Top headlines: PBO warns Canada’s economy will stagnate and deficit will soar

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4:35 p.m.

Market close: TSX posts small loss, U.S. markets mixed

Canada’s main stock index stepped lower as broad-based weakness led by technology, battery metals and utilities outweighed energy gains, and U.S. markets were mixed amid losses in technology.

The S&P/TSX composite index closed down 37.38 points at 19,462.86.

In New York, the Dow Jones industrial average was up 39.15 points at 33,670.29. The S&P 500 index was down 21.83 points at 4,327.78, while the Nasdaq composite was down 166.99 points at 13,407.23.

The Canadian Press

Read more: Here are the top 3 performers and the biggest losers on the TSX for the week

3:42 p.m.

Barclays to name Geoffrey Belsher as new Canada CEO after Jefferies exodus

Barclays Plc is poised to name veteran Canadian investment banker Geoffrey Belsher as its new chairman and chief executive for Canada.

Belsher, who previously held senior roles with Canadian Imperial Bank of Commerce and Lehman Brothers in Canada, starts the new job on Monday, according to a statement seen by Bloomberg.

His appointment comes after several bankers including Bruce Rothney, the previous Barclays Canada CEO, left for Jefferies Financial Group’s Canadian unit in recent months, according to people familiar with the matter. A number of others including financial services analyst John Aiken also left to join Jefferies. The Globe and Mail was first to report those departures. Spokespeople for Jefferies and Barclays declined to comment.

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Belsher will be based in Toronto and report to Richard Haworth, Barclays’ CEO of the Americas, as well as co-heads of investment banking Cathal Deasy and Taylor Wright.

Barclays has been in Canada for almost a century and it “continues to be a critical market for us as we execute on our ambitious growth plans in the Americas,” Haworth said in the statement. “Geoffrey’s focus, leadership experience, and deep expertise in the Canadian market makes him an ideal choice for this role, and I’m confident that our talented colleagues in Canada will benefit enormously from his guidance and counsel.”

Bloomberg

3:16 p.m.

Business groups applaud Supreme Court ruling against federal environmental impact law

Business groups in Alberta are celebrating the Supreme Court of Canada‘s decision that ruled the federal government’s impact assessment law is largely unconstitutional.

The Business Council of Alberta says the decision is highly positive, and will improve the predictability of major project development in this country.

The Independent Contractors and Businesses Association says it is thrilled by the ruling, calling it an “unequivocal victory for Canada’s economy and workers.”

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The Canadian Press

2:21 p.m.

Bank regulator outlines expanded risk guidelines to include integrity, security

Canada’s banking regulator has released draft guidelines on how it expects to oversee areas of risk that go beyond the financial health of institutions.

The guidelines released by the Office of the Superintendent of Financial Institutions (OSFI) cover areas of integrity and security, including foreign interference, and come as a result of the federal government expanding the regulator’s mandate in June.

OSFI assistant superintendent Tolga Yalkin says the widened risk oversight is an important part of maintaining public confidence in financial institutions and how they operate.

The guidelines for integrity include things like ensuring the “good character” of board members and senior leadership, while security includes areas like managing physical access to buildings, servers and other key infrastructure.

Yalkin, speaking at an online press briefing, said the increased oversight into areas that aren’t directly related to finances is part of an ongoing evolution of the regulator, as it is already expanding oversight into areas such as climate change and digitization-related threats.

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He says the regulator is also expanding its expectations on compliance with rules so that financial institutions comply not just with the letter of the laws, but with their spirit.

The Canadian Press

1:40 p.m.

PBO warns Canada’s economy will stagnate and deficit will soar

The parliamentary budget officer says higher interest rates will lead the economy to stagnate in the second half of the year and the federal deficit will rise significantly this fiscal year.

The PBO released its economic and fiscal outlook today, providing updated projections for the economy and federal finances as high interest rates weigh on growth.

