TSX in the Red Ahead of Fed; Canadian CPI, Jobs Reports, Walmart-Quebec Expansion

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By Ketki Saxena 

Investing.com -- At 11:35 a.m  in Toronto, the S&P/TSX composite index was at 19,312.01 points, down 1.28% in the day’s trading as investors await another large interest rate hike and updated economic forecasts from the U.S. Federal Reserve tomorrow. 

In other bearish signals, the benchmark U.S. 10-year Treasury yield hit its highest level since April 2011, while the yield curve between two-year and 10-year bonds inverted further. 

The TSX was also pressured by domestic CPI data that reinforces expectations for the Bank of Canada to raise rates to 4% this year. Despite a cooling in headline inflation, core inflationary measures have yet to moderate, with food prices, in particular, soaring to a 41-year high. 

The commodity-heavy Canadian index was further weighed by losses in crude, with prices sliding for a fourth consecutive day on a strong dollar, and worries of an economic slowdown and demand destruction ahead of expected rate hikes from major central banks in the next two weeks. 

The Biggest Stories on Bay Street 

Walmart (NYSE:WMT) Canada announced a $1 billion infrastructure investment in Quebec that will include renovating stores, building a fulfillment centre and new retail locations.  also The investment will result in around 2727 jobs in retail, trade and construction across the province. The “cornerstone of the investment” will be a new high-tech fulfillment centre near Montreal, which will cost over $100 million to build and is set to open in 2024.

Westshore Terminals (TSX:WTE) announced yesterday that it will no longer be able to provide an operational forecast due to a strike that began over the weekend. The company noted that “we cannot anticipate the duration of the work stoppage; hence we are not able to provide guidance on volumes or rates for 2022 overall until operations resume”. Year-to-date Westshore loaded 19.0 million tonnes at an average rate of $12.06 per tonne. 

Another BC based company, lumber business Canfor (TSX:CFP) Corporation, also announced “work curtailment” resulting in reduced production capacity until the end of 2022, due to reduced global demand. The curtailment is expected to result in a reduction of approximately 200 million board feet of production capacity. 

Investors will also want to keep an eye on Aurora Cannabis (TSX:ACB) stock today, with the company expected to report Q4 earnings today afternoon after the close bell. Analysts expect a loss of 15 cents Canadian per share on revenue of C$50.774 M, compared to a loss of 22 cents Canadian per share on revenue of C$50.434 M in the previous quarter. Year to date, Aurora shares are trading down 71%. 

Canadian Stocks Moving Markets This Morning 

Top Gainers: 

• Canada Goose (TSX:GOOS) +3.55% 
• Nuvei (TSX:NVEI) +2.49% 
• Aritzia +2.34% 

Top Losers 

• Interfor Corp (TSX:IFP) -6.03%
• IamGold (-5.94%) 
• Canfor Corporation (-5.94%)  

In Canadian Economics 

Canadian inflation slowed to 7% year over year in August, lower than the 7.3% increase forecast by economists, and July’s 7.6% reading. Month over month, the consumer price index fell 0.3%, the largest decline since early in the COVID-19 pandemic as gasoline prices moderated and gains in the shelter index slowed, 

Statistics Canada also reported today that Canadian job vacancies hit a record high in the second quarter. Canadian employers were looking to fill 997,000 vacancies in the second quarter, up 4.7% from the prior quarter and 42.3% higher than this time last year. Average hourly wages increased 4.1% Q2.