Today’s news: Trending business stories for November 21, 2023

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1:52 p.m.

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Your ‘priorities are backwards,’ Bell tells CRTC during Online Streaming Act hearing

Bell Media owner BCE Inc. wants the national broadcasting regulator to create a news fund that would provide financial assistance to broadcasters and require foreign streamers to contribute to the subsidy through their Canadian content spending.

Bell representatives told a CRTC panel Tuesday that the commission should simultaneously exempt Canadian streaming platforms such as Crave from those new obligations until traditional broadcasters receive regulatory relief.

The hearing, which began Monday and is set to last three weeks, is part of the CRTC’s public consultations in response to Bill C-11, the Online Streaming Act, which came into force in April.
It seeks to determine what contributions traditional broadcasters and online streaming services will need to make to support Canadian and Indigenous content.

But Bell says the CRTC’s “priorities are backwards” amid a crisis for Canadian broadcasters that have experienced declines in revenue while also competing with new digital platforms that don’t face the same regulatory burdens.

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The commission is also scheduled to hear today from Google LLC after a presentation on Monday by Quebecor Inc.

The Canadian Press

12:49 p.m.

Airfares fall 19% amid more flights, less demand

Statistics Canada says airfares have plummeted over the past year, as airlines shore up capacity even while consumers think twice about travelling in a world of higher costs.

In its consumer price index release on Tuesday, the agency says the price of air transportation dropped 19.4 per cent last month compared with October 2022.

The figure follows a 21 per cent year-over-year drop in September and a 20 per cent decrease in August, after rampant post-pandemic demand last year outstripped carriers’ capacity to meet it, resulting in sky-high fares.

The data also showed airfares declined four per cent on a monthly basis in October, when they typically rise ahead of the holiday season.

The travel sector continued to roar back this year, with seat capacity among big Canadian carriers at 92 per cent of 2019 levels, according to figures from aviation data firm Cirium.

But experts say customers are now curtailing travel plans in response to strained purse strings and nearly two years of high inflation, even as airlines increase flight volumes and try to lure Canadians back on board with lower prices.

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The Canadian Press

Noon

Midday markets: U.S. markets hang on Nvidia earnings

Stocks lost steam after a rally that put the market on pace for its best month since July 2022, with traders awaiting the United States Federal Reserve minutes and Nvidia Corp.’s results. Bonds rose and the dollar wavered.

The S&P 500 dropped from “overbought” levels and the Nasdaq 100 fell about one per cent. As the earnings season winds down, questions on the sustainability of the advance led by the “Big Seven” group of megacaps have resurfaced, with Nvidia declining from a record. The bar was set high for the world’s most-valuable chipmaker, whose shares have more than tripled this year — leaving little room for error.

Some US$6 trillion in market capitalization has been added to the U.S. equity benchmark in 2023 in a rally fuelled by the artificial intelligence boom, Corporate America’s resilience and bets the Fed will pivot to rate cuts next year. The gains left the index about five per cent away from reclaiming its all-time high.

“The stock market is once again priced for perfection,” said Matt Maley, chief market strategist at Miller Tabak + Co. “Maybe Nvidia’s earnings will be ‘perfect’ enough to push things even higher. However, since the stock market is more ‘overbought’ right now — than it was ‘oversold’ three weeks ago — investors will need to remain very nimble as we move through the end of November and into December.”

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On Wall Street, the S&P 500 was down 0.27 per cent at 4,534.97. The Dow Jones industrial average fell 0.22 per cent at 35,074.49 while the Nasdaq composite fell 0.44 per cent at 20,158.30.

In Toronto, the S&P/TSX composite index was down 0.43 per cent at 20,158.52.

The Canadian dollar traded for 73.01 cents U.S. compared with 72.85 cents U.S. on Monday.

The January crude contract was down 0.66 per cent at US$77.32 per barrel and the January natural gas contract was unchanged at US$3.05 per mmBTU.

The December gold contract was up 1.15 per cent at US$2,003.10 an ounce and the December copper contract was down a penny at US$3.81 a pound.

10:30 a.m.

Germany budget chaos blocks EV plant subsidies, puts green energy overhaul at risk

Germany’s emergency spending freeze is blocking funds for next-generation auto-industry and steel plants, jeopardizing the push to re-engineer Europe’s economic engine.

Berlin halted new spending authorizations this week after Germany’s top court ruled that some €60 billion (US$65.7 billion) can’t be transferred into a green-technology fund. The money was earmarked for a range of projects including decarbonizing steel production and major semiconductor works led by Intel, TSMC and Infineon.

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Sweden’s Northvolt AB was also due to receive part of pledged subsides from the climate fund for an EV battery plant in northern Germany, according to two people familiar with the situation.

The bombshell court ruling, catching the government seemingly unprepared, is putting Germany in danger of falling behind in the global race for green technologies, according to Claudia Kemfert, professor of energy economics at the DIW research institute in Berlin.

