Today
Futures are pointing to a higher open with key jobs data on both sides of the border coming in better than expected. In the U.S., November nonfarm payrolls reported higher than expected with 227k jobs being added compared to the estimate of 220k, while the prior reading was revised higher to 36k from 12k. A strong rebound number after a strike and storm-constrained October, however, the unemployment rate did tick up to 4.2%. Closer to home, Canadian employment increased by 50.5k, more than double the estimate of 25k, with all the jobs coming from the full-time side. Like the U.S., Canada’s unemployment rate also moved higher to 6.8% from 6.5%.
Just what we needed to hear. Global food prices have risen to an 19-month high, driven by significant increases in vegetable oil prices, which rose 24% YTD due to El Niño’s impact on palm oil production and higher biodiesel demand. Beef prices are also climbing, fueled by drought-induced cattle herd reductions in the U.S., while coffee and cocoa face volatility from adverse weather in Brazil and West Africa. Kids may get a brief reprieve to eat less healthily as fruits and vegetables are expected to see steep price hikes as U.S. trade policies, including tariffs on Mexico and Canada, threaten supply chains. Combined with supply-side constraints and geopolitical tensions, these factors are expected to sustain high food prices into 2025, putting pressure on consumers worldwide.
Donald Trump has shown his preference to use tariffs to “protect” the U.S. Last week, he surprised Canada and Mexico with a proclamation to apply a 25% tax on all imports on day 1 of his administration, in a bid to force both countries to spend more securing the borders. Just this past weekend, Trump threatened to impose 100% tariffs on the BRICS nations if they dared create an alternative to the U.S. dollar. Despite being in the early-stage conversations, that did not stop trump from using the tariff threat to warn BRICS of the ramifications in taking further steps. The Trump administration has shown its cards in how it plans to use tariffs to protect the U.S. – better trade terms, more border security, and in defense of the mighty dollar. Trump has made it clear that he will go to great lengths to protect the dollar’s status as the world’s reserve currency, saying in September that losing the dollar as the world’s currency would be akin to losing a war.
Speaking of tariffs, the move could further hinder a Canadian sector that depends on North American supply chains. Canadian automobile plants are set to produce about 1.3 million vehicles this year, the lowest level in decades outside the Covid pandemic, as US companies slowdown factories in the country amid slowing demand. To put it in perspective, in 2018, Canadian factories built more than 2 million cars and light trucks. Mexico is now the second-largest supplier of vehicles sold in Canada according to a Trillium Network for Advanced Manufacturing report, while Canadian plants have dropped to third, and the U.S. remains number one. While the threat of tariffs is concerning, this year’s drop in Canadian auto production has more to do with cooling demand for EVs. Ford’s only Canadian assembly plant near Toronto isn’t producing anything, as the manufacturer had planned a switch to EVs and now finds itself shifting its strategy again. A Stellantis factory in Brampton, Ontario, made its last Chrysler 300C sedan about a year ago, while a GM plant in Ingersoll, Ontario, is operating well under capacity, making electric commercial vans amid weak activity from buyers.
As a member of Trump’s transition team, Musk’s growing influence on the incoming administration is showing with the latest appointment. Crypto enthusiasts are cheering Trump’s appointment of David Sacks as the White House’s artificial intelligence and crypto policy chief. Sacks is a well-known venture capitalist and early Silicon Valley vocal supporter of Trump. He was an early executive at PayPal alongside Elon Musk, and previously invested in companies such as Facebook, Slack, SpaceX, and Uber. Sack’s venture capital firm has also invested in AI and crypto startups and has implored for a clearer legal framework for the crypto industry to grow under and will lead to more U.S. innovation. While Bitcoin hit the long awaited $100,000 Wednesday evening, its price has since eased and back below the milestone.
A new report from Royal LePage forecasts a 6% annual increase in Canadian home prices by the end of 2025, with the aggregate price expected to reach $857k, driven by improving buyer activity amid lower interest rates and favourable mortgage policy changes. Detached homes are set to see a 7% annual price rise, while condominiums are projected to increase by 3.5% annually. Recent BoC rate cuts and new federal policies, including higher insured mortgage caps and extended mortgage terms, are spurring market activity, especially in high-cost areas like Toronto and Vancouver. Quebec City, Edmonton, and Regina are expected to experience the largest percentage price gains, with double-digit annual growth in some cases. The strongest price increases are anticipated in early 2025, with more moderate growth in the latter half.
Former queen of the hill, Lindsey Vonn is looking to make a comeback from retirement at age 40, competing for the first time in 6 years this weekend. Vonn made the official announcement last month, and her first race will be lower-level FIS downhills and super-Gs on Saturday and Sunday, respectively, in Copper Mountain, Colorado. Vonn is a three-time Olympic medalist, including a downhill gold at the 2010 Vancouver Games. Her 82 World Cup race victories stood as the record for a woman until that total was eclipsed in January 2023 by fellow American Mikaela Shiffrin, who is still active and is now up to 99 wins, more than any Alpine ski racer in the history of the sport.
Diversion: That was close
