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TSX Gains Ahead of US CPI; Tamarack Valley Acquisition; Canadians' Debt Grows

Published 2022-09-12, 10:16 a/m
Updated 2022-09-12, 10:18 a/m
© Reuters.

© Reuters.

By Ketki Saxena 

Investing.com -- At 10:15 a.m in Toronto, the S&P/TSX Composite was at 19,990.17 points, up 1.10% in the day’s trading, tracking Wall Street higher as investors await tomorrow’s U.S. inflation data. Investors are hoping that the upcoming inflation figures will indicate easing inflation, for the second month in a row, with the reading expected at 8.1% compared to 8.5% the previous month. 

While a 75 bps hike is widely expected from the US central bank later this month, investors hope that easing inflation will incentivize the Fed to slow its aggressive policy tightening path after its September meeting. 

The commodity-heavy Canadian index was also supported by gains in crude, with the prospect of an Iran Nuclear deal appearing to recede after France, Britain and Germany expressed “serious doubts” over the weekend about Iran’s intentions to conclude the nuclear deal. Supply constraints also remain at the forefront given the EU’s decision to implement a price cap on Russian oil, despite OPEC’s nominal production cuts announced last week, and continuing lockdowns in China. 

The Biggest Stories on Bay Street

Calgary’s Tamarack Valley Energy Ltd (TSX:TVE) announced it will purchase the privately held Clearwater oil producer Deltastream Energy Corp in a deal valued at $1.425-billion. The acquisition will add about 23,000 barrels of oil equivalent per day of production in 2023.   Tamarack also announced that it will increase its monthly dividend by 25%. 

Tourmaline Oil (TSX:TOU) announced a 28% increase in its 2023 cash-flow forecast 28% to  $6.58 billion, citing “improving 2023 natural gas strip pricing(1) at several sales hubs”. Production will remain unchanged, however, with Tourmaline noting that “2023 average production guidance remains at 545,000 boepd (2.5 bcf/day of natural gas and 126,000 BPD of oil, condensate, and NGLs”. 

Equinox Gold (TSX:EQX), which saw a blockade at its Los Filos mine in Mexico - described by the company as an “illegal blockade” by members of the proximate Mezcala community - saw work resume on the blockaded site over the weekend. The company announced that the blockade was removed following an initial meeting with Mezcala community leaders and that the company will continue to engage with the community regarding operations at the mine. 

Magna International (TSX:MG) meanwhile announced it’s investing US$77 million for a stake in Yulu, India’s largest electric bike system. The arrangement will see the Canadian auto parts maker establish a battery-as-a-service business. Yulu said it will also use the funding to increase its two-wheeler electric vehicle (EV) fleet to more than 100, 000 electric and 500 plus battery charging and swapping stations over the next 12 months.

Canadian Stocks Moving Markets This Morning

Top Gainers: 

  • Sandstorm Gold (TSX:SSL) (+6.78%) 
  • First Majestic Silver (+4.29%)
  • Headwater Exploration Inc (TSX:HWX) (+4.15%) 

Top Losers: 

  • Corus Entertainment (TSX:CJRb) (-6.65%) 
  • Centerra Gold (TSX:CG) (-4.57%) 
  • Nutrien (TSX:NTR) (-4.28%)

In Canadian Economics 

Canadians' ratio of credit market debt to disposable income rose to 181.66 in the second quarter from 179.71 in the prior quarter, indicating that Canadians are becoming more indebted, and now owe $1.82 for every dollar of disposable income. The increase in debt was driven largely by  $48.7 billion in mortgages in the quarter, while disposable incomes faced downwards pressure as household net worth contracted by $990 billion as housing, equity, and bond markets experienced a downturn. 

Other data from StatsCan today includes a slight increase national net worth (defined as the sum of national wealth and Canada's net foreign asset positio) increasing 0.2% in the second quarter. Significant declines in the value of real estate and Canada's international investment position were counteracted by the continued expansion of natural resources wealth. National net worth per capita was nearly unchanged at $455,401.

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