SAN FRANCISCO, Dec. 15, 2021 /PRNewswire/ -- Reddit, Inc. today announced that it has confidentially submitted a draft registration statement on Form S-1 with the Securities and Exchange Commission (the "SEC") relating to the proposed initial public offering of its common stock. The number of shares to be offered and the price range for the proposed offering have not yet been determined. The initial public offering is expected to occur after the SEC completes its review process, subject to market and other conditions.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act of 1933, as amended ("Securities Act"). This announcement is being issued in accordance with Rule 135 under the Securities Act.
If you’re wondering what inflation will be like in 2022, economists have a go-to answer: it really depends on just how the Omicron wave of COVID-19 evolves.
“We’re pretty comfortable with the notion that if we can get the global supply chain unglued … inflation will come down over time from where it is now,” says Avery Shenfeld, chief economist at CIBC.
“The problem is, unless you have a crystal ball on COVID and know when we’re going to have enough of the world’s population vaccinated so we don’t keep getting these disruptions to manufacturing and shipping around the world, it’s very difficult to predict how long that’s going to take,” he adds.
Canada’s inflation rate held steady at 4.7per cent in November, matching the reading from October, which was the highest since February 2003, Statistics Canada said on Dec. 15.
Bank of Canada governor Tiff Macklem has called the current bout of rapidly rising prices “transitory but not short-lived.” The central bank has attributed inflation to worldwide supply snarls that are pushing up the prices of anything from food to new vehicles, a rebound in the price of some goods that had become cheaper in the earlier stages of the pandemic, and soaring energy costs.
The federal government’s fall fiscal update, which Deputy Prime Minister and Finance Minister Chrystia Freeland tabled on Dec. 14, warns the rapid spread of the Omicron variant “clouds” the outlook for inflation.
“The path forward will depend on a number of tailwinds and headwinds, which could either bolster the recovery or push it off course. Of concern, the global health situation has deteriorated in recent weeks, with resurgences of COVID-19 in some regions and the emergence of a new variant, Omicron,” the update reads.
Rising case counts tied to the new variant could further complicate global supply chain challenges but also slowed energy demand, temporarily dampening energy prices, economists told Global News.
Omicron and travel restrictions
Omicron and travel restrictions
Inflation likely to remain elevated next year
Another spike in COVID-19 cases could throw a wrench in the process of getting factory production and global shipping capacity back to normal, Shenfeld says.
Still, some of the factors that drove up prices in 2021 might “ebb somewhat” in 2022, says Doug Porter, chief economist at BMO.
Auto prices, for example, are unlikely to rise as much as they did this year amid the global chips shortage, he says. And Canada’s home prices are also unlikely to replicate the gravity-defying climb of 2021, he adds.
In a report released on Dec. 15, Royal LePage said it expects the aggregate price of a home in Canada to rise 10.5 per cent year-over-year in 2022. While significant, that price gain would be smaller than the year-over-year increases recorded throughout 2021.
In November, for example, Canada’s average home sale price was $720,850, up nearly 20 per cent from the same month last year, according to the latest available data from the Canadian Real Estate Association.
Still, food inflation may yet get worse before it gets better due to the global supply chain logjams, high energy prices and extreme weather events that have curtailed crop yields.
Food prices are expected to rise between five and seven per cent in 2022, the steepest increase yet forecasted by Canada’s Food Price Report, which has been estimating food inflation for the past 12 years. Restaurant meals, dairy, vegetable and bakery prices will deliver the biggest hit to Canadians’ bottom lines, with the average family of four expected to spend an additional $1,000 a year on groceries over the next 12 months.
Overall, BMO expects inflation to average around 3.5 per cent in 2022, much higher than what Canadians have become accustomed to over the past 20 years, but lower than the rate seen over the past few months.
Bank of Canada renews inflation target, Freeland says
Bank of Canada renews inflation target, Freeland says
Omicron could temporarily result in lower gas prices
The spread of Omicron could temporarily lower prices at the pump by once again depressing global demand for travel and delaying the return to the office for commuters around the world, says Rory Johnston, founder of the Commodity Context newsletter.
