TSX Declines as Risk-Aversion Dominates; Suncor Sells Canadian Assets; Crude Gains

© Reuters

By Ketki Saxena

Investing.com -- The TSX, along with Wall Street North continued to pull back after a short-lived rally earlier this week, as the possibility of a “Pivot” from the Fed receded, with several Fed Policy Makers yesterday and Minneapolis Fed President Neil Kashkari doubling down on the need to keep raising rates. U.S. and Canadian benchmark yields marched ahead.

Today’s US jobless claims came in higher than expected, although the labour market remains strong. Investors are continuing to bet that the Fed will keep interest rates high for a longer period of time after yesterday’s ADP (NASDAQ:ADP) data showed resilient demand in the American private sector job market.

All TSX Sectors barring energy were in the red today in a broad-based decline as risk-aversion dominated markets. The TSX Energy index meanwhile continued to climb, following the announcement of a 2 million barrel per day (bpd) production cut from OPEC+. It is the largest reduction from the bloc since 2020, and is set to tighten production significantly, particularly in the context of looming European embargoes on Russian energy.

The Biggest Stories on Bay Street

Suncor Energy (TSX:SU) said on Wednesday it would sell its wind and solar assets in Canada to Canadian Utilities for C$730 million. The deal covers all of Suncor’s wind and solar assets in Canada other than the recently decommissioned SunBridge wind facility in Saskatchewan. The assets Canadian Utilities is acquiring are located in Ontario and Alberta, with an operating capacity of 252 megawatts, plus more than 1,500 megawatts of projects that are in development. Divesting of these wind and solar assets further streamlines our portfolio so that we can concentrate our efforts on our core business,” Kris Smith, Suncor’s interim president and chief executive officer, said in a release.

Invesco Canada Ltd. – a subsidiary of U.S.-based global asset manager Invesco Ltd. – announced today that it has entered into a strategic agreement with NEI Investments, which specializes in ethical funds, to add to its portfolio of exchange-traded funds. The partnership will help Asset manager Invesco Canada enhance its portfolio of existing environmental, social and governance index ETFs, and develop new ESG ETFs set to start launching in 2023.

Constellation Brands (NYSE:STZ) announced that it booked a US$1.06-billion impairment charge on its exposure to Canopy Growth (TSX:WEED) in Q2. Constellation Brands also reported second-quarter revenue of $2.65 billion, which beat average analyst estimates of $2.51 billion. The company reported quarterly earnings of $3.17 per share, compared to analyst estimates of $2.81 per share. Beer sales surged 15% year-over-year. Constellation also announced the sale of some of its wine brands, with terms yet to be disclosed.

Canadian Stocks Moving Markets Today

Top Gainers:

• Fortuna Silver Mines Inc (TSX:FVI)
• Filo Mining Corp (TSX:FIL)
• Headwater Exploration Inc (TSX:HWX)

Top Losers:

• Sleep Country Canada Holdings Inc (TSX:ZZZ)
• Waste Connections Inc (TSX:WCN)
• ECN Capital Corp (TSX:ECN)

In Canadian Economics

In a speech today, Bank of Canada Governor Tiff Macklem reiterated: "We've been pretty clear that interest rates need to continue to move up”. Mr. Macklem doubled down on the need to tame inflation, noting “The longer high inflation persists and the more pervasive it becomes, the greater the risk that high inflation becomes entrenched”.