Mortgage and Housing Corp. The 0.8% monthly drop brings the six-month moving average to 238,585 units, the weakest half-year stretch for home building since last June. Construction was split between 53,900 single detached and 186,300 multiple units in April, CMHC says. Regionally, starts fell 0.8% in Ontario, the country’s largest province. Quebec and British Columbia recorded declines of 13% and 11% respectively. CMHC estimates Canada needs to build at least 3.5 million additional housing units by 2030 to restore affordability. Prime Minister Justin Trudeau has set a goal of doubling the pace of construction to build 3.9 million homes by 2031. While there was a wave of supply in the existing housing market in April, that wasn’t the case in new building.
United States
A measure of underlying US inflation cooled in April for the first time in six months, a small step in the right direction for Federal Reserve officials looking to start cutting interest rates this year. The so-called core consumer price index, which excludes food and energy costs, increased 0.3% from March, according to government data out Wednesday. From a year ago, it advanced 3.6%. That overall CPI climbed 0.3% from the prior month and 3.4% from a year ago, Bureau of Labor Statistics figures showed. Shelter and gasoline accounted for over 70% of the increase, the BLS said in the report. While the figures may offer the Fed some hope that inflation is resuming its downward trend, officials will want to see additional readings to gain the confidence they need to start thinking about cutting interest rates. Chair Jerome Powell said Tuesday the central bank will “need to be patient and let restrictive policy do its work,” and some policymakers don’t expect to cut rates at all this year
Separately, retail sales stalled in April, surprising analysts who were looking for a healthy increase. Momentum in headline retail sales slowed sharply from the heady growth seen in February and March, registering a flat reading in April. Moreover, core retail sales, which excludes food services, gasoline, building materials and autos, contracted by 0.3%. Weakness was relatively broad based, with a number of categories posting declining sales. Household spending has been a major contributor to overall economic growth in recent quarters. But retail sales data for April suggest that some fatigue is setting in, which should lower GDP tracking estimates for the second quarter.
Europe
Vladimir Putin met Xi Jinping in Beijing. Xi said China is prepared “to consolidate the friendship between the two peoples for generations to come.”
Slovak PM Robert Fico’s condition has “stabilized for now” after yesterday’s shooting, Defense Minister Robert Kalinak said.
Asia
China plans to hold a meeting with key officials tomorrow to discuss the property market, including a proposal to clear excess inventory, people familiar said. The country’s real estate stocks jumped.
JD.com Inc. reported a 7% rise in revenue after it slashed prices and ramped up shopper perks to counter fierce market competition and a Chinese downturn. That topline growth accelerated from 3.6% in the previous quarter. Net income rose 13.9%. JD.com’s results are seen as one of the key bellwethers of Chinese consumption, which has struggled to recover since the country lifted nearly three years of Covid curbs.