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Trump calls Fed ‘only problem’ in U.S. economy; markets slump

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WASHINGTON (Reuters) – President Donald Trump blasted the Federal Reserve on Monday, describing it as the “only problem” for the U.S. economy, as top officials convened to discuss the growing rout in stock markets caused in part by the president’s attacks on the central bank.

Stocks fell again on Monday amid concern about slowing economic growth, the government shutdown and reports that Trump had discussed firing Federal Reserve Chairman Jerome Powell, whom he has repeatedly criticized for raising interest rates.

U.S. stocks have dropped sharply in recent weeks on concerns over weaker economic growth. The S&P 500 index .SPX was on pace for its biggest percentage decline in December since the Great Depression.

In a tweet that did nothing to ease market concerns about the Fed’s cherished independence, the Republican president laid the blame for economic headwinds firmly at the feet of the central bank.

“The only problem our economy has is the Fed. They don’t have a feel for the market,” Trump said on Twitter. “The Fed is like a powerful golfer who can’t score because he has no touch – he can’t putt!”

In addition to frequently criticizing the Fed’s rate hikes this year, Trump has gone after Powell several times, telling Reuters in August he was “not thrilled” with his own appointee. The Fed hiked interest rates again last week, as had been widely expected.

A crisis call on Monday between U.S. financial regulators and the Treasury Department did more to rattle markets than to assure them.

All three major indexes ended down more than 2 percent on the day before the Christmas holiday. The S&P 500 ended down about 19.8 percent from its Sept. 20 closing high, just shy of the 20 percent threshold that commonly defines a bear market.

Oil prices followed equities down, tumbling more than 6 percent to the lowest level in over a year.

Treasury Secretary Steven Mnuchin hosted a call with the president’s Working Group on Financial Markets, a body known colloquially as the “Plunge Protection team,” which normally only convenes during times of heavy market volatility.

Regulators on the call said they were not seeing anything out of the ordinary in financial markets during the recent sell-off and also discussed how they will continue critical operations during the partial government shutdown, according to two sources familiar with the matter.

On Sunday, Mnuchin made calls to top U.S. bankers and got reassurances that banks were still able to make loans, the Treasury said.

MARKETS LOWER AGAIN

If Mnuchin’s efforts were meant to soothe markets, that was not evident on Monday.

U.S. President Donald Trump, seated with adviser Jared Kushner (L) and Treasury Secretary Steve Mnuchin (C), speaks during his meeting with the Emir of Kuwait Sheikh Sabah al-Ahmad al-Jaber al-Sabah at the White House in Washington, U.S., September 5, 2018. REUTERS/Kevin Lamarque/File Photo

“When the Dow is down 600 points it’s hard to say it was a positive,” said J.J. Kinahan, chief market strategist at TD Ameritrade in Chicago. “Although his intention was a very good one, the net feeling I think was, ‘Is there a bigger problem that we don’t know about?’”

Representative Maxine Waters, the top Democrat on the House of Representatives Financial Services Committee, said in a statement that Trump and Mnuchin’s actions “have been erratic and are creating uncertainty and instability in the markets.”

Wall Street is closely following reports that Trump had privately discussed the possibility of firing Powell, who became the Fed chief early last February after being appointed by Trump and has continued the path of gradual rate hikes started by his predecessor, Janet Yellen.

Mnuchin said on Saturday that Trump told him he had “never suggested firing” Powell.

Still, just the public suggestion that Trump might try to interfere so deeply with the Fed was unsettling to financial markets that have long operated on the presumption of the U.S. central bank’s independence from political meddling.

Adding to the disquiet is the lack of clarity over whether Trump could in fact dismiss Powell.

Sarah Binder, a professor of political science at George Washington University, said it was “ambiguous legally” whether Trump could remove Powell from the chairman role.

The Federal Reserve Act is clear that Powell can only be removed from the Fed’s board of governors “for cause,” which is generally understood to mean malfeasance, rather than disagreements over interest rates, Binder said.

U.S. Treasury Secretary Steven Mnuchin speaks to the news media after giving a television interview at the White House in Washington, U.S. December 3, 2018. REUTERS/Leah Millis/File Photo

But it may be lawful for Trump to remove Powell from the chairman role, Binder said. When Congress last amended the statute in 1977, it did not address whether removal from the chairman role must be “for cause,” she said.

