Want to consume marijuana and want a quick hit but don’t want to smoke? Consider a tincture or oil.
More people are using cannabis to relax, to sleep, or for medical reasons. It has become popular with all ages and all over the country. But for those new to it and don’t want to smoke or vape, there is an alternative other than edibles. Cannabis tinctures and oils offer a discreet and precise way to consume marijuana, providing fast-acting effects and easy dosing. Discreet and odorless consumption, precise dosing, adjustable timing, a long shelf life and low-calorie alternative to edibles. Here are the basics on using marijuana tinctures and oils.
Select a tincture based on your desired effects. CBD-dominant tinctures offer relaxation benefits with minimal psychoactive effects. THC-dominant tinctures provide stronger psychoactive effects. Balanced THC:CBD ratios offer a combination of benefits
Proper dosing is crucial when using cannabis tinctures or oils. Start with a low dose, especially if you’re new to cannabis or the specific tincture. Begin with 1-3 drops and wait at least an hour to assess the effects. Gradually increase the dose if needed, but do so cautiously. Remember that individual responses to cannabinoids vary based on factors like body weight, tolerance, and the tincture’s potency.
Photo by Tinnakorn Jorruang/Getty Images
The most common and efficient method of using a cannabis tincture is sublingual administration:
Shake the tincture bottle well before use.
Using the dropper, place the desired dose under your tongue.
Hold the liquid there for 60-90 seconds without swallowing
After holding, swish the remaining tincture around your mouth before swallowing.
This method allows for rapid absorption through the sublingual blood vessels, resulting in faster onset of effects compared to oral ingestion. You can expect to feel the effects within 15-30 minutes, lasting for up to 3 hours.
You can also swallow the tincture directly or mix it with food and beverages:
Add the desired dose to your favorite drink or food item.
Consume the mixture as you normally would.
When ingested orally, effects may take up to an hour to manifest but can last up to 4-6 hours. This method is ideal for those who dislike the taste of tinctures or prefer a more gradual onset of effects.
Despite these setbacks, CPKC posted an income gain of 7% year over year. The four categories that made the most impact were grain, energy, plastics and chemicals, and they grew revenues by 11%. CPKC says the shipment of wheat to Mexico from the Canadian and American Prairies over the past 12 months was exactly the type of “synergy win” that it was hoping for when the former Canadian Pacific acquired Kansas City Southern back in 2021. This railway remains the only one to span Canada, the United States and Mexico.
CNR CEO Tracy Robinson commented on the railway’s operational challenges. “Our scheduled operating plan demonstrated its resilience in the third quarter, allowing us to adapt our operations to challenges posed by wildfires and prolonged labor issues,” she said. “Our operations recovered quickly and the railroad is running well. As we close 2024, we will continue to focus on recovering volumes, growth, and ensuring our resources are aligned to demand.”
CNR’s revenues were up 3% year over year; however, increased expenses meant the company’s operating ratio rose 1.1% to 63.1% (indicating that expenses are growing as a share of revenue). The railway announced it was raising its quarterly dividend from $0.79 to $0.845. This raise of nearly 7% is right in line with CNR’s mission to conservatively raise its dividend payouts each year.
Thursday’s revenue miss left some Rogers shareholders shaking their heads.
Rogers earnings highlights
Here’s what the large mobile company reported this week:
Rogers Communications (RCI/TSX): Earnings per share of $1.42 (versus $1.34 predicted) and revenues of $5.13 billion (versus $5.17 predicted).
While solid earnings numbers did take away some of the sting, Rogers’ share price was down 3% on Thursday. Lower-than-expected numbers for new wireless customers were at the root of low revenue growth. The oligopolistic Canadian wireless market remains uncharacteristically competitive as Rogers, Telus and Bell all continue to fight for market share. That competition is hurting profit margins for all three telecommunications giants at the moment. (Unlike in past years, when the three telcos all enjoyed charging some of the highest wireless plan fees in the world.)
One highlight for Rogers was its sports revenue vertical, which was up 11% from last quarter. Rogers has really doubled down on its sports media strategy over the last few years and now owns a controlling share of the:
Toronto Blue Jays in the Major League Baseball league (MLB)
Toronto Maple Leafs in the National Hockey League (NHL)
Toronto Raptors in the National Basketball Association (NBA)
Toronto FC in Major League Soccer (MLS)
Toronto Argonauts in the Canadian Football League (CFL)
SportsNet, a major Canadian sports network
Toronto’s Rogers Centre and Scotiabank Arena venues
Naming rights of sports venues in Edmonton, Toronto and Vancouver
National NHL media rights in Canada
Local media rights to the NHL’s Vancouver Canucks, Calgary Flames and Edmonton Oilers
Partial local media rights to the Maple Leafs and Raptors
Several minor-league franchises and esports (gaming) teams
Despite owning all those household-name sports assets, it’s worth noting that Rogers’ wireless and cable divisions were responsible for close to 90% of revenues, with sports and media making up the rest.
Netflix (NFLX/NASDAQ) shareholders were happy on Thursday, as they saw share prices rise 5% in after-hours trading on the back of another excellent earnings announcement. (All figures in U.S. dollars.) Earnings per share came in at $5.40 (versus $5.12 predicted) and revenues were $9.83 billion (versus $9.77 billion predicted).
Paid memberships also topped expectations, at 282.7 million, compared to the 282.15 million predicted by analysts. Netflix chalked up the increase in viewers to new hit shows such as The Perfect Couple, Nobody Wants This and Tokyo Swindlers, as well as new seasons of favourites Emily in Paris and Cobra Kai. Looking ahead to the next quarter, Netflix is banking on the new season of Squid Game and its foray into the world of live sports. Two National Football League (NFL) games and a massively anticipated boxing bout between Jake Paul and Mike Tyson represent new attractions for the streaming giant.
Photo courtesy of United Airlines
United Airlines shares take to the sky
Tuesday was a massive earnings day for United Airlines (UAL/NASDAQ) as earnings per share came in at $3.33, well outpacing the $3.17 that analysts were predicting. (All figures in U.S. dollars.) Revenues were $14.84 billion (versus $14.78 billion predicted). Shares were up more than 13% on the outperformance and the news that the airline was starting a $1.5-billion share buyback program.
Corporate revenue was up more than 13% year over year, while basic economy seat sales clocked an even more impressive 20% increase. Last week, the company announced new international routes headed to Mongolia, Senegal, Spain, Greenland and more.
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The inflation dragon has been slain
It doesn’t seem that long ago that annualized inflation rates were topping 8%, and there appeared to be no end in sight. Well, the end has arrived. Statistics Canada announced this week that the Consumer Price Index (CPI) annualized inflation rate for September had dropped all the way down to 1.6%. That’s substantially lower than the Bank of Canada’s 2% target.
Led by deflation in clothing and footwear, as well as transportation, the downward trend appears to be widespread. Gasoline was also down 10.7% from this time last year.
Of course, increased shelter costs remain the major concern for many Canadians. Rent increases were up 8.2% year-over-year; while that’s down from August’s figure of 8.9%, it’s still a bitter pill to swallow for many.
