This week for our first newsletter of the term – a new stock contest and some interesting articles!
Written By: Amit Shteyer & Peter Robertson
Canada’s Economy at a Glance
Economics Society News, Events, and Articles
Registration for our Fall 2021 stock contest opens tomorrow! The registration link will be posted on our Instagram page. It is free to enter and 1st, 2nd, and 3rd place will each receive a piece of the $50 prize pool! The contest will run from September 27th until December 7th.
The format for this semester will be similar to last semester with a few added restrictions. Each participant will be able to choose any 3 equities (no ETFs or warrants allowed!) listed on the TSX, NYSE, or NASDAQ. They will then have the ability to choose what % each of the 3 equities will make up of their portfolio. Each equity chosen by participants must have a minimum market cap of $100 million USD at the time of entry. We will post biweekly updates on an alternating schedule with our newsletters.
News and Noteworthy
Chip shortage drags on as plant closures hit carmakers
With car manufacturer factory closures in Europe, North America and Asia, the shortages are likely to continue. Chip manufacturers have been unable to deal with the massive order backlog due to the pandemic and disruptions to global shipping. It is forecasted that car manufacturers will need to decrease production by 9.5 million cars due to the shortage. Read More.
Aukus: UK, US and Australia launch pact to counter China
The UK, US and Australia have entered a security pact in the Asia-Pacific, which is one of the biggest defence partnerships since WWII. Biden mentioned this pact was meant to help with regional security concerns that the three countries have. The expected result is that this will “preserve security and stability in the world and create hundreds of high-skilled jobs”. Read More.
Investors tense up as fears of post-election gridlock rise in Canada
Due to major parties being almost tied in the election currently and an increase in mail-in votes, foreign investors fear that a stable Canadian government will not be formed soon. This will cause a detour in the response to COVID-19 and a delay in the recovery of the Canadian economy. Read More.
Salaries expected to go up, but real wages of Canadian workers could edge down after inflation
New survey data shows that wages in Canada don’t seem to be keeping up with the inflation rate, which has continued to rise for nearly the entire pandemic. The new employer survey from LifeWorks projects wages to rise 2.5% next year, despite the most recent CPI data showing a YoY increase of 4.1%, the highest increase since 2003. Read more.
Canada Mortgage and Housing Corp. says annual pace of housing starts slowed in August
CMHC reported on Thursday that the annual rate of seasonally adjusted housing starts slowed down slightly for the month of August with a 3.9% decline from July. The slowdown in new builds was particularly prevalent in urban areas where the rate for apartments and condos fell 5.7% from the previous month. Read more.
More supply won’t solve Canada’s housing affordability crisis
Throughout this election when asked about housing affordability, most leaders have emphasised plans to build new homes, but this article argues that increasing supply won’t fix Canada’s housing market. The author argues that because new supply is just a small fraction of what is already on the market, it actually does not have a very significant impact on housing prices. Read more.
Among O.E.C.D. nations, the U.S. has one of the highest rates of child poverty. How can that be?