Troubles in Washington have escalated in recent days with a partial government shutdown that began on Saturday following an impasse in Congress over funds for a wall on the border with Mexico. Defense Secretary Jim Mattis’ resignation on Thursday after Trump’s surprise decision to pull U.S. troops out of Syria also unsettled investors.

But Mnuchin’s response to the market concerns was seen as an overreaction in Wall Street circles.

“It seems unexpected, abrupt and unnecessary,” said Michael Purves, chief global strategist at Weeden & Co in Greenwich, Connecticut.

Reporting by Jason Lange; Additional reporting by Dan Burns, Richard Leong, Karen Brettell and Saqib Ahmed in New York and Pete Schroeder in Washington; Editing by Jonathan Oatis and Leslie Adler

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Canadian Tire and NuPort Robotics to commercialize Canada’s first automated heavy duty trucks

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Canadian Tire Corporation and Toronto based start-up NuPort Robotics, Canada’s first autonomous trucking company, are partnering with the Ontario government to invest $3 million to undertake an automated heavy duty trucking project to test a “first-of-its-kind-in-the-world” technology. 

The breakthrough technology provides a transportation solution for the middle mile, the short-haul shuttle runs that semi-tractor trailers make between distribution centres, warehouses and terminals each day.

It is designed to enable next-generation automated trucks that are more fuel efficient, safer to operate, and provide an enhanced driver experience.

Backed by $1 million in support from the Ontario government through Ontario’s Autonomous Vehicle Innovation Network and matched by $1 million investments from Canadian Tire and NuPort Robotics, respectively, the two-year project is applying proprietary, artificial intelligence technology from NuPort Robotics to retrofit two conventional semi-tractor trailers – which will always be attended by a driver – with high-tech sensors and controls, a touchscreen navigation system, and other advanced features such as obstacle and collision avoidance.

Caroline Mulroney, Minister of Transportation, says: “Ontario is proud to be a global leader in automated and connected vehicle technology and this innovative project is an exciting milestone toward automated vehicle tech in the trucking industry.

“Ontarians rely on goods being delivered by trucks across the province every day and projects like this are demonstrating the ways that automated truck technology could help businesses meet delivery demands more efficiently while supporting a strong supply chain in Ontario.”

Vic Fedeli, Ontario Minister of Economic Development, Job Creation and Trade, says: “This project applies unique and made-in-Ontario Artificial Intelligence technology that offers increased safety and efficiency, with a reduced carbon footprint, to the goods supply chains on which we all rely.

“This is the latest example of how Ontario’s Autonomous Vehicle Innovation Network acts as a catalyst, fostering partnerships between ambitious technology start-ups and industry to develop and commercialize next generation transportation technologies that strengthen our economy and benefit society.”

Raghavender Sahdev, CEO of NuPort Robotics, says: “The trucks are currently transporting goods between a Canadian Tire distribution centre in the Greater Toronto Area and nearby rail terminals within a 12.5 mile radius, and early results are promising.

“The aim of the project is to develop a system that incorporates an autopilot feature for conventional trucks with a driver, leading to the most efficient way to drive and increase safety.

“The sensors work as a ‘safety cocoon’ to cover blind spots and prevent accidents and the end result is peak fuel efficiency, meaning lower carbon emissions, and peak driving performance for an overall more optimal transportation experience.”

NuPort Robotic’s approach to autonomous trucking is unique in the industry because it focuses only on solving the middle mile challenge, using a known set of predetermined trucking routes that are repetitive and high frequency as opposed to general highway driving.

Ultimately, when implemented on fixed routes in the future, Canadian Tire will benefit from faster commercial deployments and improvements in supply chain sustainability.

Gary Fast, vice-president of transportation, Canadian Tire, says: “Canadian Tire embraces innovation and is always testing new technologies to improve our operational efficiency and safety.

“As proud Canadian companies, the safety of all stakeholders, including drivers, employees, customers, and public will be the top priority as we work together towards deployment of this technology.”