Phillips 66 on Wednesday announced it plans to cease operations at its Los Angeles-based refinery near the end of 2025.”With the long-term sustainability of our Los Angeles Refinery uncertain and affected by market dynamics, we are working with leading land development firms to evaluate the future use of our unique and strategically located properties near the Port of Los Angeles,” said Mark Lashier, the chairman and CEO of Phillips 66.The announcement comes days after Gov. Gavin Newsom signed legislation that kickstarts a process for the California Energy Commission to set new rules around backup fuel supply and maintenance for oil refiners. Newsom’s administration pushed the new law in an attempt to prevent gas price spikes, noting prices surge at the pump when refineries undergo maintenance or an outage and are low on supply. The announcement also comes weeks before the California Air Resources Board votes on updates to the state’s Low Carbon Fuel Standards that will have impacts on the oil and gas industry. After this story first published, a spokesman for Phillips 66 told KCRA 3 the decision was not politically motivated nor was it in response to the governor’s recent bill signing. “Phillips 66 is not exiting California, as we want to continue to be a trusted and deliberate partner of the state,” said Al Ortiz with Phillips 66. “This announcement is based on consideration of multiple factors, including future options for the site as part of Phillips 66’s ongoing review of its portfolio of assets. Phillips 66 still owns and operates midstream assets and the Rodeo Renewable Energy Complex, which produces renewable diesel that consumers can find at our branded retail stations across the state. We look forward to finding new ways to serve California markets.” Phillips 66 indicated in its initial announcement that it supports the state’s efforts to expand fuel supply capability. The company promised to work with California to maintain current levels and potentially increase supplies to meet the needs of consumers in the state. The refinery currently employs 600 workers and 300 contractors. The refinery accounts for 8% of California’s crude oil capacity, according to state data. In a statement, a spokesperson for the Western States Petroleum Association said, “Today, we were made aware of the Phillips 66 announcement to cease operations at its Los Angeles-area refinery in the fourth quarter of 2025. We understand that Phillips 66 is not leaving the state and remains committed to meeting California’s commercial and consumer fuel demands.” “We recognize the challenges faced by companies like Phillips 66, which are trying to operate in one of the most highly regulated energy environments in the world. These refinery closures are a direct result of policies that make it increasingly difficult to maintain and expand critical infrastructure,” said Alessandra Magnasco with the California Fuels and Convenience Alliance. “While we understand the need for sustainable progress, we urge policymakers to consider the immediate impacts on consumers, workers, and the stability of California’s fuel supply.” While the future use of the refinery is not yet determined, the number of oil refiners in California has dwindled over the last few decades as the state has worked to cut its reliance on oil and gas to reduce the impacts of climate change. “These sites offer an opportunity to create a transformational project that can support the environment, generate economic development, create jobs and improve the region’s critical infrastructure,” Lashier said.The Phillips 66 refinery in the Los Angeles area is one of California’s nine major oil refiners. Before Wednesday’s announcement, lawmakers from both parties had expressed fears of the impacts of another one shutting down. A Chevron executive told KCRA 3 last week that the governor and California legislature are driving the industry out of state and threatened to no longer invest in California if regulations continue to mount. “It’s going all according to @GavinNewsom’s plan who said in 2021 he does not see a future for oil in CA. This means lost high-paying, union jobs & more expensive gasoline,” said Assemblyman Joe Patterson, R-Rocklin, in a post on X. When reached for comment, Gov. Newsom’s office referred KCRA 3 to the California Energy Commission.The commission’s Vice Chair Siva Gunda said in a statement: “Phillips 66 has been a valuable partner in California’s transition toward a clean energy future. The company has committed to minimizing impacts on Californians while they continue to meet fuel demands, maintain reliable supplies, and ensure they take necessary steps to fulfill both commercial and customer needs. Their plan to replace the production lost from the refinery closure is an example of the type of creative solutions that are needed as we transition away from fossil fuels. We remain dedicated to collaborating with industry leaders to secure an affordable and reliable fuel supply for all consumers as we move forward.”See more coverage of top California stories here | Download our app | Subscribe to our morning newsletter
SACRAMENTO, Calif. —
Phillips 66 on Wednesday announced it plans to cease operations at its Los Angeles-based refinery near the end of 2025.
“With the long-term sustainability of our Los Angeles Refinery uncertain and affected by market dynamics, we are working with leading land development firms to evaluate the future use of our unique and strategically located properties near the Port of Los Angeles,” said Mark Lashier, the chairman and CEO of Phillips 66.
The announcement comes days after Gov. Gavin Newsom signed legislation that kickstarts a process for the California Energy Commission to set new rules around backup fuel supply and maintenance for oil refiners. Newsom’s administration pushed the new law in an attempt to prevent gas price spikes, noting prices surge at the pump when refineries undergo maintenance or an outage and are low on supply. The announcement also comes weeks before the California Air Resources Board votes on updates to the state’s Low Carbon Fuel Standards that will have impacts on the oil and gas industry.
After this story first published, a spokesman for Phillips 66 told KCRA 3 the decision was not politically motivated nor was it in response to the governor’s recent bill signing.
“Phillips 66 is not exiting California, as we want to continue to be a trusted and deliberate partner of the state,” said Al Ortiz with Phillips 66. “This announcement is based on consideration of multiple factors, including future options for the site as part of Phillips 66’s ongoing review of its portfolio of assets. Phillips 66 still owns and operates midstream assets and the Rodeo Renewable Energy Complex, which produces renewable diesel that consumers can find at our branded retail stations across the state. We look forward to finding new ways to serve California markets.”
Phillips 66 indicated in its initial announcement that it supports the state’s efforts to expand fuel supply capability. The company promised to work with California to maintain current levels and potentially increase supplies to meet the needs of consumers in the state.
The refinery currently employs 600 workers and 300 contractors. The refinery accounts for 8% of California’s crude oil capacity, according to state data.
In a statement, a spokesperson for the Western States Petroleum Association said, “Today, we were made aware of the Phillips 66 announcement to cease operations at its Los Angeles-area refinery in the fourth quarter of 2025. We understand that Phillips 66 is not leaving the state and remains committed to meeting California’s commercial and consumer fuel demands.”
“We recognize the challenges faced by companies like Phillips 66, which are trying to operate in one of the most highly regulated energy environments in the world. These refinery closures are a direct result of policies that make it increasingly difficult to maintain and expand critical infrastructure,” said Alessandra Magnasco with the California Fuels and Convenience Alliance. “While we understand the need for sustainable progress, we urge policymakers to consider the immediate impacts on consumers, workers, and the stability of California’s fuel supply.”
While the future use of the refinery is not yet determined, the number of oil refiners in California has dwindled over the last few decades as the state has worked to cut its reliance on oil and gas to reduce the impacts of climate change.
“These sites offer an opportunity to create a transformational project that can support the environment, generate economic development, create jobs and improve the region’s critical infrastructure,” Lashier said.
The Phillips 66 refinery in the Los Angeles area is one of California’s nine major oil refiners. Before Wednesday’s announcement, lawmakers from both parties had expressed fears of the impacts of another one shutting down. A Chevron executive told KCRA 3 last week that the governor and California legislature are driving the industry out of state and threatened to no longer invest in California if regulations continue to mount.
“It’s going all according to @GavinNewsom‘s plan who said in 2021 he does not see a future for oil in CA. This means lost high-paying, union jobs & more expensive gasoline,” said Assemblyman Joe Patterson, R-Rocklin, in a post on X.
When reached for comment, Gov. Newsom’s office referred KCRA 3 to the California Energy Commission.
The commission’s Vice Chair Siva Gunda said in a statement: “Phillips 66 has been a valuable partner in California’s transition toward a clean energy future. The company has committed to minimizing impacts on Californians while they continue to meet fuel demands, maintain reliable supplies, and ensure they take necessary steps to fulfill both commercial and customer needs. Their plan to replace the production lost from the refinery closure is an example of the type of creative solutions that are needed as we transition away from fossil fuels. We remain dedicated to collaborating with industry leaders to secure an affordable and reliable fuel supply for all consumers as we move forward.”
