U.S. and Canadian stocks are rising Tuesday following the latest update on inflation south of the border.
The S&P 500 was 0.8% higher and flirting with its all-time high set last week after flipping between modest gains and losses earlier in the day. The Dow Jones Industrial Average was up 215 points, or 0.6%, as of 10:30 a.m. Eastern time, and the Nasdaq composite was 1% higher after both indexes also erased earlier losses. Canada’s main stock index was up 0.3% in late morning trade.
The highly anticipated inflation report said prices paid by U.S. consumers rose a bit more last month than economists expected. It kept the door closed on hopes that the Federal Reserve could deliver the cuts to interest rates that Wall Street craves at its next meeting next week.
But the inflation figures were still close to expectations, and traders were holding onto hopes that the longer-term trend downward will keep the Fed on track to cut its main interest rate in June. Plus, inflation may not be as hot in reality as the morning’s report suggested.
“January and February are notoriously noisy months for a lot of economic data,” said Brian Jacobsen, chief economist at Annex Wealth Management.
“The Fed wasn’t planning on cutting rates next week, and this report doesn’t change that. The discussion around the table will be more about the longer-term trend.”
The fear is “sticky” inflation that refuses to go down will force the Fed to keep interest rates high, which grinds down on the economy and investment prices.
“Another hotter-than-expected CPI reading may breathe new life into the sticky inflation narrative, but whether it actually delays rate cuts is a different story,” said Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.
For months, traders on Wall Street have been trying to get ahead of the Federal Reserve and guess when cuts to rates will arrive. They have already sent stock prices higher and bond yields lower in anticipation of it.
Through it all, the Fed has remained “nothing if not consistent in doing what it said it would do,” Larkin said. “Until they say otherwise, their plan is to cut rate cuts in the second half of the year.”
The immediate reaction across financial markets to the inflation data was nevertheless halting and uncertain.
In the bond market, Treasury yields initially dropped and then swung higher. The yield on the 10-year Treasury eventually rose to 4.13% from 4.10% late Monday.
The price of gold, which has shot to records on expectations for coming rate cuts, also swung. It was recently down 1.2% at $2,161.50 per ounce. A measure of nervousness among U.S. stock investors was down nearly 6% after squiggling up and down a few times.
“Equity markets don’t seem that fazed by the disappointing result. They recognize that this is not a great result, but it’s not bad enough to completely knock the Fed off track”, said Doug Porter, chief economist at BMO Capital Markets.
“There’s still the prospect for interest rate cuts (from the Federal Reserve) sometime around the middle part of the year”, he added.
On Wall Street, Oracle jumped 11% after reporting stronger profit for the latest quarter than analysts expected.
Nvidia also rose 3.1% following a rare two-day stumble in what’s been a rocket ride amid Wall Street’s frenzy around artificial-intelligence technology. The company’s stock has grown into one of the market’s most influential because of its sudden swelling in size, and it was one of the strongest forces pushing the S&P 500 upward.
New York Community Bancorp rose 1.5% after it said it closed its previously announced deal to raise roughly $1.05 billion in cash from the sale of stock. The bank has been struggling under the weight of falling prices for commercial real estate and the growing pains associated with prior acquisitions it made. Its troubles have also led to worries about trouble for the broader regional banking industry.
3M climbed 4.3% after it said Bill Brown, the former chairman and CEO of L3Harris Technologies, will take over as its CEO at the start of May.
On the losing end of Wall Street was Southwest Airlines. It dropped 14% after cutting its forecast for an important measure of revenue in the first three months of this year, partially because of lower-than-expected flying by some leisure travelers.
It also said Boeing told the company that it will deliver fewer airplanes than expected this year. Shares of Boeing, which is facing criticism over its safety and manufacturing quality, sank 3.9%.
In Toronto, rate-sensitive technology stocks rose 0.7%, leading gains on the index, followed by consumer staples and consumer discretionary stocks which rose 0.6% and 0.3%, respectively.
In stock markets abroad, Japan’s Nikkei 225 slipped 0.1% to retreat further from its recent records. Expectations are building that its central bank will raise interest rates, which are below zero.
Indexes jumped 3.1% in Hong Kong and 1.1% in London but moved more modestly elsewhere across Asia and Europe.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
