Aurelia Butler

TORONTO (Reuters) – Canada’s resource-heavy main stock index posted its biggest decline in more than three months on Friday and the Canadian dollar extended its recent decline as oil prices tumbled and investors grew more worried about the global economic outlook.The Toronto Stock Exchange’s S&P/TSX composite index ended down 521.70 points, or 2.8%, at 18,480.98, its biggest decline since June 16 and its lowest closing level in more than two months.Wall Street’s main indexes also closed sharply lower but not as much as the Toronto market.[.N/C]For the week, the TSX lost 4.7% as worries about the economic impact of central bank tightening overshadowed domestic data showing an easing of inflation pressures. The index has fallen about 16% from its record closing high in March. “It’s the realization that we are seeing a general slowdown in the global economy,” said Philip Petursson, chief investment strategist at IG Wealth Management. “That’s working its way into softer commodity prices.”Oil prices settled down 5.7% at $78.74 a barrel, an eight-month low, as the U.S. dollar notched its strongest level in more than two decades, while copper and gold prices fell.The Toronto market’s energy group tumbled 7.8%, while the materials group, which includes precious and base metals miners and fertilizer companies, was down 4.5%. Together, those two groups account for nearly 30% of the TSX’s weighting.Domestic data showed that retail sales fell 2.5% in July, which was more than expected, indicating interest rate increases by the Bank of Canada are slowing consumer spending.That added to pressure on the Canadian dollar. It was down 0.7% at 1.3580 to the greenback, or 73.64 U.S. cents, after touching its weakest intraday level since July 2020 at 1.3612.Meanwhile, Canadian bond yields eased across much of a flatter curve. The 10-year was down 4.8 basis points at 3.080%, unraveling some of the upswing since June.That move higher for yields in recent weeks could make bonds “an attractive opportunity over the course of the next 12 to 36 months,” Petursson said. “While yields can continue to move up you are seeing a coupon that will at least absorb some of that.” More

By David Shepardson and Joseph White(Reuters) -Rental car company Hertz Global Holdings (OTC:HTZGQ) plans to order up to 175,000 General Motors Co (NYSE:GM) electric vehicles over the next five years, its latest move toward zero-emission models.The multi-billion dollar, multi-year deal could be the first of many GM agreements to supply electric vehicles to rental car companies, said Steve Carlisle, the automaker’s North American operations chief, on a conference call.”It’s an enormous first step,” Carlisle said, adding that GM is in talks about similar deals with other rental car companies.GM shares fell more than 5% Tuesday afternoon following rival Ford Motor (NYSE:F) Co’s warning late Monday that supply chain costs were $1 billion higher than expected in the third quarter. Ford shares were down more than 11%. Automakers have cut reliance on low-profit, bulk sales to rental car agencies as supply chain problems curtailed production. Carlisle said GM expects to deliver electric vehicles to Hertz at close to retail profit margins.GM Chief Executive Mary Barra said in a statement “each rental experience will further increase purchase consideration for our products and drive growth for our company.”GM aims to have capacity to build 1 million EVs annually in North America by 2025. Carlisle said the sales to Hertz fits within that previously announced goal.Such deals would ease pressure on GM to hit EV sales targets through individual customer sales, a market dominated by Tesla (NASDAQ:TSLA) Inc.Hertz’s current goal is for one-quarter of its fleet to be electric by the end of 2024. In April, Hertz said it would buy up to 65,000 electric vehicles over five years from EV maker Polestar, a joint venture between China’s Geely and its Swedish Volvo unit. In October 2021, Hertz announced plans to purchase 100,000 Tesla electric cars, primarily the Model 3.The GM deal “spans a wide range of vehicle categories and price points — from compact and midsize SUVs to pickups, luxury vehicles,” the companies said.The first GM electric vehicles to ship to Hertz will be Chevrolet Bolt models starting early next year, Carlisle said.GM expects Hertz to deploy many of its EVs in Los Angeles and San Francisco, helping to meet California electric vehicle quotas. Hertz Senior Vice President Jeff Nieman said the company plans to offer EVs across its network, with priority to Los Angeles, San Francisco, Miami and Orlando.Hertz estimated customers could travel more than 8 billion miles in these EVs and save about 1.8 million tonnes of carbon dioxide-equivalent emissions versus gasoline-powered vehicles. More