For a decade now, big acquisitions by Canadian oil-and-gas producers have mostly been met with distaste by investors. So we’ll take it as a heartening sign how well the markets received Canadian Natural Resources’ (CNQ/TSX) decision to buy the Alberta upstream assets of Chevron Corp. (CVX/NYSE) for USD$6.5 billion in cash. CNQ stock rose 3.7% Monday in the wake of the announcement. Chevron was up 0.7% on a day when oil prices increased.
The assets in question comprise a 20% stake in the Athabasca Oil Sands Project, along with 70% of the Kaybob Duvernay shale play. That should add 122,500 barrels of oil equivalent per day to Canadian Natural Resource’s 2025 output, the company said. It also announced a 7% bump to its quarterly dividend, to 56.25 Canadian cents a share, beginning in January.
Chevron explained the asset sale in terms of freeing up cash for U.S. shale acquisitions as well as targeted positions abroad, such as in Kazakhstan, which it considers to hold better long-term profit potential.
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Nvidia moves up to number 2 in market cap
Reports of the death of the Magnificent 7 tech stocks’ decade-long run are greatly exaggerated, Nvidia (NVDA/Nasdaq) seemed to say this week as its shares rose past $130. (All figures in U.S. dollars.) That pushed its market capitalization ahead of Microsoft Corp. to $3.19 trillion. That leaves only Apple, with a market cap of $3.4 trillion, worth more than the AI-focused chip-maker.
Nvidia’s stock is up 26% in the past month, compared to a 6% advance for the S&P 500. Nvidia has grown tenfold in just two years. The price movement this week appeared to come from a positive report from Super Micro Computer, a provider of advanced server products and services. It found that sales of its liquid cooling products, deployed alongside Nvidia’s graphics processing units (GPUs), would be even stronger than expected this quarter. Analyst estimates of Nvidia’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the three-month period ended this month is $21.9 billion.
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Pepsi earnings leave a sour taste
Posting its second straight disappointing set of quarterly results on Tuesday, beverage-and-snack maker PepsiCo lowered its full-year guidance for organic revenue unrelated to acquisitions.
Results were hampered by recalls of the company’s Quaker Foods products, related to potential salmonella contamination. PepsiCo also experienced weak demand in the U.S. and business disruptions in some overseas markets, such as the Middle East. Pepsi’s North American beverage volumes fell 3% year-over-year, mostly due to declines in energy drink sales. Meanwhile, its Frito-Lay division suffered a 1.5% decline.
“After outperforming packaged food categories in previous years, salty and savory snacks have underperformed year-to-date,” executives said in a prepared statement. Overall, PepsiCo revised its 2024 sales growth outlook from the previous 4% to low single digits.
Some experts speculate the real sticking point in negotiations isn’t about wages but protection from automation. The ILA refused to allow its members to work on automated vessels docking at U.S. ports. As a result, American ports are getting more and more inefficient, ranking not only behind ports in China, but also Colombo, Sri Lanka. (The Container Port Performance Index is put together annually by The World Bank and S&P Global Market Intelligence.)
For reference, the highest-rated port in Canada is Halifax, listed at 108th in the world. Halifax’s port efficiency was well behind not only Sri Lanka, but also economic powerhouses like Tripoli, Lebanon. To give further Canadian context, Montreal is 348th, and Vancouver is 356th, which is just ahead of Benghazi, Libya.
Something tells me that negotiating for USD$300,000-per-year dockworkers is not going to help these North American efficiency numbers. The higher salaries get, the more attractive automation strategies will quickly become. Clearly there will be an eventual reckoning. In the meantime, for at least one more important presidential news cycle, dockworkers will be able to extract large wage gains as they hold the broader economy hostage.
Why utilities aren’t “boring”—any more
As income-oriented Canadian investors start to grow less enamoured of high-interest savings accounts and guaranteed investment certificates (GICs), the dividend yields of dependable North American utility stocks should begin to look more attractive. Given how quickly interest rates are likely to fall, it’s clear that there is a stampede of investors heading for the stocks of utility companies.
The iShares U.S. Utilities ETF (IDU/NYSE) is up more than 30% year to date, and the iShares S&P/TSX Capped Utilities Index ETF (XUT/TSX) is up about 15% year to date. (Check out MoneySense’s ETF screener for Canadian investors.)
Most of the time utilities (especially those in sectors regulated by federal and local governments) are perceived as “boring.” Sure, the profits are dependable, but if the government is going to determine how much is paid for electricity or natural gas, then a company’s profit margins are tough to change. The dividend income is dependable. But that’s really the whole sales job in a nutshell.
Lately, however, due to AI’s electricity needs and possible AI-fuelled efficiency increases, utilities have been getting some glowing press. Falling interest rates mean that annual interest costs will drop (utilities often have to borrow a lot of money to complete big projects). Meanwhile, Canadian investors looking for safe cash flow are pouring in. Utility stocks make up about 4% of the S&P/TSX Composite Index. The largest utility companies—such as Fortis, Emera, Hydro-One and Brookfield Infrastructure—are some of Canada’s largest companies.
Some of the same income-oriented investors who like utility stocks may also be interested in two new exchange-traded funds (ETFs) that J.P. Morgan Asset Management Canada just launched. The JPMorgan US Equity Premium Income Active ETF (JEPI/TSX) and the JPMorgan Nasdaq Equity Premium Income Active ETF (JEPQ) use options strategies to “juice” the income already provided by higher-dividend-yielding stocks.
The Chinese government commands the economy to grow
Many people like to sort countries’ economies as either communist, socialist, capitalist or free markets. But these days, every country has some version of a mixed economy. The practical implementation of fiscal and monetary policy is becoming increasingly more grey than our old black-and-white economics textbooks would have us believe. Yet, even within the grey, China’s approach for its economic system is uniquely difficult to define.
Back in 1962, when asked about building a socialist market economy, future China leader Deng Xiaoping famously said, “It doesn’t matter whether the cat is black or white, so long as it catches mice.”
Well, the current China leaders have let the fiscal and monetary cats out of the bag, and they’re hoping those cats are hungry.
We wrote about China’s housing problems about a year ago, warning about rising deflation fears. These issues seem to have gotten worse, and the biggest news in world markets this week was that China’s government decided enough was enough. And in a “command” economy (which is probably the most accurate way to describe its approach), the government has a very high degree of control over economic levers. Consequently, markets reacted swiftly and positively to this news.
Here are the highlights of the multi-pronged fiscal and monetary stimulus that the Chinese government has decided to implement:
Banks cut the amount of cash they need in reserve (this is known as the reservation requirement ratio) by 0.50%. This will incentivize banks to lend more money (basically “creating” 1 trillion yuan, USD$142 billion).
The People’s Bank of China (PBOC) Governor Pan Gongsheng said another cut may come later in 2024.
Interest rates for mortgages and minimum down payments on homes were cut.
A USD$71 billion fund was created for buying Chinese stocks.
That last point is pretty interesting to me. Here you have a supposedly communist government essentially creating a big pot of money to spend within a free stock market. The fund is to directly purchase stocks, as well as providing cash to Chinese companies to execute stock buybacks. Good luck defining that action in traditional economic terms.
The idea is to give investors and consumers faith that they should go out there and buy or invest in China’s expanding economy. Clearly something major had to be done to jolt Chinese consumers out of their malaise.
