 Welcome to Mind Your Business ! Consider this your weekly guide to understanding what’s happening in the worlds of economics, business and finance. By Peter Armstrong | | |  | Inflation numbers out on Tuesday will shape the economy for months to come. (xtock/Shutterstock) | | | It's been a while since a number carried this much consequence.
Every month, we gather around our computers to pore over the latest jobs data, the latest GDP figures or the latest inflation signals.
This one feels different, sort of heightened.
On Tuesday morning, we will get the newest inflation numbers.
That single release will shape the economy for the next few months.
If inflation comes in unexpectedly hot, it will have real consequences for Canadian households, businesses, governments and central banks.
Last week, we got the U.S. data. Those numbers show price growth actually cooled more than expected. Core inflation decreased for the first time in six months.
That won't have much of an impact here, but it doesn't hurt. Canadian consumers and businesses buying products from the U.S. likely saw slightly less upward pressure on those purchases.
In Canada, most economists believe price growth ticked down slightly from 2.9 per cent in March to 2.7 per cent last month.
Here's how things stand heading into this week. | | |  | | | The inflation numbers are really only half the problem. If price growth moderates, we still have high interest rates to contend with.
But if this week's numbers continue down the same path they've been on since the peak back in 2022, that should open the door for the Bank of Canada to start cutting rates.
There is some disagreement on whether the central bank is going to cut in June or July.
But it's a safe bet that progress on the inflation file will put a fair amount of pressure on the central bank to cut sooner rather than later.
According to data released by the bank earlier this month, no less than half of Canadian mortgage holders are set to renew at higher prices.
Bank of Canada governor Tiff Macklem said he believes those households can weather higher rates, but he also said that assessment was based on the assumption that rates would come down.
"If that doesn't materialize, the risk will be bigger," he said at a news conference in Ottawa in early May.
The question is how the bank would look at another slight uptick in the rate of inflation.
I think that would depend on what's driving inflation.
Any variable-rate mortgage holders or renters could tell you what the biggest driver of higher costs is right now. | | |  | | | So, hold onto your hats. Inflation numbers will be released at 8:30 a.m. ET on Tuesday.
We will have full coverage on CBC Radio and TV. Visit our website at cbc.ca/business or visit the Statistics Canada website to check out the numbers for yourself.
What do you think these numbers will bring?
As always, send me a note.
My email is: peterarmstrong@cbc.ca | | |  | | Canadian inflation numbers will be released on Tuesday. Most economists believe inflation ticked down slightly to 2.7 per cent last month. | | | | | | New data this week should show how resilient the Canadian consumer has been this winter. Look for retail sales numbers on Friday. | | | | | | The New Housing Price Index will also be released on Friday. This is the measure of new home prices that the Bank of Canada uses in its inflation calculations, so keep an eye on how it differs from the CREA release. | | | | | Three things to read, watch and listen to this week | | |  | Is AI going to take over? (Stokkete/Shutterstock) | | | 1. The AI arms race | | | OpenAI released its latest ChatGPT chatbot last week.
The demo was, frankly, kind of bonkers. This iteration of the AI can respond to voice commands, but also look at images and videos.
One of the demos showed a man asking the software to tutor his son in a math lesson. The man uses the camera on his phone to "show" the chatbot a triangle with angles and the lesson begins.
In another demo, ChatGPT is asked to come up with a bedtime story about robots and love.
Its skill is remarkable. But it's just one company using one chatbot to change how we connect to information.
And everyone is approaching that differently.
"As Apple and Google transform their voice assistants into chatbots, OpenAI is transforming its chatbot into a voice assistant," wrote Cade Metz in the New York Times.
Wired magazine's amazing tech columnist Lauren Goode wrote a typically wonderful piece entitled: "It’s the End of Google Search As We Know It."
She was at Google’s developer conference in California last week, and she noticed a key change in the tech company's approach.
"AI is now underpinning nearly every product at Google, and the company only plans to accelerate that shift," wrote Goode.
One of my favourite tech writers has been warning about that precise thing for years now. Nilay Patel, editor-in-chief of The Verge, is quoted in a New York Times article last year about how AI is reshaping the search landscape.
He's worried that Google may change its mind about what it's interested in, just like other social media companies have.
Patel "had seen Facebook stop linking out to websites and foresaw Google following suit in a bid to boost its own business," says the Times piece.
"[Patel] predicted that visitors from Google would drop from a third of websites’ traffic to nothing. He called that day 'Google zero.'"