Oil prices dropped to around US$73 ($94) a barrel on Tuesday after the International Energy Agency predicted Omicron would dent global demand recovery.
But any dip in gas prices would likely be short-lived, Johnston adds.
OPEC+, which includes members of the Organization of the Petroleum Exporting Countries and other producers like Russia, plans to boost supply every month by 400,000 barrels per day after sharply cutting output last year.
On the other hand, U.S. oil production likely won’t increase as much as it has done in the past in response to previous increases in oil prices, Johnston says.
U.S. oil producers seem keen to reward stockholders with share buybacks and dividend increases rather than spending cash to invest and boost output, he adds.
While motorists may see a bit of a reprieve in the first three months of the year, Johnston says gasoline prices are likely to climb back up later on in the year, making for an expensive driving season in 2022.
How inflation could impact the housing market in 2022
How inflation could impact the housing market in 2022
Interest rate still likely in the spring
Despite the economic uncertainty tied to Omicron, economists still expect the Bank of Canada to go ahead with interest rate hikes starting in the spring of 2022.
Higher interest rates make it more expensive to borrow, cooling down economic activity and putting downward pressure on inflation.
“We still think that the Bank of Canada can start raising interest rates in the spring,” Shenfeld says.
Still, Canada’s central bank can “afford to take it slowly,” he adds. Interest rates will likely climb by less than a percentage point in 2022, with a few further hikes expected in 2023, according to Shenfeld.
Higher rates would likely dampen inflation quickly, Porter says.
“It might take 18 months (for a rate hike) to fully work its way through the system, but I suspect that rate increases could be having a real effect within six months.”
The United States Federal Reserve said it is accelerating the tapering of its easy-money policies and now sees at least three interest rate hikes by the end of 2022.
Easy money is falling out of fashion.
The United States Federal Reserve wrapped up its final policy-setting meeting of the year by announcing it will accelerate the withdrawal of some support it has given the economy during the coronavirus pandemic as its priorities pivot from shoring up the jobs market to keeping a lid on blistering inflation.
At the end of its two-day meeting on Wednesday, the Fed said it is keeping its benchmark interest rate near zero – where it has been since the opening days of the pandemic – but will speed up its tapering of bond purchases that have helped keep longer-term borrowing costs low.
Starting in January, the Fed will reduce its bond purchases to $60bn a month – half of where they stood at the start of November, and putting the US central bank on track to fully unwind them by the end of March.
The Fed also released fresh projections at the end of its meeting. A majority of Federal Open Market Committee members see at least three separate quarter-of-a-percentage-point interest rate hikes by the end of next year, and all of them see rates rising off their current zero bound.
“We’re phasing out our [bond] purchases more rapidly because with elevated inflation pressures and a rapidly strengthening labour market, the economy no longer needs increasing amounts of policy support,” Fed Chairman Jerome Powell told reporters during a post-meeting press conference.
While Wednesday’s hastier unwinding and more aggressive forecast for rate hikes had been telegraphed by Powell during his testimony before Congress earlier this month, it nevertheless marks a dramatic shift in the Fed’s priorities as disruptions from the pandemic spawn inflation-feeding shortages of raw materials and workers.
With so many jobs going begging, firms are offering better pay and benefits to lure scarce workers, driving average hourly wages 4.8 percent higher in November compared to the same period a year ago.
The nation’s unemployment rate also fell sharply in November to 4.2 percent as it closes in on its pre-pandemic level of 3.5 percent – a level the Fed now sees the economy reaching next year.
Back in September, policymakers didn’t see the jobs market reaching that benchmark until 2023.
“Compared with the projections made in September, participants have revised their unemployment rate projections noticeably lower for this year and next,” said Powell.