Early reports are speculating that the Chinese gross domestic product (GDP) could fail to rise by less than the 5% target set by the government. If so, we’re about to see what happens when the commander(s) behind a command economy decide that the GDP will rise no matter what.
Contamination of key Los Angeles waterways such as the Santa Monica Bay, Los Angeles Harbor and Echo Park Lake due to the spread of toxic chemicals is at the heart of a $35-million settlement between the L.A. City Council and agriculture giant Monsanto and two smaller companies.
The City Council on Tuesday announced the payout by the companies to settle a lawsuit filed in 2022 over damage from long-banned chemicals called PCBs, which have been linked to health problems including cancer.
The City Council approved the settlement at Tuesday afternoon’s meeting, voting 13 to 0 after a closed session. Councilmembers Imelda Padilla and Nithya Raman were absent.
A call to the office of City Atty. Hydee Feldstein Soto was not immediately answered, nor was a call to Monsanto’s representation.
In March 2022, then-City Atty. Mike Feuer sued Monsanto, which was swallowed by the German corporation Bayer in 2018, and smaller chemical companies Solutia Inc. and Pharmacia.
The complaint sought compensation for the cost of past cleanups — and for future abatement of — polychlorinated biphenyls, or PCBs. The chemicals tainted and continue to pollute many Los Angeles waterways, including the Dominguez Channel, Ballona Creek, Marina del Rey and Machado Lake.
“The city has expended millions and millions of dollars so far and is going to continue to expend millions and millions of dollars to remediate this issue,” Feuer said at the time.
PCBs are human-made organic chemicals that have no known taste or smell and range in consistency from oils to waxes, according to the Environmental Protection Agency.
They had several commercial uses, including in transformers and capacitors, oil used in motors and hydraulic systems, cable insulation, oil-based paint, caulking and plastics.
PCBs were produced and used domestically from roughly 1929 until they were banned in 1979, according to the EPA.
From the 1930s through 1977, Monsanto was the sole producer of PCBs in the United States, according to the National Library of Medicine.
Exposure to PCBs increases the chances of a person developing cancer while diminishing the effectiveness of the immune system and damaging reproductive organs and the nervous system, according to the EPA.
The lawsuit alleged that Monsanto knew that “its commercial PCB formulations were highly toxic and would inevitably produce precisely the contamination and human health risks that have occurred.” Instead of informing public officials, the company “misled the public, regulators, and its own customers about these key facts.”
The lawsuit alleged that, as early as 1937, Monsanto acknowledged internally that PCBs produced “systemic toxic effects upon prolonged exposure.”
Many of Los Angeles’ waterways had been impaired by PCB contamination, according to the lawsuit.
The city has said that it continues to shoulder the cost and responsibility of cleaning these locales along with monitoring and analyzing samples.
People face PCB exposure, according to the lawsuit, by eating contaminated food, breathing contaminated air, or drinking or swimming in contaminated water. Fish captured in contaminated waters and eaten also provide an avenue for PCB exposure.
The settlement avoids a court trial, which presented some risk to the city.
In May, however, an appeals court in Washington state overturned a $185-million verdict against Monsanto in a lawsuit brought by three teachers who claimed brain damage due to PCB leaks.
U.S. Fed cuts rates for the first time in four years
The U.S. dollar remains the most important currency in the world, and the American economy is arguably the most important financial system as well. Consequently, when the U.S. Federal Reserve makes a big announcement, it creates an economic wave that ripples everywhere. That’s why Wednesday’s decision to cut the key overnight borrowing rate by 0.50% is a very big deal.
Many speculated the U.S. Fed would begin cutting rates this week, but it was generally thought it would go with a 0.25% drop to begin an interest rate-cut cycle. The 50 basis points cut lowers the federal funds rate range 4.75% to 5%.
The U.S. Fed announced in a statement: “The Committee has gained greater confidence that inflation is moving sustainably toward 2%, and judges that the risks to achieving its employment and inflation goals are roughly in balance.”
Federal Reserve Chair Jerome Powell said, “We’re trying to achieve a situation where we restore price stability without the kind of painful increase in unemployment that has come sometimes with this inflation. That’s what we’re trying to do, and I think you could take today’s action as a sign of our strong commitment to achieve that goal.”
Immediately after the news of the U.S.’s first interest rate cuts in four years, major stock market indices responded with a brief jump on Wednesday. But they ended the day nearly flat. That seemed to be a bit of a delayed reaction from investors, as the Bulls returned Thursday with Nasdaq soaring 2.5% and the Dow leaping 1.3% to pass 42,000 for the first time ever.
Notably, former U.S. President Donald J. Trump continued to criticize the monetary decisions made by the U.S. Federal Reserve. This despite centuries of financial wisdom telling us that politicians getting involved in short-term monetary policy is a bad idea. (See: Turkey – Erdoğan, Tayyip.) At bitcoin bar PubKey on Wednesday, Trump said, “The economy would be very bad, or they’re playing politics.”
The larger-than-expected rate cut left some commentators questioning if this action would spook the markets. But, if the U.S. Fed manages to thread the needle and cut rates without a recession, it could be a good thing. The historical precedents are very positive for shareholders.
This large rate cut helps ease pressures on emerging markets that borrowed in U.S. dollars. And, it takes some of the pressure off other central banks around the world that didn’t want to see their currencies devalued too much relative to the mighty USD.
Tuesday’s earnings call was the best day that Oracle shareholders have seen in a while.
Oracle earnings highlights
All figures in U.S. currency in this section.
Oracle (ORCL/NYSE): Earnings per share came in at $1.39 (versus $1.32 predicted), and revenues of $13.31 billion (versus $13.23 billion predicted).
Share prices rose more than 13% after the tech giant showed profits that were up nearly 20% from last year. Revenues across the company’s cloud services division continue to increase. And CEO Safra Catz said, “I will say that demand is still outstripping supply. But I can live with that.”
Founder Larry Ellison (who recently passed Mark Zuckerberg to become the second richest person in the world) excitedly predicted that Oracle would one day operate more than 2,000 data centres, which is up from the 162 today. The current project that he highlighted is a massive data centre that will use three modular nuclear reactors to produce the needed gigawatts of electricity.
In other U.S. stock market news, Trump Media and Technology Group (DJT/NASDAQ) investors face a big decision this week. The stock plummeted from highs of $66 per share on March 27, to $16.56 after the debate on Wednesday. Don’t say we didn’t warn you.
That’s not the worst news for DJT investors though. Next week, a potentially crippling event occurs: the entity that owns 57% of the shares can sell the stock for the first time. If it were to sell all its shares (in order to get as much money as possible out of a business venture that loses millions of dollars every month), the share price would tank.
What is the “entity”? It’s actually a question of who not what: Donald Trump.
Even at reduced share price levels, Trump’s slice of Truth Social is worth about $1.9 billion. It’s not like he needs money for pressing issues or anything like that…
Dell and Palantir kick American Airlines and Etsy out of the S&P 500
In other big events to look forward to, September 23 will see major U.S. market indices experience a reweighting. Given that trillions of dollars are now passively invested into indice-based index funds, whether your company is a member of a specific index or not can make a big difference in its share price. That said, these indice moves are largely anticipated by the market, so a lot of the value movement has already been priced in.
For the third straight month, the Bank of Canada (BoC) decided to cut interest rates. The quarter-point cut takes the Bank’s key interest rate down to 4.25%.
