Today's Report (12/16/2021)

Wholesale sales rose 1.4% in October to $72.5 billion, the highest level on record. This was the sixth increase in the past eight months, and wholesale sales in October were 11.4% higher than pre-pandemic levels in February 2020. The growth was largely due to a 7.1% increase in the sales of motor vehicles and motor vehicle parts and accessories. Overall, five of seven subsectors posted higher sales in October, representing 61% of sales in the sector.

What Is It?

Reports the change in the value of sales at the wholesale level across Canada.

What Are The Fundamental Effects?

A company who’s stockroom is filled with unsold goods can quickly find itself in a financial squeeze, especially if the economy starts to weaken.

Retailers with bloated inventories and sleepy sales will cut back or cancel their orders to wholesalers. As a result, wholesalers, fearful that their own stockrooms will start to swell with unwanted products, start to postpone orders to factories.

How Does It Affect The Markets?

CURRENCY - Currency traders generally look at the CAD more favorably if both sales and inventories are rising at the wholesale level.

STOCKS - Generally muted reaction.

BONDS - Faster than expected growth in wholesale sales can upset bond traders because it adds to GDP growth and can put upward pressure on interest rates. A fall in wholesale sales subtracts from the economic output, which is positive for bonds.