While the US economic recovery is still very much on track, inflationary risks are mounting. And when consumer prices spike sharply – especially for essential purchases that can’t be postponed – it slams low-income households the hardest because it eats up a larger share of their income.
“We understand that high inflation imposes significant hardship, especially on those least able to meet the higher costs of essentials like food, housing and transportation,” said Powell.
The Fed has a tough balancing act ahead. Inflation could spiral out of control if its rate hikes are too timid. But if they’re too aggressive, it could derail the recovery.
The Fed also adjusted its forecast for economic growth this year down to 5.5 percent, compared to its September call for 5.9 percent growth. It also sees its preferred inflation gauge clocking in at 5.3 percent this year – a dramatic increase from its September forecast of 4.2 percent.
The pandemic’s real estate boom has been mostly driven by buyers seeking bigger properties in more affordable cities.Christopher Katsarov/The Globe and Mail
Canadian home prices hit a fresh high in November, with values continuing to accelerate as buyers competed for houses throughout most of Ontario and B.C.
The national home price index, which adjusts for pricing volatility, rose 2.7 per cent to $790,600 from October to November on a seasonally adjusted basis, according to the Canadian Real Estate Association or CREA. That marks the second straight month of gains at that elevated level.
Compared with last November, the home price index (HPI) across the country is 25 per cent higher, a record year-over-year price jump. In Ontario, the HPI is up 30 per cent, with values soaring in the province’s most expensive region of Toronto.
Currently, there are 1.8 months of inventory remaining, or the amount of time it would take to sell all the listed properties if the pace of sales remained the same as November. That ties with March of this year for the lowest level on record. The long-term average has been just over five months.
Even though more homeowners listed their properties for sale in November than in the previous month, the market conditions are similar to March of this year, when prices were spiking and economists were calling on policy makers to break the market psychology and the belief that prices will only rise further.
Since March, the country’s bank regulator and federal finance department have made it slightly harder for borrowers to qualify for a mortgage from a bank. The Bank of Canada has warned borrowers that interest rates will rise at some point, while the federal mortgage insurer, Canada Mortgage and Housing Corp., has said that the market is overvalued and overheated, and at risk of a downturn.
However, homebuyers have been undeterred by the warnings and have managed to deal with the tougher mortgage stress test, which requires borrowers to prove they can make their home-loan payments at an interest rate of 5.25 per cent and not at their mortgage contract’s actual interest rate. Canada’s banking regulator, the Office of the Superintendent of Financial Institutions, is set to announce on Friday whether it will change the mortgage stress test requirements.
“We called for a response early in the year and here we are with prices up another 30 per cent in some markets. The market clearly needs, as it did back then, higher interest rates,” said Bank of Montreal senior economist Robert Kavcic, who had been one of the loudest voices calling on policymakers to act.
The pandemic’s real estate boom has been mostly driven by buyers seeking bigger properties in more affordable cities. That has propelled prices higher in smaller cities that have traditionally been unaccustomed to strong demand. In the Bancroft area in Ontario’s cottage country, for example, the HPI is nearly 50 per cent higher year over year.
Last month was no exception to the trend. Smaller cities and regions such as Chilliwack and Fraser Valley in B.C., as well as Brantford, Cambridge and North Bay in Ontario, continued to see prices increasing at a faster pace than the rest of the country. In Cambridge, the typical price of a house is now $100,000 higher than August, according to the HPI.
Now, the Toronto region is seeing values jump significantly. In the Oakville-Milton area, just west of the city of Toronto, the typical price of a house reached $1,645,100 in November. That is $200,000 higher than in August, according to the HPI. In the Greater Toronto Area, the typical price of a single-family house was $1,403,800 last month, a $145,000 increase over August.
Across the country, there were 54,222 home resales in November, according to CREA. That is slightly higher than in October on a seasonally adjusted basis and similar to last November.
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The average selling price of a resale home in Canada last month was $720,850, beating the all-time high that was set in March of this year.
The Canadian Real Estate Association said Wednesday that the volume of sales was strong, too, with sales increasing by 0.6 per cent from the previous month's level.
