Here are five things you need to know this morning:
Air Canada pilots strike a tentative deal
The looming labour stoppage at Air Canada has seemingly been avoided for now as the airline and its main pilot union have hammered out a new four-year labour pact. The deal comes with a reported 42 per cent wage increase, according to Bloomberg. While the 5,000 members of the Airline Pilots Association still have to ratify the pact, in the short term the deal averts a walkout that would have grounded 1,000 flights a day.
Coffee prices hit 13-year high on supply concerns
The price of your morning cup of coffee is poised to get more expensive as the price of arabica beans has risen to its highest level since 2011. Arabica futures are up by as much as two per cent in New York this morning to $2.6475 a pound. That’s a 40 per cent run up this year and up to the highest point in 13 years as concerns about the supply of cheaper robusta beans has people scrambling to secure the arabica variety. Brazil is the world’s largest supplier of coffee beans and harsh weather in that country has prompted concerns over how much output to expect. A drought this year is already stoking fears about next year’s harvest.
Lucara Diamond touts 1,000-carat find
Vancouver-based Lucara Diamond Corp. says it has found another giant diamond at its mine in Botswana, touting a 1,094-carat rock in the Karowe mine. While smaller than a 2,942-stone uncovered at the same site last month, it’s still enough to rank among the largest ever, and roughly one third of the size of the biggest natural diamond ever discovered, the Cullinan Diamond, a 3,000-carat monster found in South Africa more than a century ago. Lucara’s Karowe project is developing a bit of a reputation for giant stones now, driving shares in the company up by more than a third since the announcement of the first large stone last month. The new one is valued at approximately $13 million.
Bausch & Lomb kicking tires on sale
According to a report in The Financial Times, Bausch & Lomb is exploring a sale as a way to completely separate itself from Bausch Health, its TSX-listed parent company formerly known as Valeant. B&L is one of the world’s largest suppliers of contact lenses and Bausch Health first spun the company off in 2022. But Bausch Health retained 88 per cent of the business, planning to sell off the rest later. The lens maker is seeking to speed up that timeline and distance itself from its parent company because of solvency concerns. Bausch Health has a market cap of about $3 billion on the TSX, against a debt pile of $21 billion. That’s a stunning fall for a company that in its previous iteration was briefly the most valuable in Canada. The lens maker subsidiary is worth about twice what it’s former parent is worth at current valuation. Shares in Bausch & Lomb are up about 20 per cent on the report, even though the company says in a statement it does not comment on rumours and speculation.
Housing market still in “holding pattern” CREA says
The first three rate cuts from the Bank of Canada in recent months have caused activity to pick up, but the market is still a shadow of its former self, according to new numbers released by the Canadian Real Estate Association this morning. The group which represents more than 160,000 Realtors across the country said that the trend in June, July and August has been of steady growth, but overall the market is still “mostly stuck in a holding pattern” waiting for more rate cuts and the economic picture to improve. Total sales on MLS inched up 1.3 per cent in August and are now at their highest point of the year, which is notable because August is not typically a strong month for home sales. On the price side, the average selling price was $649,100 during the month, up about 0.1 per cent from a year ago. The House Price Index which strips out volatility from the average is down 3.9 per cent in the past year. Overall, the numbers paint a picture of a market that is waiting for expected rate cuts to come, as buyers wait for bargains and sellers proving reluctant to sell. “With more interest rate cuts now expected between now and next summer, the stage is set for a faster return of demand, but we’re clearly not there just yet,” CREA chair James Mabey said.