We “have already lost large parts of this competition, and now we are also in danger of losing it in electromobility, digitization and green hydrogen for heavy industry,” Kemfert said. “This is particularly painful as Germany gave the go-ahead for the energy transition 20 years ago and was the global market leader for many years.”

Bloomberg

Read the full story here.

9:45 a.m.

Markets are open: Stocks slide in early trading

Wall Street is slipping in early trading, a rare drop following a rally that vaulted it to the highest level since the start of August. The S&P 500 was 0.3 per cent lower in the early going Tuesday. The Dow fell 59 points, and the Nasdaq composite was off 0.6 per cent.

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In Canada, the S&P/TSX composite index was down 1.11 per cent at the open.

The Associated Press, Financial Post

8:30 a.m.

Inflation cools to 3.1% in October as gas prices ease

The inflation rate slowed to 3.1 per cent on a year-over-year basis, down from 3.8 per cent in September, as the price of gasoline fell, Statistics Canada said Tuesday.

The price drivers paid for gasoline in October fell 7.8 per cent from a year earlier compared with a 7.5 per cent increase in September, driven partly by a spike in gasoline prices in October 2022 after OPEC announced production cuts.

Excluding gasoline, Statistics Canada said the consumer price index was up 3.6 per cent for October, following a 3.7 per cent increase for September.

Prices for goods were up 1.6 per cent, while prices for services were up 4.6 per cent, largely driven by higher prices for travel tours, rent and property taxes and other special charges.

The largest contributors to inflation continued to be mortgage interest costs, food purchased from stores and rent.

Mortgage interest costs were up 30.5 per cent compared with a year ago, while the cost of rent was up 8.2 per cent.

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While grocery prices rose faster than overall inflation, Statistics Canada said the pace continued to slow. Grocery prices were up 5.4 per cent year-over-year in October compared with a 5.8 per cent move higher in September.

The Canadian Press

7:30 a.m.

OpenAI in ‘intense discussions’ after staff threaten mutiny over Sam Altman’s ouster

OpenAI said it’s in “intense discussions” to unify the company after another tumultuous day that saw most employees threaten to quit if Sam Altman doesn’t return as chief executive.

Vice president of Global Affairs Anna Makanju delivered the message in an internal memo reviewed by Bloomberg News, aiming to rally staff who’ve grown anxious after days of disarray following Altman’s ouster and the board’s surprise appointment of former Twitch chief Emmett Shear as his interim replacement.

OpenAI management is in touch with Altman, Shear and the board “but they are not prepared to give us a final response this evening,” Makanju wrote.

The memo from Makanju doesn’t elaborate on the extent of contact with Altman, and the former CEO didn’t respond to a request for comment outside regular business hours.

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“We are continuing to go over mutually acceptable options and are scheduled to speak again tomorrow morning when everyone’s had a little more sleep,” Makanju wrote. “These intense discussions can drag out, and I know it can feel impossible to be patient.”

She added a word of reassurance for employees: “Know that we have a plan that we are working toward.”

Bloomberg

Read the full story here.

Before the opening bell: Stocks waver

United States equity futures wavered on Tuesday as some investors questioned the sustainability of a powerful rally fuelled by expectations of a U.S. Federal Reserve pivot to rate cuts.

Goldman Sachs Group Inc. strategists said there is a risk of “disappointment in the near term” amid lingering concerns about economic growth and inflation, after the S&P 500 surged to its strongest close since August and the Nasdaq 100 hit a 22-month high on Monday. Citigroup Inc. strategists warned of the possibility of a short squeeze that could derail the momentum.

“Despite a more certain outlook regarding peak rates and potential cuts in 2024, there are few upside catalysts,” said Liberum strategist Susana Cruz. “Corporate guidance was pretty soft during this earning season, forecasts for the fourth quarter have fallen and we will probably see more downgrades. That’s why we expect equities to experience a soft patch in the first half of 2024.”

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Contracts on the S&P 500 and Nasdaq 100 were little changed.

In Canada, the S&P/TSX composite index closed up 70.70 points at 20,246.47.

Bloomberg

What to watch today

The inflation reading for October is out this morning. Economists expect the data to show inflation cooled on lower gas and food prices. Other data releases include the new housing price index for October, and in the United States, existing home sales.

Finance Minister Chrystia Freeland will table the Liberal government’s fall economic update this afternoon. Economists expect more spending on housing, but say Ottawa must find a delicate balance on spending as the economy slows.

The United States Federal Reserve Open Market Committee releases meeting minutes for its Nov. 1 interest rate decision at 2 p.m. ET.

Expect earnings reports from George Weston Ltd., Nvidia Corp. and Lowe’s Companies Inc.

Need a refresher on yesterday’s top headlines? Get caught up here.

Additional reporting by The Canadian Press, Associated Press and Bloomberg

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