By Ketki Saxena
Investing.com – The TSX traded in the red at midday, as US indices remained mixed following economic data that showed a decline in consumer confidence, and as US family home prices increased at their slowed pace since the summer of 2020.
Following a rebound in risk sentiment to start the week, fears of a hawkish Federal Reserve continued to dominate markets, with Fed funds futures fully pricing in a 25 bps rate rise from the Fed next month, with around a 20% chance of a 50 bps hike. Risk aversion is also being driven by expectations of further interest rates from global central banks, particularly after hot inflation data today from Spain and France.
The Canadian index was most pressured by financials today as Bank earnings rolled in, but gained some support from crude prices on hopes of Chinese growth, as investors await key data from the country this week.
The Biggest Stories on Bay Street
Scotiabank earnings missed analyst estimates, as net income plunged 35% o $1.77 billion, or $1.36 a share. Excluding some items, profit was $1.85 a share, below analyst estimates for $2.02, on average. The bank set aside $638 million in provisions for credit losses, compared to analyst projections for $626.3 million.
Bank of Montreal(TSX:BMO)’s net income dropped 92% to $247 million, or 30 cents a share, largely related to accounting adjustments concerning the Bank of the West acquisition. Excluding some items, profit was $3.22 a share compared to analyst estimates for $3.16, on average. The bank set aside $217 million in provisions for credit losses compared to analyst projections for $300.5 million.
Baytex Energy Corp (TSX:BTE). announced it has signed a deal to buy U.S. company Ranger Oil Corp. in a deal valued at $3.4 billion, including assumed debt. Ranger Oil operates in the Eagle Ford shale region in south Texas. Under the terms of the agreement, Ranger shareholders will receive 7.49 Baytex shares plus US$13.31 in cash for each Ranger common share. The companies valued the total consideration at about US$44.36 per Ranger share.
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In Canadian Economics
The Canadian economy stalled in the fourth quarter of last year, with real gross domestic product remaining unchanged in the Q4 2022 after five consecutive quarters of growth. Statistics Canada’s preliminary estimate had predicted 1.6% annualized growth for the quarter Today’s data shows that the Canadian economy is slowing more than expected following the Bank of Canada’s rate hike spree, that has seen the benchmark rate soar from 0.25% at the beginning of last year to its current level of 4.5%.