The news that’s perhaps bigger than the widely anticipated rate cut was how aggressive BoC governor Tiff Macklem sounded in his prepared remarks. Macklem stated, “If we need to take a bigger step, we’re prepared to take a bigger step.” That sentence will be focused on by financial markets looking to price in larger potential cuts in the months to come. As of Thursday, financial markets were predicting a 93% probability that October would see another 0.25% rate cut. Several economists believe interest rates would fall to around 3% by next summer.
While describing a potential soft landing to the bumpy pandemic-fuelled inflation flight we’ve been on, Macklem stated, “The runway’s in sight, but we have not landed it yet.” It appears that the real debate is no longer if the BoC should cut interest rates, but instead, how quickly it should cut them, and whether a 0.50% cut may be in the cards sooner rather than later.
With unemployment rates increasing, it follows that the inflation rate of labour-intensive services should continue to fall. Lower variable-rate mortgage interest payments will automatically have a deflationary impact on shelter costs across Canada as well.
Last week we wrote about the Alimentation Couche-Tard (ATD/TSX) proposed buyout of 7-Eleven parent company Seven & i Holdings Co. If the buyout goes through, ATD would go from being Canada’s 14th-largest company to being in the running for third-largest company. That’s a big if: on Friday morning, just hours before we went to press, Seven & i said it is rejecting ATD’s $38.5-billion cash bid on the grounds it was not in the best interests of shareholders and was likely to face major anti-trust challenges in the U.S. (All figures in this section are in U.S. dollars.)
It’s interesting to note that 7-Eleven has been much better at running convenience stores in Japan (where it has a 38% profit margin) versus outside of Japan (where it has a 4% margin). That’s partly due to the fact that locations outside of Japan sell a large amount of low-margin gasoline. Couche-Tard, however, has been able to unlock margins in the 8% range in similar gasoline-dominated locations, indicating substantial room for growth. With 7-Eleven’s overall returns falling far behind its Japanese benchmark index over the last eight years, there is clearly a business case to be made to current shareholders.
The political dimensions to the acquisition are much harder to quantify than the business case. While Japan did change its laws to become more foreign-acquisition-friendly in 2023, it still classifies companies as “core,” “non-core” and “protected,” under the Foreign Exchange and Foreign Trade Act. Logically, it seems that a convenience-store company would fit the textbook definition of “non-core.” However, Seven & i Holdings has asked the government to change the classification of its corporation to “core” or “protected.” That would effectively kill any wholesale acquisition opportunities.
There is also an American legal aspect to the deal. The Federal Trade Commission (FTC) would have to rule on whether ATD’s resulting U.S. market share of 13% would be too dominant. Barry Schwartz, chief investment officer and portfolio manager at Baskin Wealth Management, speculated that the most likely outcome might be a sale of 7-Eleven’s overseas assets to ATD, with the company holding on to its Japan-based assets.
Because I grew up in near Winnipeg, the Slurpee Capital of the World, I thought I knew everything the 7-Eleven universe had to offer. Then, I visited Japan and Thailand last year. I realized that I hadn’t seen anything yet. (All figures in U.S. dollars in this section.)
In much of Thailand and Japan (among other places in Asia), the convenience store is a daily touchstone stop. In Tokyo, there are more than 3,000 7-Eleven stores, a large part of the country’s 56,000-plus convenience store locations. While 7-Eleven was a big part of my childhood, it pales in comparison to the role it plays within many Asian communities.
So, it quickly caught my attention when Canadian corporate darling Alimentation Couche-Tard (ATD/TSX) announced it was making a friendly takeover bid for Tokyo-based Seven & I Holdings Co (SVNDY/NIKKEI). The possible deal is historic for many reasons.
The acquisition of Seven & I Holdings Co is the largest-ever Japanese target of a foreign buyer.
It’s the first test of new 2023 takeover rules by Japan’s Ministry of Economy, Trade and Industry (METI), designed to make foreign acquisitions more welcoming and Japanese companies more internationally competitive.
It would likely top Enbridge’s $28 billion acquisition of Spectra Energy Corp back in 2016, to become Canada’s largest-ever corporate takeover.
It would combine Couche-Tarde’s convenience store empire of 16,700 stores in 31 countries, with 7-Eleven’s 85,800 stores in 19 countries.
By combining ATD’s and 7-Eleven’s U.S. market share, Couche-Tard would control more than 12% of the U.S. convenience store market, with the closest competitor being Casey’s General Stores at only 1.7%.
It’s a massive bite to take for ATD, currently valued at about $56 billion, since 7-Eleven is currently worth about $38 billion.
The potential acquisition is so large that many analysts believe ATD would have to raise $18 billion in new equity to complete the deal. That would be the biggest stock offering in Canada by a wide margin. It would also be in addition to the $2 billion in cash on hand ATD has, and its ability to borrow about $20 billion. There’s speculation that Canadian pension plans would be a key source of capital in order to get a deal done.
Neither company disclosed the precise terms of the deal, but Couche-Tard described the offer as “friendly, non-binding.” That’s a key differentiator from a “hostile takeover.” (A hostile takeover is when a company tries to purchase more than half of another company’s shares on the free market against the wishes of the targeted company’s management, thus taking over operational control.)
This move is not totally out of the blue for ATD, as the company has taken big acquisitional swings before. The Quebec-based operator has a long history of successfully integrating new acquisitions. Its attempt three years ago to purchase French grocery chain Carrefour for $25 billion was scuttled at the last minute by the French Finance Minister citing food security issues. Similar protectionist governmental instincts could prevent this massive deal from getting done.
That said, Couche-Tard has been circling (Circle K-ing?) 7-Eleven for over two years now. Perhaps it believes it has what it takes to navigate the new Japanese corporate legal waters and get the deal done.
While there will likely be some nervous customers of 7-Eleven (nobody wants to see change at their favourite corner store), Seven & I Holdings’ shareholders must be happy. Shares were up 22% upon announcement of the proposed acquisition.
1900 vs. 2023 stock markets
It’s always worth keeping the long run in mind when thinking about trends and market forces. When we consider just what an incredible run the U.S. stock market has achieved over the last few years, it’s important to remember that it’s unlikely to continue that outperformance forevermore.
Italian chicken is a fast and flavorful one-pan dinner.
Chicken breasts and potatoes are tossed in a flavorful Italian seasoning and roasted alongside veggies for a full meal on just one pan.
Savory and super easy, you’ll be making this dish on repeat!
Easy Preparation: Simple steps and minimal prep make it easy to follow.
One-Pan Meal: Everything cooks together on a single baking sheet, making cleanup a breeze!
Healthy Ingredients: Includes lots of vegetables like zucchini, cherry tomatoes, and red peppers.
Delicious: Most importantly, this meal is delicious.
What You’ll Need For Italian Chicken
Chicken: Boneless, skinless chicken breasts are ideal for this recipe. You can also substitute with chicken thighs or drumsticks.
Potatoes: I use baby potatoes cut in half. You can also use larger potatoes cut into 1-inch chunks. There is no need to peel the tomatoes.
Vegetables: Zucchini, cherry tomatoes, and red peppers add color and flavor. Feel free to add other veggies like sliced mushrooms or broccoli.
Marinade: A mix of Dijon mustard, red wine vinegar, and Italian dressing mix creates a flavorful marinade.
Seasonings: Olive oil, Parmesan, salt, and pepper give the dish so much flavor!
Variations
Replace the chicken with Italian sausage, shrimp, or pork tenderloin.
Add different herbs and seasonings like fresh parsley, oregano, basil, or thyme.
