Wall Street futures were flat early Monday with traders awaiting January inflation data in the days ahead. Major European markets were mostly positive. TSX futures were modestly lower.
In the early premarket period, Dow, S&P and Nasdaq futures all traded not far from break even. On Friday, the S&P 500 and Nasdaq both saw gains while the Dow finished in the red. Canada’s S&P/TSX Composite Index ended Friday’s session up 0.43 per cent.
Key this week will be Tuesday morning’s U.S. inflation data for January.
“The United States isn’t entirely home-free regarding inflation concerns, despite the market’s inclination to suggest otherwise,” Stephen Innes, managing partner with SPI Asset Management, said.
“The critical question in the macro-policy realm remains unanswered: Is U.S. inflation moving towards a sustainable trajectory aligned with the Fed’s definition of price stability?” he said.
He said the annual rate of core inflation, which excludes food and energy costs to give a clearer picture of underlying price pressures, is expected to come in at 3.7 per cent. That would be the smallest year-over-year advance since April 2021. Overall inflation, he said, is expected to rise by less than 3 per cent year-over-year for the first time in nearly two years.
“The bottom line is that the Fed still requires more time and data on prices, wages, and demand to ascertain whether inflation will sustainably return to the target before declaring the mission accomplished,” he said.
“However, as of now, they can take comfort in the fact that supply chains remain supportive and cooperative.”
In Canada, earnings continue to roll in through the week. Restaurant Brands International, which operates the Tim Hortons chain, and Shopify report on Tuesday morning. TC Energy and Air Canada release quarterly results on Friday.
Overseas, the pan-European STOXX 600 was up 0.40 per cent in morning trading. Britain’s FTSE 100 slid 0.07 per cent. Germany’s DAX and France’s CAC 40 rose 0.43 per cent and 0.46 per cent, respectively.
Commodities
Crude prices were weaker in early trading with geopolitical risks continuing to drive sentiment.
The day range on Brent was US$81.26 to US$81.99 in the early premarket period. The range on West Texas Intermediate was US$76.02 to US$76.66. Both benchmarks gained about 6 per cent last week.
“This week, OPEC and IEA will release their monthly report on Tuesday and Thursday, respectively,” Swissquote senior analyst Ipek Ozkardeskaya said in a note.
“Attention will be paid to how they will revise their demand outlook in reaction to the global developments.”
Reuters reported that the Israeli military said on Monday it had conducted a “series of strikes” on southern Gaza that have now “concluded,” days after Israeli Prime Minister Benjamin Netanyahu rejected a ceasefire proposal from Hamas.
In other commodities, spot gold held its ground at US$2,023.03 per ounce by earl Monday morning. U.S. gold futures were also steady at US$2,037.10 per ounce.
Currencies
The Canadian dollar was modestly lower while its U.S. counterpart saw slight gains as traders await tomorrow’s U.S. inflation data.
The day range on the loonie was 74.14 US cents to 74.35 US cents in the early premarket period.
The U.S. dollar index was up 0.06 per cent at 104.17.
The euro slid 0.10 per cent to US$1.0773. Britain’s pound was down 0.03 per cent at US$1.2625.
The yield on the U.S. 10-year note was lower at 4.175 per cent ahead of the North American opening bell.
More company news
Diamondback Energy on Monday decided to buy the largest privately held oil and gas producer in the Permian basin, Endeavor Energy Partners, in a cash-and-stock deal for about US$26-billion, including debt. The deal comes after a new wave of consolidation in the prolific Permian basin to boost production, the biggest in 2023 being Exxon Mobil’s US$60-billion deal for Pioneer Natural Resources. The combined company would be the third largest oil and gas producer in the region behind Exxon and Chevron, with the latter also having announced recent deals. –Reuters
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
