December 23, 2021
What's Happening Today - Dec. 23
I’m going to be brief today (cue the applause), as everyone seems to be far more interested in the upcoming Christmas break than reading about the purchasing managers index in Zaire. Having said that…
Hot off the press from our economic department, Canadian GDP grew at a solid clip in October, and advance data showed a further, albeit more modest, increase in November despite the flooding that hit BC during that month. October saw a 0.8% rise in GDP, which was in line with the advance estimate and consensus expectations. That came off the back of a slightly upwardly revised 0.2% gain in September (previously +0.1%). Growth in October was broad-based, with the largest single contribution coming from the manufacturing sector which rebounded following a prior month's decline. The advance estimate for November showed an increase in GDP of 0.3% which, while a little disappointing relative to industry data received in the past week, is still a solid result given the flooding seen in BC during the second half of the year. Statistics Canada noted that accommodation & food services, and arts & entertainment were two areas leading growth in November, both of which will have been impacted by the recent Omicron surge and retightening of restrictions. For Q4 as a whole, even after accounting for a potential, modest pullback in December, GDP is still running modestly ahead of the Bank of Canada's 4% forecast contained within the October MPR albeit probably not by enough to change the timing for the output gap closing and the first interest rate hike.
I know it is early but I believe the term is “Santa Claus Rally” as markets are gaining for the third straight day. The S&P500 has erased the losses of the last week and is now trading in record closing territory. The DOW has crossed the 36k barrier again and the TSX is up another .65% in early trading. Just a reminder that U.S. markets are closed tomorrow and the TSX closes at 10:00 am PST. Technically the Santa Claus Rally encompasses the three or four trading days of the year after Christmas and the first two of the new year, and the prognosticators at CNBC were happy to point out the average rise is 1.4% over the last 40 years…
In local news, Mike will be taking a break over the Christmas holidays. Not to worry though, the team will be on deck for the three market days next week should anything need to be addressed.
Stay safe and have a Merry Christmas,