Canada’s main stock index fell on Tuesday, led by losses in the resource sectors, while investors were disappointed that core inflation rose more than expected in December ahead of next week’s interest rate decision by the Bank of Canada.
At 10:39 a.m. ET, the TSX/S&P composite index was down 82.00 points, or 0.39%, at 20,979.45 after falling as low as 20,842.98 earlier in the trading day.
Energy shares were the top losers on the index, falling 1.7%, while materials were down 1.4% as prices of most base metals dropped on a stronger U.S. dollar and concerns over future demand after top consumer China skipped an expected rate cut.
Data on Tuesday showed Canada’s annual inflation rate rose to 3.4% in Dec. from 3.1% in Nov., driven mainly by higher gasoline prices last month.
While the headline numbers were in line with expectations, the sticky core measures show that overall inflation is likely to come down slowly.
“CPI has come down quite a bit from the peaks. It’s going to get a little bit more difficult to get it back to the 2% range. But my forecast is that the Bank of Canada is still likely to cut interest rates”, Mike Archibald, vice president and portfolio manager at AGF Investments, told Reuters.
“My assumption is that it will happen, likely sometime in the second quarter, but we have to continue to watch the data.”
Money markets now see a 34% chance that the BoC would start cutting interest rates in March, down from nearly 50% before the figures were released, but still see a high chance of a 25-basis-point reduction in April.
Among individual stocks, Barrick Gold slumped 4.6% after the company reported preliminary gold output of 4.05 million ounces in the financial year 2023, below its forecast and analysts’ estimates of 4.16 mln ounces.
First Quantum Minerals fell 3.4% after the Canadian miner said it plans to conserve capital after it was forced to halt production at its Cobre Panama copper mine.
Wall Street’s main indexes fell on Tuesday, as banks came under pressure after mixed earnings from Goldman Sachs and Morgan Stanley kept investors cautious about the health of capital markets and dealmaking, while declines in Tesla and Apple also weighed.
Tesla shed 2.2%, steering a 1% drop in the S&P 500 consumer discretionary sector, after CEO Elon Musk said he would be uncomfortable growing the automaker to be a leader in artificial intelligence and robotics without having at least 25% voting control of the company.
Apple fell 2.4% after offering rare discounts on its iPhones in China on competition pressures, just days after it was overtaken by Microsoft as the world’s most valuable firm.
On the fourth-quarter earnings front, Goldman Sachs reported a 51% rise in profit, as its traders capitalized on a nascent market recovery and its asset and wealth business revenue rose. However, Morgan Stanley’s profit declined, while revenue surpassed expectations on a rebound in dealmaking activity. Their shares were down 0.8% and 3.4%, respectively.
“Morgan Stanley, Goldman Sachs tend to service the wealthier high-net-worth clients, and have much less loan loss reserves,” said Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest.
“Overall, I think the banks (results) came in pretty good shape and the banking sector is pretty well-capitalized at this point.”
Wells Fargo, Bank of America, Citigroup and JPMorgan Chase dropped between 1.6% and 2.7% after reporting lower profits on Friday.
The broader banks index slid to an over one-month low on Tuesday.
Wall Street finished the previous week higher as investors continue to price in an around 70% chance of the Federal Reserve delivering a 25-basis-point rate cut in March – despite mixed inflation data and a lack of supporting voices among policymakers for a quick start to monetary policy easing.
UBS Global Research boosted its 2024 year-end target for the S&P 500 on Tuesday to 5,150, representing a nearly 8% upside from current levels.
Despite briefly surpassing its previous record closing high last week, the benchmark index has faced resistance to breaching its highest intra-day level, hit in January 2022.
Investors will parse Fed Board Governor Christopher Waller’s remarks during the day, after Atlanta Fed President Raphael Bostic warned about cutting rates too soon.
The Dow Jones Industrial Average was down 226.52 points, or 0.60%, at 37,366.46, the S&P 500 was down 26.82 points, or 0.56%, at 4,757.01, and the Nasdaq Composite was down 89.39 points, or 0.60%, at 14,883.37.
Dow-component Boeing declined 4.7%, as the Federal Aviation Administration extended the grounding of its 737 MAX 9 airplanes indefinitely and brokerage Wells Fargo downgraded the stock to “equal weight” from “overweight.”
Applied Digital slumped 22.3% after the data-center services provider posted downbeat second-quarter revenue.
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.
