Headline inflation of 2.2% shaped up largely as expected for October, gaining 0.2% over the September print…

… but moderating on a Y/Y basis, as the drag from gasoline prices increased.

At the category level, it wasn’t just transportation - with most baskets showing slower Y/Y growth versus September…

… including in store-bought food, which grew 3.4% - down from 4% last month but still above CPI for nine straight.

The most interesting chart from the print? Cellular services… up nearly 8% - the first increase in nearly three years.

That could be what the sector needs to get going, after years of intense price competition have weighed on shares (especially without recent strength from Rogers)… let’s see.

We had a net securities inflow of $9B in September, the third straight - with $31B of foreign investment more than offsetting $22B of Canadian investment abroad…

… split pretty evenly between foreign equity and fixed income exposure (weighted heavily to the U.S.).

Canadian equities saw a small ~$3B bid, rebounding after last month’s outflow thanks to foreign interest in energy, mining, and manufacturing…

… and the appetite for Canadian paper remains healthy, with $29B of net additions across both public and private issuers.

Housing starts missed big in October, falling to 233K versus estimates of 265K - a seven month low point.

The Y/Y decline in the month was driven by the usual suspects, with Ontario and BC dragging down better results in Quebec and the Prairies.

Unit absorption continued to trend downwards, with falling construction unable to offset weak end market demand…

… driving an inventory build and sustained elevation in time on the market for new units.

Telus (T) has been under the gun lately, falling 5% yesterday on dividend sustainability concerns raised by Veritas - concerns the market shares...

… with current trading representing a near-9% yield. The picture reads a lot like BCE’s pre-cut position, with management aiming to reduce leverage after bringing Telus International back into the fold…

… but having little free cash to do it, given the capital outlay required to support the dividend (DRIP alleviates some pressure).

With front row seats to Northland’s 30% fall after announcing a cut last week, ripping the bandaid off isn’t an easy call…

… especially if non-core sales or a Telus Health spinout can plug the hole. Either way, tough to imagine the stock won’t lag peers until resolved.

MTY Food (MTY) fell 7%, giving some of Monday’s ~15% gain back after the company confirmed it initiated a strategic review that could end in a sale. The decision follows years of underperformance…

… driven by the company’s recent push into corporate stores through M&A, which has weighed on margins given the economics are worse than the franchising business.

More recently, concerns over the health of the U.S. consumer (roughly two thirds of revenue) have added additional pressure - with sales down in the prior two quarters...

… pushing shares towards a trough EBITDA multiple that likely has private equity circling, given recent interest in platforms like Papa John’s, Dave’s Hot Chicken, and Denny’s. Taking the ~9x NTM EBITDA multiple Denny’s was clipped at…

… and handicapping it ~10% for MTY’s relative complexity, I wouldn’t be surprised to see the equity valued at ~$1B+ in a deal.

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