How to Make Italian Chicken
Season: Toss the chicken with the marinade. Season the potatoes per the recipe below.
Bake: Add the chicken and potatoes to a sheet pan and bake for 15 minutes.
Add veggies: Season the veggies and add to the baking sheet. Bake until tender.
Storing Leftovers
Keep leftover Italian chicken in an airtight container and store it in the fridge for up to 3-4 days.
Freeze portions in zippered bags for up to 4 weeks. Add extra parmesan cheese to revive the flavor!
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Did you make this Italian Chicken? Leave a rating and a comment below.
Italian Chicken
Italian chicken is marinated in a flavorful blend of Dijon and Italian seasoning, then roasted with fresh vegetables for a delicious and easy meal.
Prep Time 20 minutesminutes
Cook Time 40 minutesminutes
Rest Time 5 minutesminutes
Total Time 1 hourhour5 minutesminutes
Prevent your screen from going dark
Preheat oven to 400℉. Line a large rimmed baking sheet with parchment paper.
In a bowl or resealable bag combine 2 tablespoons olive oil, 1 tablespoon Italian dressing mix, red wine vinegar, and dijon. Add the chicken and toss to coat. Allow to marinate while preparing the vegetables.
Cut potatoes in half. Toss with 1 tablespoon oil, Parmesan cheese, ½ teaspoon of salt, and ¼ teaspoon pepper (or to taste). Spread on the baking sheet and bake for 15 minutes.
Meanwhile, in a large bowl toss together cherry tomatoes, zucchini, red pepper, whole garlic cloves, the remaining Italian dressing mix, and 1 tablespoon of olive oil.
Place the chicken on the baking sheet with the potatoes and arrange the vegetables around the chicken.
Bake for 18-25 minutes or until the chicken breasts reach an internal temperature of 165°F.
Rest the chicken for 5 minutes before slicing.
Leftover Italian chicken can be stored in the fridge in an airtight container for up to 4 days.
On Tuesday, Statistics Canada stated that the Consumer Price Index (CPI) measured inflation of 2.5% for July. That’s down from 2.7% in June, and is the lowest inflation rate recorded since 2021.
Deceleration in headline inflation led by shelter component , 12-month % change
CPI basket items
June 2024
July 2024
All-items Consumer Price Index
2.7%
2.5%
Food
2.8%
2.7%
Shelter
6.2%
5.7%
Household operations, furnishings and equipment
-0.9%
-0.1%
Clothing and footwear
-3.1%
-2.7%
Transportation
2%
2%
Health and personal care
3.0%
2.9%
Recreation, education and reading
0.6%
-0.2%
Alcoholic beverages, tobacco products and recreational cannabis
In fact, if you take shelter out of the equation, we’re getting close to zero inflation. And that’s significant for two reasons:
The shelter-inflation rate (primarily a measurement of rent and mortgage expenses) did come down substantially between June and July.
As the Bank of Canada (BoC) cuts interest rates, the inflation component of the CPI will inevitably go down as Canadians will have access to mortgages with lower rates.
Notably, passenger vehicle prices were down 1.4% in July. Clothing and footwear was also down by 2.7%. Food and gas were up by 2.7% and 1.9% respectively. British Columbia and New Brunswick had the highest inflation rate growth, while Manitoba and Saksatchewan had the lowest.
It’s pretty clear there’s no longer an overall inflation crisis in Canada. It’s now simply a home affordability issue at this point. Economists were widely predicting that this continuing trend of a downward inflation rate would clear the way for continued interest-rate cuts in the coming months. Money markets are now predicting a 0.25% cut minimum on September 4, with a 4% probability that the cut will be 0.50%. Looking further down the road, those same markets are predicting there is a 76% chance we will see a 2% decrease by October of 2025.
Target Corporation posted a big earnings beat on Wednesday and shareholders saw its shares increase in value by 11.20%. The Minneapolis-based discount retailer is the seventh-largest in the U.S.
Retail earnings highlights
All numbers are in U.S. dollars.
Target (TGT/NYSE): Earnings per share of $2.57 (versus $2.18 predicted). Revenue of $25.45 billion (versus $25.21 billion estimate).
Lowe’s Companies (LOW/NYSE): Earnings per share of $4.10 (versus $3.97 predicted), and revenues of $23.59 billion (versus $23.91 billion predicted).
Same-store sales for Target grew 3% last quarter, after five straight quarters of declining sales. More purchases of discretionary items like clothing were responsible for the positive reversal to the declining sales trend.
Target’s COO Michael Fiddelke had a very cautious tone, though. “While we’ve been pleased with our performance so far this year, our view of the consumer remains largely the same. The range of possibilities and the macroeconomic backdrop in consumer data and in our business remains unusually high.” And Target CEO Brian Cornell cited price reductions and a value-seeking consumer as reasons for increased foot traffic in the quarter.
It was very much a mediocre earnings report for Lowes, though, as it beat earnings expectations decisively but cut its full-year forecast. Shares were down by about 1% on Tuesday after the earnings announcement.
Lowe’s CEO Marvin Ellison said consumers were waiting for cuts in interest rates before taking on large home improvement projects. Because 90% of Lowes’ customers are homeowners (as opposed to contractors), they are particularly sensitive to movements in interest rates, he shared. Same-store sales were down 5.1% year over year.
After much speculation about when the U.S. will finally begin cutting its interest rates, the CME FedWatch tool reports a 100% chance that the U.S. Federal Reserve will cut its rates in September. Market watchers are pretty confident, with a 36% chance that the U.S. Fed will go right to a 0.50% cut instead of nudging the rate down. And looking ahead, the futures market predicts a 100% chance of 0.75% in rate cuts by December this year, with a 32% chance of a 1.25% rate decrease. The forecasts became stronger this week as the annualized inflation rate in the U.S. slowed to 2.9%, its lowest rate since March 2021. There are a lot of percentages here, but the gist is people are expecting big interest rate cuts.
Those probabilities should take some of the currency pressure off of the Bank of Canada (BoC) when it makes its next interest rate decision on September 4. If the BoC were to continue to cut rates at a faster pace than the U.S. Fed, the Canadian dollar would substantially depreciate and import-led inflation would likely become an issue.
Here are some top-line takeaways from the U.S. Labor Department July CPI report:
Core CPI (excluding food and energy) rose at an annualized inflation rate of 3.2%.
Shelter costs rose 0.4% in one month and were responsible for 90% of the headline inflation increase.
Food prices were up 0.2% from June to July.
Energy prices were flat from June to July.
Medical care services and apparel actually deflated by 0.3% and -0.4% respectively.
When combined with the meagre July jobs report, it’s pretty clear the U.S. consumer-led inflation pressures are receding. As the U.S. cuts interest rates and mortgage costs come down, it’s quite likely that shelter costs (the last leg of strong inflation) could come down as well.
Walmart: “Not projecting a recession”
Despite slowing U.S. consumer spending, mega retailers Home Depot and Walmart continue to book solid profits.
U.S. retail earnings highlights
Here are the results from this week. All numbers below are reported in USD.
Walmart (WMT/NYSE): Earnings per share of $0.67 (versus $0.65 predicted). Revenue of $169.34 billion (versus $168.63 billion predicted).
Home Depot (HD/NYSE): Earnings per share of $4.60 (versus $4.49 predicted). Revenue of $43.18 billion (versus $43.06 billion predicted).
While Home Depot posted a strong earnings beat on Wednesday, forward guidance was lukewarm, resulting in a gain of 1.60% on the day. Walmart, on the other hand, knocked the ball out of the park and raised its forward guidance and booked a gain of 6.58% on Thursday.
