By Ketki Saxena
Investing.com – At 10:10 a.m in Toronto, the S&P/TSX composite index was at 19,754.00 points, up 0.55% in the day’s trading as equities rebounded from yesterday’s brutal sell-off that followed a hotter than expected US CPI reading and raised the case for fully-loaded Fed hikes this year.
Equities today were also somewhat supported by today’s mixed US producer price index, which rose slightly less than expected (8.7% year over year), while core readings, as in the CPI, failed to moderate.
The commodity-heavy Canadian Index was also supported by dip buying in crude after yesterday’s sell-off, despite largely bearish indicators including continuing lockdowns in China, the EIA’s downgrade to crude outlook for the remainder of the year, rising U.S. crude stocks, and the EU’s decision to rescind its proposed price caps on Russian energy.
However, some bullish elements from Wednesday's IEA helped support crude, including expectations of a large-scale switch from gas to oil, estimated to average 700,000 barrels per day (BPD) from October 2022 to March 2023, double the level cited a year ago.
The Biggest Stories on Bay Street
BRP reported Q2 results this morning before the opening bell, posting a 28% increase in revenue to a new record BRP hiked its guidance after reporting a 28-per-cent increase in revenue in the latest quarter. BRP reported revenue of $2.44-billion, up from $1.90-billion in the same quarter last year. Earnings per share were at $2.94 compared to $2.46 this time last year. The company also raised its full-year profit forecast this morning, with its CEO citing supply-chain improvements and enhanced production capacity.
Westshore Terminals (TSX:WTE), Canada’s biggest coal export terminal, warned last night that it received 72-hour strike notice from the union representing workers at its Roberts Bank, B.C. location. The members of Local 502 will commence the strike against Westshore around noon on Friday, September 16, 2022. The strike is expected to result in the complete suspension of operations at the terminal.
With a large-scale rail strike impending in the US, Canadian Pacific railways is also facing pressure from the local union, Local 101R, which represents 1,200 workers including workers who service locomotives and freight cars, and produce track and freight car/locomotive components. “Our members have worked tirelessly day in and night across the country, in helping CP earn record profits,” said Lana Payne, Unifor National President. “It is our expectation that CP rewards our members with the fair and equitable wage increases that they deserve.” Both sides exchanged proposals today and have dates booked in October to begin negotiations.
Home Capital Group announced the preliminary results of its substantial issuer bid to repurchase for cancellation up to $115,000,000 of its common shares. The alternative lender’s bid only saw about 1.55 million shares tendered at $28.60 per share, for a total cost of $44.3 million, representing less than half of the available offering.
Canadian Stocks Moving Markets This Morning
Biggest Gainers:
- BRP Inc (TSX:DOO) (+7.72%)
- Precision Drilling (+6.36%)
- Headwater Exploration (+6.07%)
Top Losers:
In Canadian Economics
Statistics Canada today reported that domestic manufacturing sales fell 0.9% to $71.6 billion in July, the third consecutive monthly decline. The decline was largely driven by lower sales in primary metals (-9.9%), petroleum and coal product (-5.3%), and furniture and related products (-11.2%) industries. Sales of motor vehicle parts (+10.7%), and paper products (+8.1%) meanwhile were amongst those that recorded the greatest increases.
In Lieu of the September 19th, Federal Holiday to mark Queen Elizabeth II’s state funeral, the Bank of Canada will postpone its planned 10-year bond auction for Sept. 22. A previously scheduled 5-year bond auction on Sept. 22 will now be held on Sept. 26. All other operations that support financial markets will run normally on Monday. The Toronto Stock Exchange, Canadian Securities Exchange, and Payments Canada - which runs the country’s payment clearing and settlement infrastructure - will be operational with regular hours.