The budget officer also says it expects consumer spending to remain weak in the second half of 2023 and throughout the first half of 2024.

Faced with slower growth in government revenues and higher expenses, the federal deficit is projected to rise to $46.5 billion in 2023-24, up from an estimated $38.7 billion for 2022-23.

The PBO assumes the Bank of Canada will hold its key interest rate at five per cent and begin cutting rates in April 2024.

Its inflation forecast anticipates a return to two per cent inflation by the end of next year.

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The Canadian Press

12:21 p.m.

Midday markets: TSX flat in late-morning trading, U.S. stock markets mixed

Canada’s main stock index struggled to find direction in late-morning trading, while U.S. stock markets were mixed.

The S&P/TSX composite index was down 0.65 of a point at 19,499.59.

In New York, the Dow Jones industrial average was up 57.83 points at 33,688.97. The S&P 500 index was down 11.07 points at 4,338.54, while the Nasdaq composite was down 112.73 points at 13,461.49.

The Canadian Press

12 p.m.

Canada’s rent inflation rate reaches 9-month high, study says

A new report by Rentals.ca and Urbanation says the average asking price for a rental unit in Canada reached $2,149 last month, marking an 11.1 per cent jump from the same period a year ago.

The data, which analyzes monthly listings from the Rentals.ca network, shows Canada reached a nine-month high for the annual rate of rent inflation, while rents also rose 1.5 per cent from August.

The average cost of a one-bedroom unit in September was $1,889, up 9.7 per cent from the same month in 2022, while the average asking price for a two-bedroom was $2,342, up 9.5 per cent annually.

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Vancouver leads the way as Canada’s priciest city for renters, with the average one-bedroom unit listed at $2,976 and a two-bedroom at $3,908, followed by nearby Burnaby, B.C.

Toronto ranks third at $2,614 for a one-bedroom and $3,411 for a two-bedroom.

The report says that while rent increases remained strong in most major markets last month, the annual rate of rent growth “slowed substantially” in Toronto, possibly signalling a broader moderation for rent inflation in the months ahead as the economy cools.

The Canadian Press

11:21 p.m.

Bank of Canada’s Tiff Macklem says rate hikes still on table as global volatility rises

Bank of Canada Governor Tiff Macklem says higher interest rates are working to bring down inflation, but with new geopolitical unrest in the Middle East and core inflation proving “sticky,” he did not rule out further rate hikes.

“The fight against inflation is not over,” Macklem said from Marrakesh, Morocco, where he is convening with international counterparts at International Monetary Fund meetings. “We need to be prepared for ongoing volatility.” Read on for more details.

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Barbara Shecter

10:31 a.m.

CREA lowers home price forecast after September dip in sales and prices

The Canadian Real Estate Association (CREA) is lowering its average home price forecast due to slowdowns in B.C. and Ontario.

The average home price is now expected to decline by 3.3 per cent to $680,686.

In July, CREA had hiked the home price forecast to $702,409 — nearly flat with 2022 levels — after a stronger-than-expected spring season. Read more.

Shantaé Campbell

10:00 a.m.

Markets are open: Stocks bounce back

Stocks are bouncing back this morning on solid earnings from some of the largest U.S. banks.

JPMorgan Chase & Co. posted another quarter of record net interest income and boosted its forecast for the year. Wells Fargo & Co. beat analysts’ expectations for net interest income and raised its guidance. Citigroup Inc. rates and currencies traders posted their best third quarter in at least eight years.

The TSX was up almost 130 points.

Bloomberg and Financial Post

9:48 a.m.

Supreme Court rules against Ottawa’s environmental law

A law passed by Prime Minister Justin Trudeau’s government to review major resource and infrastructure projects was largely struck down by Canada’s top court, which ruled it intrudes on provinces’ jurisdiction.

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The law, known as the Impact Assessment Act, had been opposed by Canada’s oil industry, which argued that it increased the complexity of the approval process for major projects like pipelines and gave too much weight to input from parties that aren’t directly affected by the projects.