Walmart Chief Financial Officer John David Rainey told CNBC, “In this environment, it’s responsible or prudent to be a little bit guarded with the outlook, but we’re not projecting a recession.” He went on to add, “We see, among our members and customers, that they remain choiceful, discerning, value-seeking, focusing on things like essentials rather than discretionary items, but importantly, we don’t see any additional fraying of consumer health.”
Same-store sales for Walmart U.S. were up 4.2% year over year, and e-commerce sales were up 22%. The mega retailer highlighted its launch of the Bettergoods grocery brand as a way to monetize the trend toward cheaper food-at-home options, and away from fast food.
Colorado has three years to lower ground-level ozone pollution to meet federal standards, and this summer’s hazy skies — caused by oil and gas drilling, heavy vehicle traffic and wildfire smoke — are putting the state in a hole as it’s already logged more dirty air days than in all of 2023.
“Our state has taken a lot of steps to improve air quality, but you can see it in the skies, you can see it in the air, that we still have work to do,” said Kirsten Schatz, clean air advocate for the Colorado Public Interest Research Group.
Two months into the 2024 summer ozone season, the Front Range already has recorded more high ozone days than the entire summer of 2023. As of Monday, which is the most recent data available, ozone levels had exceeded federal air quality standards on 28 days. At the same point in 2023, there had been 27 high-ozone days.
The summer ozone season runs from June 1 to Aug. 31. However, the region encompassing metro Denver and the northern Front Range this year recorded its first high ozone day in May, and in some years ozone pollution exceeds federal standards into mid-September.
The first benchmark is to lower average ozone pollution to a 2008 standard of 75 parts per billion. The northern Front Range is in what’s called “severe non-attainment” for that number, meaning motorists must use a more expensive blend of gasoline during the summer and more businesses must apply for federal permits that regulate how much pollution they spill into the air.
The second benchmark requires the region to lower its average ozone pollution to a 2015 standard of 70 parts per billion, considered the most acceptable level of air pollution for human health. In July, the EPA downgraded the northern Front Range to be in serious violation of that standard as the region’s ozone level now sits at 81 parts per billion. The state must now submit to the EPA a new plan for lowering emissions.
Colorado needs to meet both EPA benchmarks by 2027, or it will be downgraded again and face more federal regulation.
Of the 28 days the state has recorded high ozone pollution levels, 17 exceeded the 2008 standard of 70 parts per billion, according to data compiled by the Regional Air Quality Council, an organization that advises the state on how to reduce air pollution.
That’s bad news for the region after state air regulators predicted Colorado would be able to meet that standard by the 2027 deadline. The EPA calculates average ozone pollution levels on a three-year average, so this summer’s bad numbers will drag down the final grade.
“It’s not a good first year to have,” said Mike Silverstein, the air quality council’s executive director.
Smoke from wildfires near and far
Ground-level ozone pollution forms on hot summer days when volatile organic compounds and nitrogen oxides react in the sunlight. Those compounds and gases are released by oil and gas wells and refineries, automobiles on the road, fumes from paint and other industrial chemicals, and gas-powered lawn and garden equipment.
It forms a smog that can cause the skies to become brown or hazy, and it is harmful to people, especially those with lung and heart disease, the elderly and children. Ground-level ozone is different than the ozone in the atmosphere that protects Earth from the sun’s powerful rays.
Wildfire smoke blowing from Canada and the Pacific Northwest did not help Colorado’s pollution levels in July, and then multiple fires erupted along the Front Range over the past week, creating homegrown pollution from fine particulate matter such as smoke, soot and ash. Ultimately, though, the heavy smoke days could be wiped from the calculations from 2024, but that decision will be made at a later date.
Still, June also saw multiple high ozone days, and air quality experts say much of the pollution originates at home in Colorado and cannot be blamed on outside influences.
The out-of-state wildfire smoke sent ozone levels skyrocketing the week of July 21 to 27, Silverstein said, but it’s not the reason the numbers are high. The week prior saw ozone levels above federal standards, too, and wildfire smoke had not drifted into the region.
“Pull the wildfires out and we would probably still have had high ozone,” he said.
Jeremy Nichols, senior advocate for the Center for Biological Diversity, also warned that wildfires should not be used as an excuse for the region’s air pollution.
“While the wildfires are out of our control, there is a whole bunch of air pollution we can control,” he said. “I don’t want to let that cover up the ugliness that existed here in the first place.”
Nichols blames oil and gas drilling for the region’s smog. The state is not doing enough to regulate the industry, he said.
“We actually need to recognize we are at a point where oil and gas needs to stop drilling on high ozone days,” Nichols said. “Just like we’re told to stay home on high ozone days, business as usual needs to stop. I don’t think we’ve clamped down on them and in many respects they are getting a free pass to pollute.”
One proposal would require drilling companies to eliminate emissions from pneumatic actuating devices, equipment driven by pressurized gas to open and close valves in pipelines, Silverstein said. Oil companies already are required to make 50% of those devices emission-free, and the federal government also is requiring them to be 100% emission-free by 2035. But Colorado’s proposal would accelerate the timeline, he said.
The second proposal would tell companies to stop performing blowdowns, which is when workers vent fumes from pipelines before beginning maintenance to clear explosive gases, when an ozone alert is issued, Silverstein said.
“There are thousands of these very small events, but these small events add up to significant activity,” he said.
Gabby Richmond, a spokeswoman for the Colorado Oil and Gas Association, said the industry supports the new regulations. She said operators also were electrifying operations where possible and voluntarily delaying operational activities on high ozone days.
“Our industry values clean air, and we are committed to pioneering innovative solutions that protect our environment and make Colorado a great place to live,” Richmond said in a statement. “As a part of this commitment, we have significantly reduced ozone-causing emissions by over 50% through technology, regulatory initiatives and voluntary measures — all in the spirit of being good neighbors in the communities where we live and work.”
“Knock down emissions where we can”
Meanwhile, people who live in metro Denver and the northern Front Range are asked to do their part, too.
When the state health department issues an ozone action alert — which is a forecast for high pollution levels — people are asked to limit driving as much as possible. They also are asked to avoid using gas-powered lawn and garden equipment until later in the day when the sun starts dropping behind the mountains and temperatures fall.
It would be easy to blame Colorado’s ozone pollution on its geography, global climate change that is raising temperatures, and pollution blowing from other countries and states, Silverstein said. But Colorado has a responsibility to do its part.
“We have 4 million people and a big oil and gas field and lots of industrial activity and all of the things related to human activity all in one concentrated location with a great mountain backdrop, but it comes with a bit of a price,” he said. “So it’s up to us to find the strategies to knock down emissions where we can.”
The narrative around the Magnificent 7 mega-cap technology stocks has become mixed, even in the face of mostly positive earnings news.
Microsoft stock sold off on Tuesday even after the company narrowly beat Wall Street expectations for its fiscal fourth-quarter results and handily surpassed results from a year ago. Investors have been scrutinizing figures for AI operations in particular; Microsoft’s Intelligent Cloud revenue rose 19% year over year and contributed 8 percentage points of growth to its Azure and other cloud services revenue, which grew 29%. Evidently, that wasn’t enough.
Facebook and Instagram owner Meta Platforms, by contrast, easily bested analyst forecasts for the second quarter. It boosted net income by 73% over the same quarter last year and is gaining advertising market share over archrival Alphabet. Compared to its Mag 7 peers, Meta has been a stock-market laggard since 2022 but undertook a cost- and job-cutting campaign that now appears to be paying off.
