By Ketki Saxena
Investing.com – The TSX rallied this morning, tracking US indices higher following the all important US CPI data that showed a cooling in headline and core inflation, raising hopes of a downshift in the Federal Reserve’s monetary policy tightening.
The commodity heavy Canadian index was also supported by gains in crude as Fed expectations eased, and on renewed supply worries over a further raft of sanctions on Russian crude oil. The U.S. Energy Information Administration noted the upcoming EU ban on seaborne imports of Russian crude on Feb. 5 would be more disruptive than the EU ban implemented in December 2022.
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Algonquin Power and Utilities Corp. slashed its quarterly dividend by about 40%, meaning the quarterly payout will fall to US10.85 cents per share from US18.08 cents previously. Arun Banskota, Algonquin’s chief executive officer, noted the move was due to “various challenges that are putting pressure on our growth rates and making our dividend payout unsustainable”. The company also announced it will reduce its capital expenditures by about 15 per cent and target about US$1-billion in asset sales.
Aritzia Inc (TSX:ATZ). posted record quarterly revenue of $624.6 million, or a 38% increase from the year earlier. Net income was at $70.7 million, up 8.9% from a year earlier. Sales at stores open at least a year were up 23% in the quarter, The company also boosted its full-year revenue outlook to as much as $2.16 billion, up from a prior view of as much as $2.05 billion.
A day after news of West Fraser Timber (TSX:WFG) curtailing board production and shutting a saw mill, Interfor Corp (TSX:IFP) now announced it too will reduce lumber production due to market uncertainty. Interfor will cut 8% of production, amounting to at least 100 million board feet. Interfor expects to resume regular production in April, but will monitor market conditions and adjust plans accordingly.
More news in the sector: Canfor (TSX:CFP) Pulp Products announced that it will permanently close the pulp line at its Prince George pulp and paper mill. The shut down will result in a reduction of 280,000 tonnes of market kraft pulp annually. The company pointed to a lack of fibre for its pulp operations, noting in a statement that “In recent years, several sawmills have permanently closed in the Prince George region due to reductions in the allowable annual cut and challenges accessing cost-competitive fibre.”
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Canada and Mexico have won a trade dispute with the U.S. over cars shipped across regional borders. The U.S. had been insisting on a procedure to tally the origin of core parts produced as a percentage of a car’s overall content. The procedure would have created additional challenges for plants in Canada and Mexico to meet the duty-free threshold of 75% regional content under Nafta.