Jan. 18, 2019

CANADA

  • National Bank Financial Banking Sector Review (January 13, 2019)
    • Mortgage growth slowed sharply in 2018, November was a 20 year low, due to higher interest rates and stricter regulations
    • Higher loan loss reserves are expected, particularly in the oil and gas loan book
    • Banks are focusing on buying back their own shares and maintaining dividend policy
    • Banks are investing internally to improve efficiencies (especially technology)
  • Canadian housing prices are stagnant at best. Edmonton housing prices are down 5.6% from the peak in 2007, Calgary down 5.4% from 2014, Toronto down 4% from 2017, Vancouver down 2.8% from July 2018.
  • Canada’s December CPI rose 2% Y/Y vs 1.7% Y/Y in November.
    • Lower energy prices were offset by higher prices for air transportation, phone services, travel tours
  • Nearly 60% of Canadians say the lack of new pipeline capacity is a ‘crisis’. The majority of Canadians ages 18-34 were not supportive of pipelines.

CLIMATE CHANGE

  • World Economic Forum says climate and cyber are 2019 top world concerns.
  • Some wind power companies have brought power generation costs down to $0.02 – $0.04 per kWh. Each turbine now generates 3.3 MW vs 1MW several years ago.
  • Alberta wants 30% of its electricity to come from renewable resources by 2030.
  • California’s wildfires now burn all year as global warming has intensified cyclical droughts.
  • Germany’s Rhine waterway (critical to moving coal, car parts, food, and thousands of other goods) risks becoming too shallow for barge traffic because of prolonged droughts.
  • Jeremy Grantham, veteran money manager, is devoting 98% of his net worth (approx. $1 billion) to help win the race against climate change.

CHINA

  • China has offered to go on a 6 year buying spree to ramp up imports from the US and to eliminate the US trade imbalance. US officials want the gap closed sooner.
  • China’s Central Bank injected a record $83 billion into the financial system to support the economy.
  • China is pushing to have their farming sector fully-automated within 7 years.

TIDBITS

  • More than 100 First Nations are considering 4 ownership modes to purchase the TransMountain Pipeline.
  • International Energy Agency says 2019 global oil demand to expand 1.4 million boe/d (1.4%).
  • US December home sales fell 11% and prices rose 1.2%.
  • Annual car sales in Europe dropped for the first time since 2013; China’s car sales are down for the first time since 1998.
  • Volkswagen is investing $800 million with Ford to build a new electric vehicle plant in Tennessee.
  • US now says all online gambling is illegal, not just sports bets.