Canadian housing starts jump 30% in April, CMHC says
TORONTO, May 15 (Reuters) - Canadian housing starts rose 30% in April compared with the previous month, a far bigger increase than was expected, data from the national housing agency showed on Thursday.
The seasonally-adjusted annualized rate of housing starts climbed to 278,606 units from a revised 214,205 units in March, the Canadian Mortgage and Housing Corporation (CMHC) said. Economists had expected starts to rise to 227,500.
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Reuters
an hour ago
- Reuters
TRADING DAY Good vibrations turn sour
ORLANDO, Florida, June 11 (Reuters) - TRADING DAY Making sense of the forces driving global markets By Jamie McGeever, Markets Columnist I'm excited to announce that I'm now part of Reuters Open Interest (ROI), an essential new source for data-driven, expert commentary on market and economic trends. You can find ROI on the Reuters website, and you can follow us on LinkedIn and X. The US and China have reached a trade deal, or at least agreed on the framework of a deal, which together with surprisingly soft U.S. inflation data, gave markets a lift on Wednesday. But Wall Street's gains were mild, and they were later wiped out by rising tensions in the Middle East. In my column today I look at the 'equity risk premium' and other metrics that suggest relative U.S. equity and bond valuations are getting very stretched. More on that below, but first, a roundup of the main market moves. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves Good vibrations turn sour It's a "done" deal, according to U.S. President Donald Trump, although the he and Chinese leader Xi Jinping still have to finalize the wording of the trade agreement between the two superpowers and sign off on it. The main points of the deal appear to be: China will remove export restrictions on rare earth minerals and other key industrial components; U.S. tariffs on Chinese goods will total 55%; Chinese tariffs on U.S. goods will total 10%. Trump could not have been more enthusiastic in his praise for the agreement on Wednesday, and Commerce Secretary Howard Lutnick said 'deal after deal' with other countries will follow in the weeks ahead. Yet, judging by the relatively muted market reaction, investors are less enthused. And given the chaotic and unpredictable nature of the Trump administration's tariff announcements thus far, the irony of Treasury Secretary Scott Bessent calling on China to be a "reliable partner" in trade negotiations will not be lost on some observers. Especially, one suspects, in Beijing. Based on these proposed China levies, and with the US expected to conclude more trade deals in the coming weeks, the overall U.S. effective tariff rate will be lower than feared a couple of months ago. That's a relief. But the effective tariff rate of around 15% that many economists expect will still be significantly higher than the 2.5% rate at the end of last year, and would be the highest since the 1930s. Also, as the May inflation figures showed, tariffs have yet to be felt on prices. Investors - and Fed policymakers, who meet next week - are in a state of limbo. How will corporate profits and consumer spending be affected? What proportion of the tariffs will companies "swallow", and how much will they pass on to their customers? Zooming out, inflation appears to be cooling around the world, although this trend is expected to reverse once tariffs start to fuel higher goods price inflation. Figures on Wednesday showed that U.S. consumer inflation and Japanese wholesale inflation were lower than expected in May. These reports follow similar numbers from Europe recently, and China remains stuck in its battle against deflation. Next up is India, which releases consumer inflation figures on Thursday, which are expected to show annual inflation slowed to 3.0% in May, the lowest in more than six years. Another focus for investors on Thursday will be the auction of 30-year U.S. Treasury bonds. US stocks-bonds warnings flash amber again Calm has descended on U.S. markets following the 'Liberation Day' tariff turmoil of early April. But Wall Street's rally has revived questions about U.S. equity valuations, as stocks once again look super pricey compared to bonds. Since the chaotic days of early April, U.S. equities have rebounded fiercely, with the S&P 500 up 25%, putting the Shiller cyclically adjusted price-earnings (CAPE) ratio for the index in the 94th percentile going back to the 1950s, according to bond giant PIMCO. Stocks are looking expensive in absolute terms, and in relation to bonds. The equity risk premium (ERP), the difference between equity yields and bond yields, is near historically low levels. According to analysts at PIMCO, the ERP is now zero. The previous two times it fell