Canada’s main stock index opened lower Wednesday with consumer staples and utilities under pressure. On Wall Street, key indexes also started the day on the back foot as traders await this afternoon’s rate decision from the Federal Reserve.
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 52.71 points, or 0.25 per cent, at 20,714.67.
In the U.S., the Dow Jones Industrial Average fell 46.44 points, or 0.14 per cent, at the open to 34,039.60. The S&P 500 opened lower by 6.53 points, or 0.16 per cent, at 4,070.07, while the Nasdaq Composite dropped 11.41 points, or 0.10 per cent, to 11,573.14 at the opening bell.
Wednesday will see the Fed’s latest policy announcement. Markets are widely expecting a quarter point rate increase. Traders will be watching for signals about what’s coming next and whether the central bank is nearing a pause in its tightening campaign. A week ago, the Bank of Canada hiked by 25 basis points and became the first major central bank to signal a break after eight consecutive rate increases.
“While Fed officials have insisted that rates will stay high for some time to come, the markets simply don’t believe them, especially when several key inflation indicators have shown that prices are still coming down on a steady trajectory,” Michael Hewson, chief market analyst with CMC Markets U.K., said in a note.
“This is what makes today’s [Fed chair Jerome] Powell press conference such a tricky proposition when it comes to market positioning,” he said. “The danger for the Fed is in allowing the market to continue to think that rates are likely to come down this year, which in turn could see inflation take off again, especially with the labour market being as tight as it is.”
The rate decision is due at 2 p.m. ET and will be followed by a news conference.
Meanwhile, earnings continue to pour in on both sides of the border.
On Wall Street, Facebook parent Meta reports after the close of trading.
Shares of Snapchat-parent Snap were down more than 12 per cent in morning trading after the social media company swung to a loss in the latest quarter. The company also warned that revenue in the current quarter could fall by as much as 10 per cent amid a weaker economy and rising competition. Snap’s net loss was US$288-million during the quarter, versus net income of US$23-million the previous year. It reported adjusted earnings per share of 14 US cents, beating Wall Street estimates of 11 US cents. The results were released after Tuesday close.
In Canada, Montreal-based CGI reported results before the start of trading. The company said first quarter earnings per share rose to $1.60 in the most recent quarter from $1.49 a year earlier. Excluding specific items, CGI said it earned $1.66 per diluted share, up from $1.50 per diluted share a year earlier. Revenue for the quarter rose to $3.45-billion, up from $3.09-billion last year.
Canadian Pacific Railway Ltd., meanwhile, says it earned $1.27-billion or $1.36 a share in the fourth quarter of 2022, compared with $532-million or 74 cents in the same period of 2021. The company reported revenue of $2.46-billion, up 21 per cent from a year earlier.
Overseas, the pan-European STOXX 600 was up 0.30 per cent by midday. Britain’s FTSE 100 added 0.23 per cent. Germany’s DAX and France’s CAC 40 were up 0.39 per cent and 0.30 per cent, respectively.
In Asia, Japan’s Nikkei ended up 0.07 per cent. Hong Kong’s Hang Seng added 1.05 per cent.
Commodities
Crude prices wavered as traders await the outcome of the Fed’s latest policy meeting and weigh a decision by OPEC+ to maintain output.
The day range on Brent was US$85.25 to US$86.21 in the early premarket. The range on West Texas Intermediate was US$78.83 to US$79.73.
“The oil market is awaiting a couple of major events, both the FOMC decision and the OPEC+ meeting on output,” OANDA senior analyst Ed Moya said.
Members of OPEC+’s Joint Ministerial Monitoring Committee met virtually today. As expected, the group made recommended no change to its current output level. The group will meet again in April.
Reuters reports that OPEC’s oil output fell in January, as Iraqi exports dropped and Nigeria’s output did not recover, with the 10 OPEC members pumping 920,000 barrels per day (bpd) below their targeted volumes under the OPEC+ agreement. The shortfall was bigger than the deficit of 780,000 bpd in December.
Later in the day, markets will get weekly U.S. inventory figures from the U.S. Energy Information Administration. An earlier report from the American Petroleum Institute showed crude stocks rose about 6.3 million barrels last week, more than markets had been expecting.
Meanwhile, gold prices were down as traders await the Fed decision.
Spot gold was 0.2 per cent lower at US$1,924.26 per ounce by early Wednesday morning, after falling to its lowest since Jan. 19 in the previous session. U.S. gold futures fell 0.3 per cent to US$1,939.70.
Currencies
The Canadian dollar was steady, trading around 75 US cents early Wednesday morning, while its U.S. counterpart slid against a group of world counterparts ahead of this afternoon’s Fed policy decision.
The day range on the loonie was 75.03 US cents to 75.26 US cents in the early premarket period.
There were no major Canadian economic releases due Wednesday.
On world markets, the U.S. dollar index, which measures the U.S. currency against six major peers, fell 0.15 per cent to 101.96 by Wednesday morning. It also slipped in the previous session, in part because of a report showing U.S. labour costs had increased in the fourth quarter at their slowest pace in a year, Reuters reported.
The euro was up 0.2 per cent at US$1.0885 as traders await Thursday’s rate decision from the European Central Bank, while Britain’s pound was flat at US$1.2320.
More company news
TC Energy Corp on Wednesday said it now estimates costs for completion of its troubled Coastal GasLink project to be $14.5-billion from $11.2-billion pegged earlier.
Intel Corp said that it had made broad cuts to employee and executive pay, a week after the company issued a lower-than-expected sales forecast driven by a loss of market share to rivals and a PC market downturn. The reductions will range from 5 per cent of base pay for mid-level employees to as much as 25% for Chief Executive Pat Gelsinger, while the company’s hourly workforce’s pay will not be cut, said a person familiar with the matter who was not authorized to speak publicly. –Reuters
Peloton Interactive Inc on Wednesday reported slower cash burn for the second quarter, after the company carried out a host of cost-cutting measures, including layoffs and store shutdowns. The fitness equipment maker posted a cash burn of US$94.4-million, compared with a burn of US$546.7-million a year earlier. –Reuters
Economic news
(8:15 a.m. ET) U.S. ADP National Employment Report for January.
(9:30 a.m. ET) Canadian S&P Global Manufacturing PMI for January.
(10 a.m. ET) U.S. ISM Manufacturing PMI for January.
(10 a.m. ET) U.S. construction spending for January.
(10 a.m. ET) U.S. Job Openings and Labor Turnover Survey for December.
(2 p.m. ET) U.S. Fed announcement with chair Jerome Powell’s press briefing to follow.
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.
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