Roger Aliaga-Díaz on Canada’s economic outlook

 On this week’s episode of Free Lunch by The Peak, we sat down with Roger Aliaga-Díaz, Vanguard's Global Head of Portfolio Construction and Chief Economist for the Americas, to talk about his outlook for the economy in the year ahead and how the last cycle is shaping his thinking. 

Feds considering cap on international students

The federal government will look at capping the number of international students admitted to Canada in the coming months, Immigration Minister Marc Miller told reporters, saying the system “has gotten out of control.” 

Why it matters: The number of people coming to study in Canada from abroad has surged, climbing to around 900,000 last year, and worsening a housing shortage that’s driven rents up by 22% over the past two years.

The holiday market rally is ruined

Investors are starting to question the existence of Santa Claus… as far as the guy with the big, white, fluffy beard relates to markets, that is. 

Driving the news: Experts are backtracking on the once-sure bet of the "Santa Claus Rally," a phenomenon where markets surge during the last five trading days of a year — which means it starts today — and the first two of the next, according to The Wall Street Journal.

Temporary residents drive population boom

Better start baking those welcome cookies now, because you’ve got a million new neighbours to welcome.

What happened: Canada’s population grew by more than 1 million over the first nine months of the year, according to newly released Statistics Canada data.

Dropping your living standards

The Canadian economy has avoided a technical recession after economists updated the numbers that triggered alarm bells earlier this year. That’s #EconomistMath. 

What happened: Gross domestic product (GDP) data shows the economy shrank by 1.1% last quarter from the previous year, falling above the 0.1% rise expected by economists and the Bank of Canada’s forecast of 0.8%, a steep drop from growth seen earlier this year.

An update on the fall economic update

Are you self-conscious about your spending? Luckily, you don’t have to broadcast it to the entire nation like the federal government will later today in its fall economic update

Driving the news: The update — which we must note is merely a statement on the budget and not a new budget — will focus on two top-of-mind matters: Housing and affordability. 

Big deals come early

In a bid to spread holiday cheer (read: get folks spending), retailers are expected to offer steeper discounts earlier this year.

Driving the news: Many major shopping destinations started Black Friday sales two weeks in advance, experts told Bloomberg, and, per Square’s holiday retail report, Canadian retailers plan to offer shoppers an 18% discount on average (a higher rate than U.S. stores).

Pre-tip your driver or risk slow delivery, DoorDash users warned

Want your late-night Big Mac order to arrive at least a little bit warm? Better tip your delivery driver ahead of time. 

Driving the news: DoorDash is testing a change to its service that will ask customers to add a tip at checkout and warn them that failing to do so could mean their delivery will take longer.

Winter may be here for the hot job market

When new economic data from Canada, the US, and the EU all tell a similar story… we’d call that a trend worth noting.

What happened: A flurry of new jobs data is showing a sharp slowdown in hiring across Western economies.

What’s going on with the loonie?

Pros of Canadian currency compared to US currency: Comes in several fun colours, and features the majestic loon. 

Cons of Canadian currency compared to US currency: It’s less valuable, and dropping lower. 

Driving the news: The Canadian dollar was trading at around six-month lows at market close yesterday and runs the risk of falling as low as US$0.71 per Monex Canada analysis.