If indeed chatbots are going to change and maybe even replace search engines, the next question is what those new iterations will want in terms of content. And will the groups and individuals making content today still be in demand in this new normal?
Check out the OpenAI demo here.
Read Lauren Goode's piece in Wired here.
Read the New York Times article here. | | | Meme stocks are back | | | It was a wild week for stonks.
The army of day traders that took on Wall Street during the pandemic came roaring back to life, and suddenly stocks like AMC and GameStop were back in the news.
Roaring Kitty, one of the best-known figures that led the last charge, was back at the virtual helm.
"Keith Gill, popularly known among traders as 'Roaring Kitty,' shared a series of cryptic posts on social media platform X on Sunday following a three-year gap. One of them included a sketch of a man leaning forward in a chair, a popular meme among gamers that indicates things are getting serious," wrote Sruthi Shankar and Medha Singh in Reuters.
The week kicked off with the kinds of gains that made headlines when the Wall Street Bets Subreddit internet community saw day traders backing stocks many considered dead or dying.
AMC soared by 300 per cent on Tuesday, prompting questions about where things would go from there. Not everyone was convinced.
"While the moves are sending vibrations through the market that feel like the 2021 meme stock mania, Wall Street strategists say this fresh burst of enthusiasm is far from the madness of three years ago," wrote Josh Schafer, a reporter with Yahoo Finance.
AMC had been trading for about $2.95 US to start the week. It skyrocketed to $11.82 by Tuesday, but then collapsed back to $4.40 by the end of the week.
And some saw evidence that Wall Street was getting a piece of the mania this time.
"While the so-called 'Reddit Raiders' that propelled GameStop and AMC 'to the moon' in 2021 certainly made a cameo, more sophisticated investors — who use machine learning and algorithms to trade on momentum, and can even front-run the buying and selling of individual investors — appear to have been in on the action," wrote Bailey Lipschultz in Bloomberg.
Lipschultz analyzed data from Fidelity’s retail trading platform, and found more sell than buy orders were placed since the Roaring Kitty tweet went viral.
"That’s a signal that individuals are actually cashing in on the gains. The number of orders are also a fraction of what they were at 2021’s peak," Lipschultz wrote.
Check out the Reuters piece here.
Check out the Yahoo Finance article here.
Check out the Bloomberg analysis here. | | | 3. Revisiting Bre-X | | | I'm still fascinated by the Bre-X story.
Some of you might remember it well. In the late 1990s, a Canadian gold company found vast deposits in a mine in Indonesia.
Value of the company soared to $6 billion Cdn. But it turned out to be a scam. Bre-X's shares collapsed. The company would eventually file for bankruptcy. That collapse didn't just hit individual investors. The Ontario Teachers Pension Plan and the Quebec Public Sector Pension Fund lost more than $150 million combined.
I have always wondered what the people who carried out the scam were thinking. Like, what did they expect would happen?
Well, a new podcast just may offer some answers.
The $6 Billion Gold Scam is a nine-part co-production from CBC and the BBC World Service hosted by Suzanne Wilton.
“I have been chasing Bre-X ghosts for 25 years, trying to unravel the biggest gold hoax in history," said Wilton.
"I travelled to the Borneo jungle, to Manila, to small-town Alberta in search of answers. In this series, I revisit this story, uncovering new revelations about the mysterious death of Bre-X geologist Michael de Guzman, and the scam that saw ordinary people lose their life savings, and other investors lose millions overnight, which for some was too big a loss to bear,” she said.
The first episode dropped on Sunday.
Check out The Six Billion Dollar Gold Scam here. | | | How the economy looks beyond Bay Street | | | Banking on the bank of Mom and Dad | | | The housing market is a mess. Affordability remains at crisis levels.
And yet, young people still seem to find a way into the market. I have often wondered how they can afford it.
Well, it turns out, many of them can't.
The wonderful newsletter TLDR, a weekly read sponsored by Wealthsimple, had this chart in a recent edition showing how many millennials are relying on help from their parents. | | |  | That graphic is a great example of why I love the newsletter.
It's smart, interesting and gets straight to the point.
Do yourself a favour and check it out here. | | | Share this newsletter | | or subscribe if this was
forwarded to you. | | |  | | | On the lookout for more consumer news? The Marketplace Watchdog newsletter is your weekly look at exclusive investigations and consumer tips and tricks to help you and your wallet. Subscribe now. | | | | | |
