Here are five things you need to know this morning
Retail slowdown: There is a definite downtrend taking shape when it comes to consumer spending in Canada. Retail sales fell by 0.6 per cent in January and the “flash” estimate from Statistics Canada indicates sales fell by 0.4 per cent in February. It’s the first back-to-back decreases since mid-2023…and the numbers seem to indicate Canadian consumers are paring back their spending amid rising inflation and trade war uncertainty. Car dealers led the decrease in January, with food and beverage retailers as well as sporting goods stores also seeing declines.
Bank of Canada changing approach: Bank of Canada Governor Tiff Macklem is signalling a shift in how the central bank sets interest rates. In a speech yesterday in Calgary, Macklem said the risk of higher inflation from a trade war limits the central bank’s ability to cut interest rates to boost growth and warned about the dangers of adjusting policy based on an uncertain outlook. Macklem said policymakers would be “less forward-looking than normal until the situation is clearer,” adding that the central bank could be forced to act more quickly “when things crystallize.” Macklem also acknowledged the Canadian economy may be hit with a recession, as the impact of the trade war with the U.S. begins to take hold.
Smith rejects tariffs on Alberta oil: Alberta Premier Danielle Smith says she won’t accept an export tax or restriction of Alberta’s oil and gas to the United States. In an emailed statement to Bloomberg News, Smith said that during her meeting with Prime Minister Carney she rejected any constraints on oil and gas exports to the U.S. as part of Canada’s response to U.S. tariffs. Smith also presented Carney with a list of demands, including oil and gas corridors to the north, east, and west, the repeal of legislation that she says hinders pipeline development and the lifting of a tanker ban off British Columbia’s coast. Smith also demanded the ends of an oil and gas industry emissions cap, clean energy regulations, a federal prohibition on single-use plastics and a net-zero car mandate.
Disappointing forecasts weigh on stocks: Stock market futures are indicating a negative open for trading today, after three big U.S. companies gave cautious forecasts that disappointed investors. Nike issued a sales outlook for its current quarter that came in below expectations and also posted steep revenue declines across most of its segments. The sportswear giant signaled further declines in revenue and profit due to an ongoing merchandise reset that the company says is necessary to renew growth. Chipmaker Micron beat estimates for revenue and profit in its latest quarter but issued a profit margin outlook that came in below what analysts were expecting. And FedEx lowered its full-year guidance for a third consecutive quarter, citing inflation and uncertain demand for shipments. Fedex is facing a challenging operating environment, with higher-than-expected inflation, weakening consumer confidence, and the potential fallout from U.S. President Donald Trump’s escalating trade war.