While a portion of the law that applies to federal projects is constitutional and can be separated from the remainder of the law, the bulk of the measure “exceeds the bounds of federal jurisdiction” and “intrudes more than incidentally into the provinces’ sphere,” the Supreme Court of Canada ruled. Read on for more details.

Bloomberg

9:27 a.m.

Aimia to raise up to $32.5 million, names new directors and board chair

Aimia Inc. signed a deal to raise up to $32.5 million in a private placement of shares and warrants that will be used to fund operations and support its strategic investment plans.

The deal comes as the company faces an unsolicited takeover offer by its largest shareholder. Mithaq Canada Inc., a wholly-owned subsidiary of Mithaq Capital SPC, has offered $3.66 per share in a bid to take Aimia private.

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Under the private placement announced before markets opened Friday, Aimia says it will issue up to 10,475,000 shares together with up to 10,475,000 share purchase warrants. Each share and accompanying warrant will be issued at $3.10 and each warrant will be exercisable at $3.70 per share.

Shares in Aimia, which sold its flagship Aeroplan loyalty program to Air Canada in 2019 and reinvented itself as an investment holding company, closed up seven cents at $3.52 on the Toronto Stock Exchange on Thursday.

The company says that assuming the private placement is fully subscribed and all the warrants are exercised, the maximum number of shares issuable under the private placement represents 24.89 per cent of its currently issued and outstanding shares on an undiluted basis.

In connection with and subject to the closing of the private placement, Aimia says it will appoint Thomas Finke and Yannis Skoufalos as independent directors. Finke will also be named chair of its board.

The Canadian Press

9:16 a.m.

JPMorgan posts another record, boosts guidance

JPMorgan Chase & Co. posted another quarter of record net interest income and boosted its forecast for the year as the company benefits from higher interest rates and its purchase of First Republic Bank.

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Net interest income was US$22.9 billion in the three months through Sept. 30, above analysts’ expectations. The biggest U.S. bank said it now expects to generate US$88.5 billion from the revenue source this year.

“We acknowledge that these results benefit from our over-earning on both net interest income and below normal credit costs, both of which will normalize over time.,” chief executive Jamie Dimon said in a statement. Dimon warned that the wars in Ukraine and the Middle East could have far-reaching consequences. “This may be the most dangerous time the world has seen in decades,” he said.

JPMorgan’s results mirror similar gains at Wells Fargo & Co., which reported Friday that net interest income — the difference between what a bank earns on loans and the amount it pays out on deposits — also topped estimates. The third-quarter reports offer the latest look at how U.S. consumers and businesses are faring as the United States Federal Reserve leaves borrowing costs higher for longer than most economists had predicted.

Bloomberg

7:30 a.m.

Canadian pension funds mull selling stake in Chile’s Transelec

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Canadian pension funds including Canada Pension Plan Investment Board are considering selling their stakes in Chile’s biggest power-transmission company Transelec SA, seeking a combined US$3 billion, sources told Bloomberg.

CPPIB, British Columbia Investment Management Corp. and Public Sector Pension Investment Board are in the early stages of evaluating a potential sale of their roughly 72 per cent stake in the Santiago-based utility, the people said, asking not to be identified because the matter is private.

Read more

Bloomberg

Stock markets: Before the opening bell

Stocks are falling and oil prices are rising this morning on deepening concern over the Israel-Hamas war.

Treasuries rallied as investors turned to havens on signs Israel is preparing for a ground invasion of Gaza.

U.S. futures edged lower, auguring more losses after a retreat Thursday driven by rising bond yields.

Here are Thursday’s top 3 performers on the TSX with Spin Master on top again

Bloomberg and Associated Press

What to watch today

We’ll get a fresh look at the state of the housing market this morning with the release of existing home sales data and the MLS Home Price Index for September.