to zero or below were in 1987 and 1996–2001. In both instances, the ultra-low ERP precipitated a steep equity drawdown and sharp fall in long-dated bond yields. "The U.S. equity risk premium ... is exceptionally low by historical standards," they wrote in their five-year outlook on Tuesday. "A mean reversion to a higher equity risk premium typically involves a bond rally, an equity sell-off, or both." But reversion to the mean doesn't just happen by magic. A catalyst is needed. Equities have recovered largely because they were oversold in April, trade tensions have been dialed down, and investors remain confident that Big Tech will drive solid AI-led earnings growth. So even though huge economic, trade, and policy risks continue to hang over markets, there is no sign of an imminent catalyst that would cause an equity market selloff. The flip side of equities looking expensive is that bonds look like a bargain. Indeed, the relative divergence between stocks and bonds is such that, by one measure, U.S. fixed income assets are the cheapest relative to equities in over half a century. Using national flow of funds data from the Federal Reserve, retired strategist Jim Paulsen calculates that the total market value of U.S. bonds as a percentage share of the total market value of U.S. equities is the lowest since the early 1970s. "Since the aggregate U.S. portfolio is currently aggressively positioned, investors may have far more capacity and desire to boost bond holdings in the coming years than most appreciate," Paulsen wrote last week. But bonds are 'cheap' for a reason. Washington's profligacy – the reason ratings agency Moody's recently stripped the U.S. of its triple-A credit rating – and inflation worries have kept yields stubbornly high. The term premium - the risk premium investors demand for holding long-term debt rather than rolling over short-dated loans - is the highest in over a decade, reflecting concerns about Uncle Sam's long-term fiscal health. And the diagnosis here shows no signs of improving. Trump's 'Big Beautiful Bill' is expected to add $2.4 trillion to the U.S. debt over the next decade, according to the nonpartisan Congressional Budget Office, likely putting more upward pressure on yields. Of course, equity investors do seem to be pricing in a very rosy scenario, and the past few months have shown how quickly the market landscape can change. The U.S. economy could weaken more than expected, the trade war could escalate, or there could be a geopolitical surprise that causes bond yields and equity prices to fall. Investors should therefore be mindful of the warnings being sent by ERPs and other absolute and relative valuation metrics. However, they should also remember that stretched valuations can get even more stretched. As the famous saying goes, markets can stay irrational longer than investors can remain solvent. What could move markets tomorrow? Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, opens new tab, is committed to integrity, independence, and freedom from bias.
North Wales Chronicle
3 hours ago
- North Wales Chronicle
Mike Lynch's sunken superyacht to be lifted in late June as debris is found
Maritime and investigatory authorities in Sicily approved the final recovery plan following surveys of the seabed and wreck. The stern section of the Bayesian will be temporarily lifted using Hebo Lift 10 — one of Europe's most powerful sea cranes — allowing crews to attach the straps needed to raise the entire yacht later this month. The vessel is expected to be brought to the surface on or around June 26, subject to no further delays, it is understood. It was originally expected to be raised last month but salvage efforts were delayed after a diver died during underwater work on May 9, prompting greater use of remote-controlled equipment. To lift the 56-metre (184ft) vessel, eight steel straps will be attached beneath it, with four messenger lines already fed under the front. The 72-metre mast will be removed using precision cutting tools and the yacht will be rolled upright and lifted using a custom steel cable system. A full underwater survey around the wreck using remote-operated equipment found 17 possible pieces of debris, including a life raft casing and deck furniture, which have been recovered and brought to nearby Termini Imerese – a town where Italian prosecutors investigating the sinking are based. Marcus Cave of British firm TMC Marine, which is overseeing the salvage efforts, said: 'Following detailed engineering assessment and discussions with the authorities, the works on site are now progressing towards the recovery of the wreck. 