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Inflation firmed:

Canada’s inflation rate rose for the first time in three months in October, bouncing back from its late-summer lull amid rising costs for automobiles and a rebound in airfares.

Meanwhile, new retail-sales figures showed a solid upturn in consumer demand at the end of the third quarter.

Statistics Canada reported on Friday that year-over-year inflation in the consumer price index was 2.4 per cent, after dipping to a four-month low of 2.2 per cent in September. It said CPI rose 0.3 per cent month over month, on both a seasonally adjusted and an unadjusted basis.
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However, Statscan noted that the Bank of Canada’s three preferred measures of core inflation – designed to filter out short-term distortions and identify the broader trend across the economy – averaged 2.0 per cent in the month, little changed from September. All three core measures have been close to the central bank’s long-standing 2-per-cent inflation target for the past nine months, even as the overall inflation rate has swung wildly at times.

But oil got whacked:

Oil prices slumped up to nearly 8 per cent to the lowest in more than a year on Friday, posting the seventh consecutive weekly loss, amid intensifying fears of a supply glut even as major producers consider cutting output.

Oil supply, led by U.S. producers, is growing faster than demand and to prevent a buildup of unused fuel such as the one that emerged in 2015, the Organization of the Petroleum Exporting Countries is expected to start trimming output after a meeting on Dec. 6.

But this has done little so far to prop up prices, which have dropped more than 20 per cent so far in November, in a seven-week streak of losses. Prices were on course for their biggest one-month decline since late 2014.

… and the market got whacked again:

The bear market in oil globally combined with a persistent discount on Alberta crude has resulted in a powerful double negative for Canadian energy stocks. The S&P/TSX energy index slumped nearly 5 per cent Friday to levels not far off the depths of the 2014-to-2016 crash in oil prices.
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Problems in Canada’s oil patch are rippling through to other companies with exposure to the sector. The S&P/TSX Composite Index is down by 7.4 per cent so far this year, reinforcing the sway the energy sector still holds over the Canadian market.

TXPR touched a new 52-week low of 644.06 before closing at 645.20, down 0.79%. Volume was about average in the context of the last thirty days.

CPD touched a new 52-week low of 12.90 before closing at 12.96, down 0.77%. Volume was on the high side in the context of the last thirty days, but not extraordinarily so.

ZPR touched a new 52-week low of 10.56 before closing at 10.61, down 0.66%. Again, volume was on the high side in the context of the last thirty days, but not extraordinarily so. The high-volume days were at the end of October.

Well, so much for the rally.

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Markets were a bit happier today:

World stock markets climbed on Wednesday, with the S&P 500 ending higher after a brutal two-day selloff, led by a rebound in energy and technology shares, but the market faltered toward the session’s end as Apple shares surrendered gains ahead of the U.S.Thanksgiving holiday.

The recovery in U.S. tech and other momentum stocks boosted the benchmark S&P 500 stock index after it fell 3.5 per cent over the previous two sessions. Shares of Amazon.com Inc , Alphabet Inc and Facebook Inc rose more than 1 per cent. Apple closed down 0.1 per cent.

Oil prices climbed after U.S. government data showed strong demand for gasoline and diesel, though gains were limited by concern over rising crude supply. U.S. crude prices had sunk to one-year lows after Tuesday’s sell-off.
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Canada’s main stock index rose in a broad-based rally on Wednesday, as oil prices rebounded from one-year lows boosting energy shares, while higher gold prices aided gains in shares of precious metal miners.

The Toronto Stock Exchange’s S&P/TSX composite index was up 218.02 points, or 1.47 per cent, at 15,095.02.

The TXPR price index closed at 655.17, up 1.12% on the day … but before breaking out the champagne, remember that that level is still well below the November 19 close of 661.68, which most of us thought was pretty awful already. Still, it’s nice to know that the losing streak of nine straight days has been snapped!

Volume today was merely average, by my metric: the number of issues in my indices (investment grade, non-trivial average daily volume) trading more that 10,000 shares. This minimizes the effects of block-trading, emphasizing retail-type volumes and therefore provides a better indicator of how hard it might be to get a decent-sized trade done in the market without going through the dealers’ prop desks.

