Canada’s main stock index opened down Thursday with commodities-linked stocks under pressure. On Wall Street, key indexes were mixed in early trading amid optimism over a possible deal to raise the U.S. debt ceiling.
At 9:34 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 65.96 points, or 0.32 per cent, at 20,230.47.
The Dow Jones Industrial Average fell 46.21 points, or 0.14 per cent, at the open to 33,374.56.
The S&P 500 opened lower by 1.09 points, or 0.03 per cent, at 4,157.68, while the Nasdaq Composite gained 13.30 points, or 0.11 per cent, to 12,513.87 at the opening bell.
Sentiment got a lift after both U.S. President Joe Biden and House Speaker Kevin McCarthy expressed confidence that a historic default could be avoided.
“History, of course, tells us that a deal is more likely than not to be reached on the 11th hour, suggesting there is still room for a few bad headlines,” Rodrigo Catril, senior FX strategist at National Australia Bank, said in a note. “Treasury has almost run through all of its authorized extraordinary measures to keep paying the bills.”
In Canada, the Bank of Canada releases its latest financial system review at 10 a.m. The review summarizes the bank’s view on the main vulnerabilities and risks to the stability of the financial system. The report will be followed by a news conference with BoC Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers.
On the corporate side, earnings from big U.S. retailers continue with results from Walmart.
Walmart Inc raised its annual sales and profit targets. The retailer now expects full-year earnings per share in the range of US$6.10 to US$6.20 compared to the prior outlook of US$5.90 to US$6.05. Analysts on average were estimating a profit of US$6.16 per share, according to Refinitiv data. Walmart also forecast net sales to rise about 3.5 per cent, higher than its prior outlook. The outlook stands in contrast to that from rival Target a day earlier, which forecast a weaker second quarter as consumers cut back. Walmart shares were up about 2 per cent shortly after the opening bell in New York.
In Canada, luxury coat maker Canada Goose forecast annual sales above Wall Street estimates. Canada Goose said it expects fiscal 2024 revenue between $1.40-billion and $1.50-billion, compared with analysts average estimate of $1.33-billion, according to Refinitiv data.
Overseas, the pan-European STOXX 600 rose 0.59 per cent at midday. Britain’s FTSE 100 gained 0.51 per cent. Germany’s DAX and France’s CAC 40 advanced 1.52 per cent and 0.85 per cent, respectively.
In Asia, Japan’s Nikkei jumped 1.6 per cent. Hong Kong’s Hang Seng gained 0.85 per cent.
Commodities
Crude prices pulled back after surging the previous session with the supply-and-demand picture offsetting optimism in the broader markets.
The day range on Brent was US$76.48 to US$76.93 in the predawn period. The range on West Texas Intermediate was US$72.44 to US$72.88. Both benchmarks gained roughly US$2 a barrel on Tuesday.
“The fact that Investors continue to cheer that the two most extensive markets overhangs are easing ( Debt Limit and Bank Deposit runs) and oil is not bouncing higher in tandem with broader risk sentiment today continues to suggest supply, not demand, is hurting the bullish thesis with the ubiquitous dark fleets moving Russian and Iraqi oil to destinations around the world and keep inventories topped,” Stephen Innes, managing partner with SPI Asset Management, said.
Sentiment was underpinned by weekly gasoline inventory figures released Wednesday by the U.S. Energy Information Administration. The EIA said gasoline stocks fell by 1.4 million barrels last week, more than the 1.1 million drop expected by analysts, suggesting solid demand.
In other commodities, gold prices slid as the U.S. dollar steadied and broader market optimism reduced the metal’s safe-have appeal.
Spot gold fell 0.2 per cent to US$1,977.79 per ounce early Thursday morning. U.S. gold futures edged 0.1-per-cent lower to US$1,982.10.
Currencies
The Canadian dollar was down in early trading while its U.S. counterpart held near its best level in seven weeks on hopes an agreement is in the cards on raising the U.S. debt ceiling.
The day range on the loonie was 74.17 US cents to 74.35 US cents in the early premarket period.
Canadian investors get the Bank of Canada’s financial system review shortly after the start of trading today.
On world markets, the dollar index rose 0.2 per cent to 103.08, near Wednesday’s seven-week high of 103.12.
The euro languished near the previous session’s over six-week low of US$1.08105 and last bought US$1.0817, while Britain’s pound fell 0.3 per cent to US$1.2450, according to figures from Reuters.
The Australian dollar slid after new figures showed an unexpected decline in April employment. The Australian dollar slipped about 0.4 per cent after the release and was last 0.35 per cent lower at US$0.6637, Reuters reported.
In bonds, the yield on the U.S. 10-year note was little changed at 3.591 early Thursday morning.
More company news
Cisco Systems Inc said on Wednesday a large backlog of products due to supply chain constraints has hit demand for new orders from customers. Cisco’s product orders fell 23% in the third quarter, even as the maker of routers, security services and software products reported a quarterly profit that beat estimates, helped by its aggressive steps to resolve supply chain bottlenecks. But the backlog, combined with “macroeconomic conditions,” hit demand for new products, company executives said on a post-earnings conference call. –Reuters
Lightspeed Commerce Inc. reported a loss of US$74.5-million in its fourth quarter compared with a loss of $114.5-million in the same quarter a year earlier as its revenue rose 26 per cent. The e-commerce company, which keeps its books in U.S. dollars, says the loss amounted to 49 cents per diluted share for the quarter ended March 31 compared with a loss of 77 cents per diluted share a year earlier. Revenue in the final quarter of the company’s 2023 financial year totalled US$184.2 million, up from US$146.6 million last year. –The Canadian Press
Economic news
(8:30 a.m. ET) U.S. initial jobless claims for week of May 13.
(8:30 a.m. ET) U.S. Philadelphia Fed Index for May.
(10 a.m. ET) U.S. existing home sales for April.
(10 a.m. ET) U.S. leading indicator for April.
(11 a.m. ET) Bank of Canada Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers hold a press conference on the Financial Systems Review.
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.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
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