Here are five things you need to know this morning:
GST relief took a bite out of inflation: Canada’s inflation rate came in at 1.8 per cent in the year up to December, lower than the 1.9 per cent clocked in November. Statistics Canada reported this morning that the temporary GST holiday the government implemented last month had a major impact on the figures, with about 10 per cent of all items in the consumer price index basket being impacted by the new policy. Items like food, alcohol, toys and games, and children’s clothes were included in the tax break, so it’s perhaps no surprise that they were major factors to the downside. Food purchased from restaurants declined by 4.5 per cent during the month, the biggest monthly decline on record for that category, and a major reason for the 1.6 per cent annual decline. Prices for booze fell by 4.1 per cent during the month, almost tripling what had previously been the largest monthly decline recorded for the series in December 2005 at 1.4 per cent. Prices for toys and games decreased 7.2 per cent year over year in December 2024, down from a 0.6 per cent decline in November while the children’s clothing index fell 10.6 per cent in December compared with the same month in 2023.
Tariff relief rally was short lived: After breathing a sigh of relief on Monday after Donald Trump elected not to bring in his threatened 25 per cent tariff on Canadian goods immediately, all those fears came rushing back when the newly minted U.S. president announced he still fully intends to move ahead with the plan, as soon as February 1. The loonie is off by more than half a cent this morning as markets digest the news. The exact permutations are still far from clear, but all of them add up to bad news for an export-dependent Canadian economy. We’ll have plenty of coverage on what it all means throughout the day and in the days and weeks ahead.
NFI subsidiary inks bus deal with Metrolinx: TSX-listed NFI Group has announced that one of its subsidiaries, Motor Coach Industries, has secured a five-year contract with Ontario’s transportation agency Metrolinx for a fleet of buses. Metrolinx has made an initial firm order of 80 45-foot D45 diesel buses, with the option for more. NFI currently supports a fleet of 100,000 buses around the world, with more than 9,100 employees in 10 countries.
Apple sees downgrade on weak Chinese iPhone sales: We will be watching shares of Apple today as the tech giant has been downgraded by Jefferies and other analysts on a weak sales outlook from China. Shares are off by 2.1 per cent premarket on a report that iPhone sales dove by 18 per cent in December. Jefferies analyst Edison Lee cut his rating to underperform from hold saying he expects the company to miss its own estimates. His new price target is just over US$200 a share, which is a 13 per cent decline from their current level. Loop Capital analyst Ananda Baruah also cut her recommendation on Apple to hold from buy, citing “material demand reduction ahead of iPhone 17.”
3M shares popping on improving outlook:
We will also keep an eye on shares in 3M as the stock is up in premarket trading after the company raised its profit outlook to a range higher than analyst expectations. 3M shares have been rising since July when CEO William Brown announced a turnaround plan that involved cost cutting. So far that plan seems to be going well, and the company has managed to boost its product pipeline to boot.
