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
HALIFAX – Ottawa is negotiating a $500-million bailout for Nova Scotia’s privately owned electric utility, saying the money will be used to prevent a big spike in electricity rates.
Federal Natural Resources Minister Jonathan Wilkinson made the announcement today in Halifax, saying Nova Scotia Power Inc. needs the money to cover higher costs resulting from the delayed delivery of electricity from the Muskrat Falls hydroelectric plant in Labrador.
Wilkinson says that without the money, the subsidiary of Emera Inc. would have had to increase rates by 19 per cent over “the short term.”
Nova Scotia Power CEO Peter Gregg says the deal, once approved by the province’s energy regulator, will keep rate increases limited “to be around the rate of inflation,” as costs are spread over a number of years.
The utility helped pay for construction of an underwater transmission link between Newfoundland and Nova Scotia, but the Muskrat Falls project has not been consistent in delivering electricity over the past five years.
Those delays forced Nova Scotia Power to spend more on generating its own electricity.
This report by The Canadian Press was first published Sept. 16, 2024.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