Cari Covent, vice president of intelligent automation, Canadian Tire, says: “Over the last three years, Canadian Tire has made a significant effort to solve complex business problems by using the Canadian start-up Artificial Intelligence ecosystem, and NuPort Robotics exemplifies what we look for in a start-up with a focus on innovation, automation and artificial intelligence.”

Sahdev says: “As NuPort Robotics continues to develop new technologies to overcome middle mile supply chain problems and advance autonomous trucking, I am extremely grateful for the support of the Ontario Government through AVIN and the Ontario Centre of Innovation.

“With their continued support, we are striving to position Canada as the leader in autonomous transportation.”

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Constellation Software is money in the bank, this fund manager says

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If you’re looking for a long-term hold in Canadian tech then Constellation Software (Constellation Software Stock Quote, Chart, News, Analysts, Financials TSX:CSU) should definitely be on your radar. So says Jason Del Vicario of Hillside Wealth Management who likes not only Constellation but its recent spin-off Topicus (Topicus Stock Quote, Chart, News, Analysts, Financials TSXV:TOI) which Del Vicario says could do even better than CSU over the next ten years.

Software consolidator Constellation has been running on the same game plan for years, buying small vertical market software companies providing so-called mission critical software solutions globally. Over the years CSU has completed over 500 such acquisitions, buying the top names in their respective niche verticals and then using its clout and breadth to grow the business and expand into new markets. The resulting cash flow is then plowed back into more acquisitions and the cycle repeats.

The strategy has worked wonders for Constellation, which has grown its revenue from $631 million in 2010 to almost $4 billion for 2020 while taking earnings from $4.12 per share in 2010 to $20.59 per share this past year.

Shareholders were given a special treat last month when Constellation spun out recently acquired Topicus, giving CSU owners about 1.9 Topicus shares for every Constellation share as a dividend-in-kind. Constellation bought Netherlands-based software company Total Specific Solutions BV (or TSS) in 2013 and that subsidiary recently acquired Topicus BV, a Dutch information service company focusing on sectors such as healthcare, education and finance.

Topicus was singled out by Constellation founder Mark Leonard for its ability to grow without using outside shareholder funding. Leonard said the spin-out was part of the intention since a purchase agreement was struck last year.

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Nuvei wins price target raise from National Bank

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Strong quarterly results and an even brighter outlook for 2021 are reasons to celebrate for Canadian payments company Nuvei (Nuvei Stock Quote, Chart, News, Analysts, Financials TSX:NVEI), according to National Bank Financial analyst Richard Tse. In an update to clients on Wednesday, Tse left his rating unchanged at “Outperform” while raising his price target from C$85.00 to C$100.00.

Montreal-headquartered Nuvei is a provider of payment technology solutions to merchants and partners around the world, with a platform geared for high-growth mobile commerce and e-commerce markets. Nuvei’s solutions include a fully integrated payments engine with global processing capabilities, a turnkey checkout solution and a suite of data-driven business intelligence and risk management tools and services.

The company released its fourth quarter and full year 2020 financials on Wednesday, showing Q4 revenue of $115.9 million, up 46 per cent year-over-year, and adjusted EBITDA of $51.3 million, up 61 per cent year-over-year. Total dollar value of transactions processed by merchants (‘total volume’) with Nuvei rose by 53 per cent to $13.9 billion. (All figures in US dollars except where noted otherwise.)

The 2020 year featured revenue up 53 per cent to $375.0 million and adjusted EBITDA up 87 per cent to $163.0 million, with total volume rising a full 76 per cent year-over-year to $43.2 billion.

“Our performance continues to be driven by strong momentum in the high-growth verticals we serve, as well as by our customizable, scalable and feature-rich technology platform which provides one of the industry’s most complete payment technology solutions going well beyond merchant acquiring,” said Philip Fayer, chairman and CEO, in a press release.

The company said the fourth quarter represented the strongest growth yet experienced by Nuvei, driven by wallet share expansion from current merchants along with accelerated uptake of new merchants. New e-commerce business almost tripled compared to a year earlier, Nuvei said, while the company expanded its connectivity coverage over the quarter, introduced new product innovations on its platform and continued to execute on M&A.

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