Typically, housing market activity peaks in the spring, before declining through the summer and fall, and slowing further in the winter months before rebounding again.
But 2021 has bucked that traditional trend, as sales for the year have already smashed the previous annual record for sales with one month to go.
More than 630,634 homes have been sold on CREA's MLS system this year, well ahead of the record of 552,423 set in 2020.
"Even at what is traditionally the slow time of year for housing, conditions and price trends are at the same record levels we saw this spring," CREA chair Cliff Stevenson said.
CREA, which represents more than 100,000 real estate agents across the country, says that the average selling price figure can be misleading because it is easily skewed by sales in big, expensive cities such as Toronto and Vancouver. So, it calculates a different number, known as the Multiple Listing Service House Price Index or HPI, that adjusts for sales volumes and the type of housing to give a better gauge of the market.
But the HPI is also increasing at a torrid pace. The index has risen by 25.3 per cent in the past year — also the fastest pace on record.
Cashier at a grocery store in Toronto, Ontario, Canada where food prices are up 4.4 per cent year-over-year (Photo by Creative Touch Imaging Ltd./NurPhoto via Getty Images)
Statistics Canada says the Consumer Price Index (CPI) rose 4.7 per cent year-over-year. That was in line with estimates and matched the increase in October, which was the highest since February 2003.
Supply chain disruptions continued to push prices higher for durable goods, such as passenger vehicles and furniture.
According to Statistics Canada, prices were up across all eight sectors, with transportation and shelter prices contributing the most to the increase in the CPI.
Consumers paid more for gasoline (+43.6 per cent), furniture (+8.7 per cent) and food (+4.4 per cent).
BMO chief economist Doug Porter notes that Canadian inflation is now towards the lower end of the G7 and the fact that things didn't get worse is welcome news.
"While this release alone may not advance the case for rate hikes, the bigger picture continues to do so—loudly," said Porter.
Not making enough money to keep up with inflation
The most recent Labour Force Survey found that wages rose 2.8 per cent during the same period. With prices rising faster on average than wages, purchasing power has been eroded.
Canadian Chamber of Commerce chief economist Stephen Tapp says consumers aren't the only ones facing higher costs.
Inflation was up 0.2 per cent in November month-over-month, following a 0.7 per cent increase in October. renewed uncertainty due to the latest rise in COVID cases. In the near term, profitability will be squeezed, and if businesses pass cost increases onto their consumers, it'll prolong pressures on (expected) inflation and wages," said Tapp.
"For small businesses carrying elevated debt from the lockdowns, the higher interest rates that lie ahead will make it harder to service their debt."
Inflation was up 0.2 per cent in November month-over-month, following a 0.7 per cent increase in October.
The inflation data comes the same week the Bank of Canada's mandate was renewed to target inflation at 2 per cent with flexibility as conditions warrant.
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter@jessysbains.
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The provincial vaccine card system is likely to be extended past January, according to B.C.’s provincial health officer.
The B.C. vaccine card program was launched on Sept. 13, with plans to keep the system in place until at least Jan. 31 with the possibility of extension.
In a press conference Tuesday, Dr. Bonnie Henry said the vaccine card is a time limited program, but the government is reassessing the previously discussed expiry date.
Henry also said initially, the provincial government had indicated there would be no exemptions for the vaccine card program, but it has now begun the process to start issuing some exemptions for valid medical reasons.
“I do expect that it’s going to be in place longer than January. So we have started a process to be able to get people a valid B.C. vaccine card for the B.C. vaccine program with a medical exemption, but it is a slow process,” Henry said.
As the Omicron variant continues to spread throughout B.C., Henry said the province is also considering the possibility of requiring vaccination cards for smaller events, not just those with 50 or more people.
The B.C. Vaccine Card program was announced in September, with residents required to show proof of full vaccination in order to access certain settings like indoor restaurants, concerts, events, gyms and movie theatres.
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