Canada’s main stock index fell on Wednesday morning as energy shares lost their footing on weaker oil prices and the Bank of Canada signaled a rate hike might now come earlier next year than previously expected.
At 10:42 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 163.73 points, or 0.76%, at 21,009.72 after opening at 21,163.29.
The Bank of Canada held its key overnight interest rate at 0.25% as expected on Wednesday and said it was ending its quantitative easing program.
The central bank, which slashed interest rates to a record low 0.25% in March of last year in the first wave of the pandemic, said it was ending the QE program “in light of the progress made in the economic recovery”.
It will continue to buy only enough Government of Canada bonds to replace those that are maturing. It had previously said it would end QE before hiking rates.
The Bank of Canada, which is committed to holding rates at record lows until slack is absorbed, said it now expects that to happen “sometime in the middle quarters of 2022.” The previous estimate was for the second half of 2022.
In Toronto, the energy sector fell 1.5%, extending losses for the second session, as oil prices fell after industry data showed U.S. crude stockpiles rose more than expected.
Adding to losses was the materials sector, which includes precious and base metals miners and fertilizer companies, falling 0.8%.
The tech sector was down 1.6%, while consumer discretionary and staples slid 1.1% each.
After snapping a seven-month winning streak in September, the Canadian equity index has gained 6% so far this month, on course for its best monthly performance since November 2020.
The Nasdaq led gains among Wall Street indexes on Wednesday after a robust forecast from Microsoft supported optimism about the third-quarter earnings season, while a decline in oil prices hurt shares of energy companies.
The S&P 500 index and the Dow Jones Industrial Average struggled for direction in the first hour of trading, with seven of the 11 major S&P 500 sectoral indexes falling.
Microsoft Corp jumped 3.6% after it forecast a strong end to the calendar year, helped by its booming cloud business. Google-owner Alphabet Inc gained 3.3% after reporting a record quarterly profit on a surge in ad sales.
Their shares, coupled with other mega-cap growth names Amazon.com, and Tesla Inc, provided the biggest boost to the Nasdaq index.
“Today feels exactly like the calm before the storm ahead of a pile of earnings that is due tomorrow and everyone wants to know how the supply-chain issues are going to work out,” said Dennis Dick, a trader at Bright Trading LLC.
Worries over rising prices, potentially higher corporate taxes and the Federal Reserve’s tapering plans had rattled markets last month, but upbeat earnings reports have reinforced sentiment in October, helping drive the S&P 500 and the Dow to all-time highs this week.
As of Tuesday, profits for S&P 500 companies are expected to grow 35.6% year-on-year in the third quarter. Out of the 144 Of companies that have reported earnings, 81.9% reported above analyst expectations, according to Refinitiv IBES data.
Energy and materials led S&P 500 sectoral declines, tracking lower commodity prices.
Major lenders such as Bank of America Corp and JPMorgan slipped on a flattening U.S. yield curve .
The Dow Jones Industrial Average was down 33.66 points, or 0.09%, at 35,723.22, the S&P 500 was up 1.19 points, or 0.03%, at 4,575.98, and the Nasdaq Composite was up 59.99 points, or 0.39%, at 15,295.70.
Shares of McDonald’s Corp rose 1.9% after the fast-food company reported upbeat quarterly same store sales, while Coca-Cola Co added 2.1% after the beverage maker raised its full-year profit forecast.
Visa Inc slipped 4.4% as its ‘conservative’ 2022 forecast clouded better-than expected fourth quarter earnings.
Top Senate Democrat Ron Wyden proposed a so-called billionaires tax that would require U.S. billionaires to pay tax on unrealized gains from their assets.
“Taxing unrealized gains is a spooky thing. We have a government that is not scared to tax and that effectively affects investor sentiment,” said Dick.
Texas Instruments Inc fell 6.0% after it forecast tepid quarterly revenue as the chipmaker struggles with supply chain constraints in the semiconductor industry.
Robinhood Markets Inc tumbled 9.7% after the retail broker reported downbeat third-quarter revenue as trading levels declined for cryptocurrencies including dogecoin.
Reuters
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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.