Apple likewise surpassed expectations for revenue and earnings, posting particularly strong results in its iPhone and iPad divisions. Cloud services, computers and wearables were in line with estimates.
Amazon was punished after missing the analyst consensus for revenue, even though it beat estimates for earnings. Though Amazon Web Services performance was strong, the company’s core retail and advertising businesses disappointed.
Currency figures in this section are reported in USD.
Microsoft (MSFT/NASDAQ): Earnings per share of $2.95 (versus $2.94 predicted). Revenue of $64.7 billion (versus $64.5 billion estimate).
Meta Platforms (META/NASDAQ): Earnings per share of $5.16 (versus $4.63 expected). Revenue of $39.07 billion (versus $38.31 billion estimate).
Apple (AAPL/NASDAQ): Earnings per share of $1.40 (versus $1.35 expected) . Revenue of $85.78 billion (versus $84.53 billion estimate).
Amazon (AMZN/NASDAQ): Earnings per share of $1.26 (versus $1.03 expected). Revenue of $147.98 billion (versus $148.56 billion estimate).
The U.S. Fed stands pat for now
There were no assassination attempts or presidential nominees dropping out of the race for the White House this week. The news out of Washington, D.C. on Wednesday, however, was just as closely watched by markets.
The U.S. Federal Reserve elected to hold its overnight lending rate at 5.5%. In a statement, the central bank’s Open Market Committee acknowledged signs of a slowing economy but said it would not cut rates “until it has gained greater confidence that inflation is moving sustainably toward 2%.” The market continues to pin its bets on a rate cut in September, which would be the first since 2020.
That leaves the Bank of Canada, which has cut rates in both of the last two months, a full percentage point below the U.S. Fed. The Canadian dollar nonetheless gained slightly against the greenback, at USD$0.72485, in the wake of the announcement, suggesting the policy decision was expected.
Biden’s withdrawal soothes bond market, deflates “Trump trade”
Compared to the way U.S. President Joe Biden’s decision not to run for a second term shook the political world, the markets seemed nonplussed—on the surface, at least.
Biden’s U-turn took some air out of the “Trump trade” in stock, bond and cryptocurrency markets. Stock markets overall rebounded the day after the announcement, with mega-cap technology stocks leading the way. But oil and gas stocks and cryptocurrencies—foreseen to fare better under a Donald Trump administration—retrenched.
The Republican nominee is seen as a bigger deficit spender than whomever the Democrats might settle on, so a Trump/Vance administration is expected to usher in higher inflation. That recently translated into a steeper yield curve for bonds as polls showed him ahead of Biden. However, that expectation of Trump as an inevitable shoo-in has now deflated and bond yields have flattened somewhat.
However, Kristina Hooper, chief global market strategist at Invesco, warned investors to stay braced for more short-term volatility, “as the significant uncertainty about the new Democratic ticket might not be resolved until the party’s convention in August.” She also suggested that investors should pay closer attention to the U.S. Federal Reserve moves with respect to interest rates. (More on Canada’s recent rate cut below.)
Something for Canadians and investors to ponder: As a senator, Vice President and Democratic front-runner Kamala Harris voted against the U.S.-Canada-Mexico trade agreement (USMCA), the successor to NAFTA (North American Free Trade Agreement) that was concluded by the Trump administration in 2020. At the time, she cited the lack of environmental protections for her decision.
Bank of Canada cuts rates again
Speaking of monetary policy, on Wednesday Bank of Canada (BoC) governor Tiff Macklem announced a second quarter-point cut to interest rates in as many months bringing the overnight lending rate down to 4.5%. Further, Macklem hinted there would be more cuts to come this year; provided inflation continues to subside towards the Bank’s 2% target. The country’s Consumer Price Index (CPI) increased 2.7% year-over-year in June, down from a 21st-century high of 8.1% two years earlier.
The rate cut was widely expected by markets.
“Today’s decision to cut was consistent with our call, and that of broader market consensus which had upped the odds of reduction following a cascade of recent data which showed decelerating inflation, slack in the labour market and underperforming economy.”
– Brian Yu, AVP and chief economist for Central1 Credit Union.
The BoC is forecasting 1.2% GDP growth this year, 2.1% in 2025 and 2.4% in 2026, which sounds OK until you consider population growth is currently running at 3%. Regardless, the rate cut provides some relief to mortgage holders and support for bond markets.
As we’re moving through summer’s dog days and heat records are being broken around the world, Canadian inflation is moving in the opposite direction. Statistics Canada released that the year-over-year Consumer Price Index (CPI) increase cooled to 2.7% in June. As inflation continues its downward trend, it generally indicates that the Bank of Canada’s monetary policy is working.
The main takeaways from the monthly CPI report are:
Core CPI (excluding food and energy) stayed stubbornly higher than the headline CPI, coming in at an annualized 2.9%.
Shelter continues to dominate the overall inflation picture, as prices were up 6.2%.
Services, another major inflation concern, were up 4.8%.
Durable good prices have substantially deflated, as they fell at an annualized rate of 1.8%.
Similarly, prices for clothes and shoes were down 3.1%.
Gas prices were down 3.1% from May to June, and have been pretty stable over the last year.
Grocery prices went up at an annualized rate of 2.1%, lower than the overall CPI figure.
The business and individual sentiment surveys point to decreasing inflation expectations going forward, and are significant indicators that the Bank of Canada (BoC) has succeeded in curbing the scariest runaway inflation scenarios. The early 1980s saw the rise of denim and ultra-high interest rates. While ’80s fashion might be back, it’s pretty clear that the era’s monetary policy isn’t.
Decreased inflation is welcomed news by many Canadians, but it’s probably cold comfort to those with mortgages due for renewal this month. The country as a whole might be happier that demand-pull inflation is down, but that just really means: “People have way less money to spend on most things because their mortgage or rent payments just went through the roof.”
The lower inflation rates and decreased inflation sentiments should empower the BoC to continue to slowly but surely cut interest rates in the coming months. It would be shocking if the BoC didn’t lower interest rates by 0.25% when it makes its decision next week.
To check out the effects of inflation rates right now, use this table.
Netflix subscribers must be nostalgic for TV commercials
Earnings day went largely as predicted for Netflix last Thursday, as earnings and revenues were quite close to the company’s guidance last quarter.
Netflix earnings highlights
Currency figures in this section are reported in USD.
• Netflix (NFLX/NASDAQ): Earnings per share of $4.88 (versus $4.74 predicted). Revenue of $9.56 billion (versus $9.53 billion estimate).
Netflix sold more memberships than was predicted (277.65 million versus 274.40 million). The bulk of that subscriber growth was in its advertising-supported platform. The markets seemed to take the news in stride, as share prices were largely flat in after-market trading.
Netflix co-CEO Ted Sarandos highlighted the company’s focus on ads going forward, saying that the streamer would no longer partner with Microsoft. Instead, it’s investing in its own platform. He also mentioned that Netflix’s push into live sports would attract more ad dollars, specifically mentioning the NFL games on Christmas Day as important opportunities. He summed up the company’s push into live sports saying, “We’re in live [TV] because our members love it, and it drives a ton of engagement and a ton of excitement… and the good thing is advertisers like it for the exact same reason.”
With Netflix up over 43% this year, and at a price to earnings (P/E) ratio of over 44, one could make the argument the stock is priced appropriately, and that it will have to expertly execute future growth plans to have any chance of justifying that high price tag.
