By Ketki Saxena
Investing.com -- At 10:25 a.m in Toronto, the S&P/TSX Composite Index was at 19,007.45 points, down 0.51% shortly after the opening bell.
Canada's main stock index futures tracked weakness in global and U.S. equities as investors braced for tomorrow’s rate hike by the U.S. Federal Reserve, and as the IMF once again slashed its growth forecast for the year as the global economy cools.
Global economic expansion will likely slow to 3.2% this year, less than the 3.6% forecast by the fund in April and the 4.4% seen in January, the IMF said in today’s update to its World Economic Outlook.
North American Indices were also weighed by a dismal profit warning from Walmart (NYSE:WMT) as the retailed slashed its forecasts, the latest bearish sign on the economy as soaring prices and rising interest rates impact consumer spending.
The Canadian index was also weighed by news that Shopify (TSX:SHOP) plans to lay off over 10% of its workforce as the e-commerce giant slashes costs in an increasingly recessionary, rising rate- environment.
Commodities
Further gains on the Canadian Index were capped by gains in commodities particularly crude which rose for the second straight session as Russia reduced its supply of natural gas to western Europe. The move increases the likelihood of energy tightening supply to the region, and the possibility of gas-reliant EU nations like Germany switching to more readily available crude as an alternative.
Gold meanwhile remained flat in the morning’s trade, as falling yields were offset by a strengthening dollar, leaving bullion an unappetizing alternative.
Corporate
The big story on Bay Street today is Shopify’s plans to lay off 10% of its workforce, or about 1000 employees, as per an internal memo cited by the Wall Street Journal.
Shopify also had price targets slashed by two of Canada’s big six banks:
CIBC lowered the company’s price targets to US$42.50, while RBC (TSX:RY) placed placing its target at US$70.
Other major stories on Bay Street today will include earnings expected from Canadian National Railway (TSX:CNR) and First National Financial.
In Canadian Economics
Statistics Canada released its early estimate today for June wholesale sales. The advance results indicate that wholesale sales rose 0.5%, predominantly reflecting higher sales in the miscellaneous goods subsector.