WASHINGTON/PITTSBURGH (Reuters) -The White House on Friday said it condemned recent comments on climate change by World Bank President David Malpass, who came under fire this week after he declined to say whether he accepts the scientific consensus on global warming.“We condemn the words of the president” of the World Bank, White House press secretary Karine Jean-Pierre told reporters. “We expect the World Bank to be a global leader of climate ambition and mobilization.The Treasury Department, which oversees the U.S. engagement with the bank, “has and will continue to make that expectation clear to the World Bank leadership,” she said.Jean-Pierre spoke shortly after President Joe Biden’s top climate adviser John Podesta said Malpass, a Republican nominated by former President Donald Trump, should “not mince words” on the scientific consensus on climate change.Malpass came under fire this week from some world leaders and environmental groups after he declined to say whether he accepts the scientific consensus on global warming.Malpass on Friday acknowledged that his remarks were “unfortunate”, but said none of the bank’s shareholders had asked him to resign.Podesta, appointed earlier this month to oversee $370 billion in new U.S. climate spending, criticized Malpass at the Global Clean Energy Action Forum in Pittsburgh without mentioning his name. Malpass first addressed the concerns on Thursday in an interview with CNN International and in a separate note to staff, saying it was clear that human activity is fueling climate change and defending his record at the helm of the development bank.On Friday, he told Politico it was “unfortunate” that he responded as he did on Tuesday: “When asked, ‘Are you a climate denier?’ I should have said ‘no.’ … I really wasn’t prepared and didn’t do my best job in answering that charge.”Nonetheless, Podesta said that the World Bank leader’s hesitation on climate change is troubling given his mandate to help improve the well-being of billions of people around the world.”It is time for a leader of an organization that is responsive to billions of poor people around the world not to mince words about the fact that the science is real,” Podesta told the audience at the Pittsburgh summit.When asked if Malpass should resign, Podesta did not answer but told Reuters on the sidelines of the event that “Malpass should represent the people that the World Bank serves.” Malpass, whose five-year term is due to end in spring 2024, reiterated on Friday that he believed human activity caused climate change, while defending what he called the bank’s “forceful leadership” on climate change and its role as the leading financier of climate change projects.Asked if any shareholder had asked him to resign over the issue, Malpass said, “No, none have.”He said his comment about not being a scientist “wasn’t a good phrase for me to use,” adding, “We have a lot of input from the global scientific community. … We interact with scientists.”The president of the United States traditionally nominates World Bank presidents, subject to confirmation by the bank’s board. The Treasury declined to comment when asked if it supported a second term for Malpass when his term ends in 2024. More