'The salvage teams will now hopefully be able to make more systematic progress in preparations for the ultimate safe recovery of Bayesian, whilst ensuring that safety of those working on this very complex lifting and recovery operation and environmental protection continue to be prioritised.' Billionaire Mr Lynch, 59, and his daughter Hannah, 18, were among seven people who died when the Bayesian sank off the coast of the Italian island on August 19. About 70 specialist personnel had been mobilised to the fishing village Porticello from across Europe to work on the recovery operation, which began last month. Inquest proceedings in the UK are looking at the deaths of Mr Lynch and his daughter, as well as Morgan Stanley International bank chairman Jonathan Bloomer, 70, and his wife, Judy Bloomer, 71, who were all British nationals. Marine Accident Investigation Branch (MAIB) investigators said in an interim report that the Bayesian was knocked over by 'extreme wind'. The yacht had a vulnerability to winds but the owner and crew would not have known, the report said. The others who died in the sinking were US lawyer Chris Morvillo and his wife Neda Morvillo, and Canadian-Antiguan national Recaldo Thomas, who was working as a chef on the vessel. Fifteen people, including Mr Lynch's wife, Angela Bacares, were rescued. Mr Lynch and his daughter were said to have lived in the vicinity of London and the Bloomers lived in Sevenoaks in Kent. The tycoon founded software giant Autonomy in 1996 and was cleared in June last year of carrying out a massive fraud over the sale of the firm to Hewlett-Packard (HP) in 2011. The boat trip was a celebration of his acquittal in the case in the US.
South Wales Guardian
3 hours ago
- South Wales Guardian
Mike Lynch's sunken superyacht to be lifted in late June as debris is found
Maritime and investigatory authorities in Sicily approved the final recovery plan following surveys of the seabed and wreck. The stern section of the Bayesian will be temporarily lifted using Hebo Lift 10 — one of Europe's most powerful sea cranes — allowing crews to attach the straps needed to raise the entire yacht later this month. The vessel is expected to be brought to the surface on or around June 26, subject to no further delays, it is understood. It was originally expected to be raised last month but salvage efforts were delayed after a diver died during underwater work on May 9, prompting greater use of remote-controlled equipment. To lift the 56-metre (184ft) vessel, eight steel straps will be attached beneath it, with four messenger lines already fed under the front. The 72-metre mast will be removed using precision cutting tools and the yacht will be rolled upright and lifted using a custom steel cable system. A full underwater survey around the wreck using remote-operated equipment found 17 possible pieces of debris, including a life raft casing and deck furniture, which have been recovered and brought to nearby Termini Imerese – a town where Italian prosecutors investigating the sinking are based. Marcus Cave of British firm TMC Marine, which is overseeing the salvage efforts, said: 'Following detailed engineering assessment and discussions with the authorities, the works on site are now progressing towards the recovery of the wreck. 'The salvage teams will now hopefully be able to make more systematic progress in preparations for the ultimate safe recovery of Bayesian, whilst ensuring that safety of those working on this very complex lifting and recovery operation and environmental protection continue to be prioritised.' Billionaire Mr Lynch, 59, and his daughter Hannah, 18, were among seven people who died when the Bayesian sank off the coast of the Italian island on August 19. About 70 specialist personnel had been mobilised to the fishing village Porticello from across Europe to work on the recovery operation, which began last month. Inquest proceedings in the UK are looking at the deaths of Mr Lynch and his daughter, as well as Morgan Stanley International bank chairman Jonathan Bloomer, 70, and his wife, Judy Bloomer, 71, who were all British nationals. Marine Accident Investigation Branch (MAIB) investigators said in an interim report that the Bayesian was knocked over by 'extreme wind'. The yacht had a vulnerability to winds but the owner and crew would not have known, the report said. The others who died in the sinking were US lawyer Chris Morvillo and his wife Neda Morvillo, and Canadian-Antiguan national Recaldo Thomas, who was working as a chef on the vessel. Fifteen people, including Mr Lynch's wife, Angela Bacares, were rescued. Mr Lynch and his daughter were said to have lived in the vicinity of London and the Bloomers lived in Sevenoaks in Kent. The tycoon founded software giant Autonomy in 1996 and was cleared in June last year of carrying out a massive fraud over the sale of the firm to Hewlett-Packard (HP) in 2011. The boat trip was a celebration of his acquittal in the case in the US.