PerpetualDiscounts now yield 5.82%, equivalent to 7.57% interest at the standard equivalency factor of 1.3x. Long corporates now yield a little over 4.15%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) is now about 340bp, an incredible 25bp widening from the 315bp reported November 14.

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Carnage everywhere:

Falling oil prices are adding to the downdraft in stocks, as the decline in Canadian and U.S. markets gained speed Tuesday.

U.S. stocks slumped back into negative territory for 2018 and Canadian stocks were hit again by tumbling oil prices, as investors weigh further evidence that global economic activity is slowing.

The Standard and Poor’s 500, which declined 1.8 per cent, is now down 10 per cent since hitting its high point in September, while Canada’s S&P/TSX Composite Index closed at its lowest level in two years, weighed down by Tuesday’s 6.6-per-cent decline in crude oil.
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The S&P 500′s decline to 2,641.89 means the index is now down 1.2 per cent for the year. The 30-member Dow Jones Industrial Average fell 551.80 points on Tuesday, or 2.2 per cent, closing at 24,465.64.

But the real hit was to the Canadian preferred share market:

The TXPR Index hit a new 52-week low today of 647.89, before closing at 648.12, well below the prior low (set on November 19) of 661.68. There have now been nine straight days of losses, during which the price index has gone down 5.60%. At 2,882,187 shares trading, volume was on the high side, but nothing special in the context of the past thirty days.

CPD closed at 12.98, just above its low for the day of 12.965, well below the prior 52-week low of 13.27 set on November 19. At 448,849 shares volume, this was easily the highest turnover in the past thirty days – second place was 275,220 on October 31. Capitulation? You tell me.

ZPR closed at a new low of 10.60 today, just above the day’s low of 10.58, far below the prior 52-week low of 10.86, hit on November 19. Volume was the third-highest in the past thirty days.

Today’s tables are not for the faint of heart. Volume was high in quite a few individual issues, which may be due to market-makers hedging their (presumably) ever-increasing inventory of CPD and ZPR.

Today is World Toilet Day and the markets behaved accordingly.

The TXPR Index hit a new 52-week low today, touching 661.68 at the close, well below the prior low (set on November 16) of 667.15. There have now been eight straight days of losses, during which the price index has gone down 3.62%.

CPD closed at 13.27, its low for the day, well below the prior 52-week low of 13.37 set on October 30.

ZPR closed at a new low of 10.86 today, far below the prior figure of 10.98, hit on November 16.

All the above are price measures, not total return measures.

Volume was up today, with 29 issues trading 10,000+ shares – which still qualifies it as a ‘below average’ volume day. Like Assiduous Reader malcolmm, I have a hard time taking this seriously – I believe that retail has heard that the economy’s rushing down a well-oiled track:

The plummeting price of Canadian heavy crude oil has been a source of of rising anxiety in Calgary and misery for investors in the energy sector. But it is more than that. As the downturn deepens, it’s becoming a cause of worry for the entire domestic economy, and for government finances that haven’t fully recovered yet from the oil crash of 2014 to 2016.

The numbers are extraordinary. This week, the country’s heavy-oil benchmark, Western Canadian Select (WCS), fell to US$13.46 per barrel, lower than at any point during the oil recession of several years ago.

Jim Gray, a veteran of Canada’s energy sector and chairman of the energy group at Brookfield Asset Management Inc., offers another eye-popping figure to describe the potential damage: By some calculations, total government revenue from royalties and taxable income related to heavy oil could fall by $10-billion. That works out to about $700 per Canadian household. But that’s only one fairly narrow measure of the costs.

and are, as usual, fighting the last war. Who knows? Maybe this time they’ll be right! In the meantime, I’m just clipping my coupons.

The TXPR Index hit a new 52-week low today, touching 667.15, well below the prior low (set on October 30) of 669.90. There have now been seven straight days of losses, during which the price index has gone down 2.73%.

CPD closed at 13.38, its low for the day, just a penny above its 52-week low set on October 30.

ZPR touched a new low of 10.98 today, two and a half cents below the prior figure of 11.005, hit on October 30.

So … lousy day, lousy week. The five-year Canada closed at 2.29%, well off its recent yield highs in the 2.45% area, which I suppose has something to do with the decline. My mail-box will shortly start filling up again with questions about negative yields, I’m sure!