LONDON (Reuters) – Britain’s new economic agenda represents the biggest gamble for growth in a major Western democracy in at least 40 years, for which the chance of success fell instantly as investors ditched sterling assets.Prime Minister Liz Truss’s “Growth Plan” is Britain’s second roll of the dice at economic renewal following the 2016 vote for Brexit which, so far at least, has failed to yield returns.Investors reacted with dismay to the combination of free spending, unfunded tax cuts and huge increases in government borrowing announced by finance minister Kwasi Kwarteng on Friday.His statement marked a step change in British economic policy, harking back to the Thatcherite and Reaganomics doctrines of the 1980s that critics have derided as a return to “trickle down” theory.The pound crashed below $1.09 for the first time since 1985 and British government bonds suffered the biggest daily fall in decades.International observers looked on with bewilderment, even if business groups at home saw merit in many of the plans outlined by Kwarteng, who says low growth is the real gamble.”I’ve rarely seen an economic policy that is as uniformly panned by economic experts and financial markets,” said Harvard professor Jason Furman, former chair of the U.S. Council of Economic Advisers during Barack Obama’s presidency.”It shockingly came in below the low expectations that almost everyone had,” he added.Willem Buiter, a former Bank of England rate-setter and Citi’s chief global economist until 2018, said Kwarteng’s plans to ramp up borrowing were “totally, totally nuts”.”From a cyclical perspective it is, I think, a disaster,” Buiter said, adding that he had no objection in principle to tax cuts for firms and households with a better fiscal balance.”It’s probably the epitome of casino macroeconomics,” said Jacob Kirkegaard, nonresident senior fellow with the Washington- based Peterson Institute for International Economics think tank.In Germany, the director of the German Council on Foreign Relations (DGAP) Guntram Wolff said Truss’s plans amounted to a “Singapore-on-Thames” attempt to deregulate Britain’s economy and boost the City of London.”The economy has more than the City… It is no surprise that pound sterling has lost today,” he said.SLOWLY, THEN ALL AT ONCEOn Thursday Kwarteng said his plans to grow the economy would “build stronger capacity to alleviate inflationary pressure”. On Friday, those plans sparked a market meltdown that will only exacerbate inflation in the months, and possibly years ahead – automatically raising the bar for the eventual success of Kwarteng’s plan. U.S. investment bank Citi said sterling risked a confidence crisis among international investors.”The risk now is that the UK government has diminished its credibility at one stroke, and you saw that with the market runoffs,” said Dan Hamilton, nonresident senior fellow at the Brookings Institution, a U.S. think tank.The collapse in investor sentiment leaves Bank of England Governor Andrew Bailey with a serious problem.”Fiscal and monetary policy are now at war with each other in the UK,” Furman said.Hamilton agreed, adding that this tension was not evident in other major economies. In financial markets, a small number of analysts predict that the BoE will be forced to raise interest rates before its next interest rate meeting.”I think if you if you were Andrew Bailey and you were looking just at the detail of the market moves, you would already have called an emergency meeting,” said Kirkegaard.HISTORY LESSONSBuiter said he could think of few historical parallels for Britain’s new fiscal approach, even if there were superficial similarities with the tax-cutting Thatcher years.Britain’s Institute for Fiscal Studies compared Kwarteng’s statement to a budget in 1972 that similarly sought to double Britain’s rate of economic growth, but is widely remembered as a disaster for its inflationary effect.Furman doubted that Truss would be able to implement her plans before running into some economic hard truths, as happened to Ronald Reagan in the early 1980s.The U.S. Republican president was forced to U-turn on a major tax-cutting drive as the U.S. Federal Reserve jacked up interest rates. Furman said Truss might also have no choice but to undo some of her plans if Britain’s debt problems start to spiral because of higher interest rates.”Sometimes a country’s hand is forced,” he said.($1 = 0.9111 pound) More

The companies signed up for $8.8 billion in new loans, leases and lines of credit last month, compared with $8.5 billion a year earlier, according to the Equipment Leasing and Finance Association (ELFA). Borrowings were up 5% from January.”With the Fed’s most recent 75-basis-point jump in short-term interest rates, and the prospect of a hard landing, time will tell whether — and to what extent — these same business owners continue to grow and invest in equipment,” ELFA Chief Executive Ralph Petta said in a statement.ELFA, which reports economic activity for the nearly $1-trillion equipment finance sector, said credit approvals totaled 75.2%, down from 78% in July. The Washington-based body’s leasing and finance index measures the volume of commercial equipment financed in the United States.The index is based on a survey of 25 members, including Bank of America Corp (NYSE:BAC), and financing affiliates or units of Caterpillar Inc (NYSE:CAT), Dell Technologies (NYSE:DELL) Inc, Siemens AG (OTC:SIEGY), Canon Inc and Volvo AB (OTC:VLVLY).The Equipment Leasing & Finance Foundation, ELFA’s non-profit affiliate, said its confidence index in September stood at 48.7%, compared with 50% in August. A reading above 50 indicates a positive business outlook. More