Wall Street futures saw early losses accelerate Tuesday morning after new figures showed U.S. inflation cooled in January, but by less than markets had been expecting. Major European markets were in the red. TSX futures were modestly lower.
In the early premarket period, Dow, S&P and Nasdaq futures were all underwater. On Monday, the Dow rose 0.33 per cent to hit a record high, although the S&P and Nasdaq both saw losses on the day. Canada’s S&P/TSX Composite Index finished yesterday up 0.27 per cent.
Ahead of the start of trading, markets got a higher-than-forecast reading on price pressures in the U.S. economy. New figures showed the annual rate of U.S. inflation eased to 3.1 per cent in January, from 3.4 per cent a month earlier. However, the latest number was above the 2.9 per cent analysts had been expecting. On a monthly basis, the consumer price index rose 0.3 per cent, also ahead of the 0.2-per-cent increase markets had been forecasting.
Core inflation, excluding food and energy costs, rose 0.4 per cent on a monthly basis in January. Analysts had been looking for a 0.3-per-cent increase. The annual rate of core inflation came in at 3.7-per-cent, also above forecasts.
“There won’t be high fives at the FOMC’s data briefing on today’s release,” CIBC economist Ali Jaffrey said. “We expect the Fed will be more comfortable easing in the second half of this year.”
In Canada, markets get more earnings, with results from Shopify and Tim Hortons parent Restaurant Brands International before the start of trading. Results are also due from Hydro One and Intact Financial. On Wall Street, Coca-Cola and Hasbro report.
Restaurant Brands International beat analysts’ revenue forecasts in the most recent quarter. The company, which also operates Burger King, posted total revenue rose to US$1.82-billion in the fourth quarter from US$1.69-billion a year earlier, compared with analysts’ average estimate of US$1.81 billion, according to LSEG IBES data.
Shopify, meanwhile, reported total revenue of US$2.14-billion for the three months to December, compared with analysts’ average estimate of US$2.08-billion, according to LSEG data.
Elsewhere, The Globe’s Alexandra Posadzki reports this morning that Rogers Communications Inc. president of residential operations Zoran Stakic has left the company, triggering a series of changes in the telecom giant’s leadership ranks. Mr. Stakic, a former Shaw Communications Inc. executive, joined Rogers Communications Inc. during its takeover of its Calgary-based rival.
Overseas, the pan-European STOXX 600 was down 0.26 per cent in morning trading. Britain’s FTSE 100 slid 0.07 per cent. Germany’s DAX lost 0.64 per cent while France’s CAC 40 fell 0.35 per cent.
In Asia, Japan’s Nikkei jumped 2.89 per cent, briefly touching the 38,000 level during intraday trading. Markets in Hong Kong were closed.
Commodities
Crude prices were higher early Tuesday with markets awaiting U.S. inventory data later in the day as heightened tensions in the Middle East continue to drive sentiment.
The day range on Brent was US$81.96 to US$82.73 in the early premarket period. The day range on West Texas Intermediate was US$76.87 to US$77.68.
“Note that rising oil prices are a double-edged sword,” Swissquote analyst Ipek Ozkardeskaya said in a note.
“Good growth is positive for oil prices, but higher oil prices are not good for easing inflation. Hence, any U-turn in inflation would get the major central banks to further tighten their purses’ strings, hit growth prospects and hammer a potential oil rally.”
Reuters reports that the conflict in the Middle East has kept prices elevated, as the U.S. and Jordan maintained pressure for a Gaza Strip ceasefire. Senior mediators were to resume work on Tuesday on an Israel-Hamas truce agreement.
Meanwhile, the American Petroleum Institute is scheduled to release its weekly inventory report later in the session. More official government numbers will follow on Wednesday morning. Analysts are expecting to see a rise in U.S. crude stocks of about 2.6 million barrels last week.
Markets also got OPEC’s monthly market report Tuesday. The International Energy Agency’s report for the month is due on Thursday. OPEC said it expects world oil demand will rise by 2.25 million barrels a day in 2024 and by 1.85 million barrels a day in 2025. Both forecasts were unchanged from last month.
In other commodities, spot gold was up 0.2 per cent to US$2,023.89 per ounce by early Tuesday morning, after briefly slipping to a more than two-week low of US$2,011.72 on Monday. U.S. gold futures also ticked up 0.2 per cent to US$2,037.50.
Currencies
The Canadian dollar was little changed while its U.S. counterpart was mostly steady against a basked of world currencies.
The day range on the loonie was 74.26 US cents to 74.37 US cents in the early premarket period.
The U.S. dollar index, which weighs the greenback against a group of currencies, was little changed at 104.16 ahead of the release of the latest U.S. inflation data.
The euro was up 0.02 per cent at US$1.0775. Britain’s pound rose 0.33 per cent to US$1.2669.
In bonds, the yield on the U.S. 10-year note was slightly higher at 4.181 per cent in the predawn period.
More company news
Hasbroreported a steeper-than-expected drop in holiday-quarter sales and profit on Tuesday, as a persistent demand weakness in the toy industry weighed on sales of the company’s digital and board games. Sluggish demand from a pullback in leisure spending and cautious inventory planning by retailers like Walmart and Target hurt Hasbro’s sales in the past year. For the full year 2024, the company expects revenue in its core Wizards of the Coast segment to be down 3% to 5%, owing to weakness in digital gaming. –Reuters
Coca-Cola beat Wall Street expectations for fourth-quarter revenue on Tuesday, as the beverage maker benefited from higher product prices and buoyant demand for its namesake drink and juices. The company’s net revenue rose to US$10.95-billion in the quarter compared with US$10.20-billion a year earlier, while analysts estimated US$10.68-billion, according to LSEG data. –Reuters
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
