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Daily Pulse


Circle K owner Alimentation Couche-Tard Inc. is taking its electric car strategy to North America after learning from consumer habits in northern Europe. The Laval, Quebec-based convenience store giant will add charging stations at locations on the west coast of the U.S. and Canada and in its home province, Chief Executive Officer Brian Hannasch said in an interview Wednesday. Longer term, the company wants to expand into at-home vehicle charging in North America, as it’s doing in Norway.

The world’s biggest gold producer sees the price of the precious metal remaining “elevated” as governments continue pandemic stimulus spending, but don’t expect that to change Newmont Corp.’s focus on fiscal “discipline” any time soon. Gold skyrocketed to record heights above $2,000 an ounce in August, helping lift miners’ cash flow, stock prices and likely the hopes of shareholders expecting higher returns. Spot gold has since dipped a bit, but the haven metal is still trading in record territory above $1,900. “There are a lot of signals that point to gold staying at these elevated levels – with I think a lot of volatility around it – for some time to come,” Newmont Chief Executive Officer Tom Palmer said by phone. Despite the high prices and cash flow those generate for miners, Palmer plans to stay focused on such things as improving margins, investing in existing projects that make money at lower prices, and ensuring that balance sheets are well maintained. “At Newmont, when we talk about discipline, it’s about continuing to run our business profitably at the bottom of the price cycle, at $1,200,” Palmer said.


August's retail sales print came in weaker than expected at 0.6% month over month, missing expectations of 1% and down from July's revised print of 0.9%. Meanwhile, the retail sales control group actually contracted by 0.1% and failed to meet expectations of 0.3%. This is the first sign that the expiry of the $600 per week unemployment insurance top-up by the federal government is negatively impacting consumption. If Congress waits until January to pass a stimulus bill, the stimulus won't reach consumer's pockets until March. This will cause consumption to decline if the household savings rate does not fall significantly. However, the savings rate is unlikely to decrease much because of rising permanent joblessness and the high uncertainty surrounding the evolution of the disease will weigh on consumer confidence.

In response to the production shutdowns and decreased run rates that have plagued the US and global economy since March, US inventories contracted at their quickest three-month rate since the depth of the Great Financial Crisis. Yet, as the economy re-opens and remains resilient in the face of a rampant second wave of infections, business sales experienced their sharpest three-month increase on record. In response to the extreme bifurcation between inventories and sales, the sales-to-inventories ratio registered its quickest improvement in the history of the data. If the past is any guide, the sharp uptick in this indicator suggests that the recovery in US industrial production has much further to run in the coming quarters. A pronounced improvement in industrial production will result in a more rapid increase in capacity utilization, which along with a weak USD, will foment positive inflation surprises next year. As a result, inflation expectations have more upside, especially in light of the Federal Reserve’s willingness to tolerate higher inflation.

Snowflake Inc. soared in a euphoric stock- market debut that transformed the eight-year-old software company into business valued at more than $70 billion. Snowflake’s $3.36 billion initial public offering is a record for a software company and the biggest in the U.S. this year. Its share price soared as much as 166% Wednesday, minting fortunes inside the company and across Silicon Valley. Shares of the cloud-data software maker opened at $245 – more than double its IPO price – in New York trading. That 104% gain at the opening bell was the third-highest such pop for an IPO of $1 billion or more on a U.S. exchange and the biggest since Florida-based equipment rental company Herc Holdings Inc. went public in 2006. Snowflake sold 28 million shares at $120 apiece on Tuesday. They were earlier marketed for $100 to $110 each after the range was boosted from $75 to $85. The shares, which reached as high as $319, closed up 112% to $253.93 in New York trading, giving it a market value approaching six times the $12.4 billion it received in a private funding round in February.


Global coronavirus cases are nearing 30 million, with the death toll approaching 1 million. India reported almost 98,000 new infections, a fresh daily record that further added to what’s already the world’s second largest tally.

European car sales plunged by nearly a fifth in August, dashing hopes that the industry was starting to recover from the pandemic and suggesting that the market could remain depressed through year-end.


The post-COVID 19 recovery in China’s household consumption has lagged behind other economic segments, such as production and exports. Notably, the pace of consumer spending growth started decelerating almost two years before the pandemic struck the country. Furthermore, Chinese households have added a total of 8.3 trillion yuan to their bank deposits so far this year, or about 8% of China’s 2019 national output. Outsized cash savings helped to cushion consumers from the pandemic’s economic impact and will support a consumption rebound as China’s economic and service sector activities continue to normalize. However, an acceleration in cash savings and decline in households' propensity to spend would not bode well for a structurally balanced economic growth model.

The author

Michel Doucet

Michel Doucet

Vice-President and Portfolio Manager
After obtaining a Bachelor's degree from the Faculty of Social Sciences at the Université du Québec in Montréal and his Master’s degree, Michel Doucet began his career as a junior economist at the National Bank head office in Montreal. In 1992 he joined the institutional equities and fixed income group at Lévesque Beaubien Geoffrion as an economist and market analyst. Over the years, he has led various projects related to the North American and international economies as well as Canadian public finances. In 1996, the team of institutional economists to which he belongs was ranked first in Canada by Brendan Wood International. In August 1997, Mr. Doucet joined the personal services division of Lévesque Beaubien Geoffrion where he served as an economist, fixed income market analyst and vice president. In 2004, he joined the Desjardins Securities full service team as Vice President. He now occupies the roles of fixed income strategist, economist and portfolio manager. He manages the Securities Portfolio Advisory Group, advisor marketing and distribution of financial planning and insurance.