Today’s top headlines
Here are the top 3 performers on the TSX this week
Nuvei Corp. ($25.64, 21.75 per cent)
Investors in the global payments technology business boosted shares of the Montreal based company after it raised its full-year and fourth-quarter revenue guidance and Citi Group lifted its price target to US$20 from US$17. Analysts have 12 buys, six holds and no sells on the stock and a 12-month price target of $39.20, according to Bloomberg.
Stella Jones Inc. ($83.03, 11.32 per cent)
Shares of the maker of utility poles and other wood products such as railway ties continue to rise after the Montreal-based company reported earnings that beat estimates and CIBC World Markets raised its price target to $83 from $74. Analysts have six buys, one hold and no sells on the stock and a 12-month price target of $91, according to Bloomberg.
Stelco Holdings Inc. ($42.45, 10.06 per cent)
Investors pushed up shares of Hamilton, Ont., based Stelco 12 per cent on Thursday after it reported earnings that beat estimates, leading investment banking firm Stifel to raise its price target for the steelmaker to $41 from $37. Analysts have two buys, five holds and no sells on the stock and a 12-month price target of $46.43, according to Bloomberg.
Market close: TSX posts small gain boosted by energy, while U.S. markets rally
Canada’s main stock index rose to make a small gain today, buoyed by strength in energy stocks, while U.S. markets rallied to end the week, led by a two-per-cent gain on the Nasdaq.
The S&P/TSX composite index closed up 67.06 points at 19,654.47.
In New York, the Dow Jones industrial average was up 391.16 points at 34,283.10. The S&P 500 index was up 67.89 points at 4,415.24, while the Nasdaq composite was up 276.66 points at 13,798.11.
The Canadian dollar traded for 72.36 cents U.S. compared with 72.56 cents U.S. on Thursday.
The December crude oil contract was up US$1.43 at US$77.17 per barrel and the December natural gas contract was down almost a penny at US$3.03 per mmBTU.
The December gold contract was down US$32.10 at US$1,937.70 an ounce and the December copper contract was down five cents at US$3.59 a pound.
The Canadian Press
S&P 500 on track for 7-week high
U.S. stocks rebounded as Treasury volatility abated, with traders looking past a disappointing reading on consumer sentiment and the United States Federal Reserve’s efforts to downplay the market’s dovish bid.
The S&P 500 hit the key 4,400 technical mark and was on track for a seven-week high. Tech giants led gains, with the Nasdaq 100 up almost two per cent. Microsoft Corp. climbed toward a record and Nvidia Corp. rallied for an eighth straight day. Two-year yields traded above five per cent, while those on 30-year bonds fell after a surge triggered by a weak government sale and Fed chair Jerome Powell’s remarks that officials won’t hesitate to tighten if needed.
“Calm in the Treasury market” is what a sustained market rally would require, said Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter. “Short, sharp declines are no more beneficial for stocks than short, sharp rises.”
Wall Street continued to keep an eye on the latest remarks from U.S. officials, with Fed Bank of Atlanta president Raphael Bostic saying policymakers can return inflation to their goal without the need to hike further. Data showed consumer long-term inflation expectations hit a 12-year high, while economic concerns weighed on sentiment.
The caution that pervaded equity markets in the past three months has now switched to “year-end greed” on expectations of a decline in US bond yields, according to Bank of America Corp.’s Michael Hartnett.
Desmarais family member to invest in $3-billion green hydrogen project in Quebec
The Canadian arm of Tree Energy Solutions GmbH will invest about US$3 billion to build a green hydrogen plant in Quebec.
The project is being financed privately — 60 per cent by Belgium-based Tree Energy and 40 per cent by a fund controlled by France Chretien-Desmarais, a member of the billionaire Desmarais family and the daughter of former Canadian Prime Minister Jean Chretien.
The project is expected to produce 70,000 metric tons of hydrogen a year from a site in Shawinigan, about 100 miles north of Montreal, starting in 2028. It will be mostly powered by wind and solar farms to be built nearby.
“The economic spinoffs will be significant for Shawinigan and the Mauricie region, and will position Québec as a leader in decarbonization,” Eric Gauthier, general manager of TES Canada, said in a news release. Gauthier is a former executive at Power Corp. of Canada, the Desmarais family’s publicly traded holding company.
About one-third of the hydrogen will be used for long-haul transportation in Quebec, while the rest will be used to produce so-called “electric renewable natural gas,” or e-NG.
Launched in 2019, Tree Energy Solutions has HSBC Holdings PLC and UniCredit SpA among its investors. It’s also looking at other large-scale projects around the world, including one announced in May in partnership with TotalEnergies SE in the U.S.
Midday markets: Losses in utility, base metal stocks weigh on TSX, while U.S. stocks up
Canada’s main stock index was down in late-morning trading, weighed down by losses in the utility and base metal stocks, while U.S. stock markets moved higher.
The S&P/TSX composite index was down 13.80 points at 19,573.61.
In New York, the Dow Jones industrial average was up 142.79 points at 34,034.73. The S&P 500 index was up 29.25 points at 4,376.60, while the Nasdaq composite was up 145.65 points at 13,667.10.
The Canadian dollar traded for 72.29 cents U.S. compared with 72.56 cents U.S. on Thursday.
The December crude oil contract was up US$1.31 at US$77.05 per barrel and the December natural gas contract was down a penny at US$3.03 per mmBTU.
The December gold contract was down US$22.70 at US$1,947.10 an ounce and the December copper contract was down five cents at US$3.59 a pound.
The Canadian Press
Top 1% of tax filers saw incomes rise by almost 10% in 2021: Statistics Canada
Statistics Canada says the country’s top one per cent of tax filers saw their incomes rise by almost 10 per cent in 2021, while those in the bottom half saw their average income decline.
The agency says the incomes of the top earnings group, excluding capital gains, jumped 9.4 per cent higher to $579,000.
Meanwhile, filers in the top 0.1 per cent saw their average income increase 17.4 per cent to almost $2.1 million and those in the top 0.01 per cent experienced an average income increase of 25.7 per cent, bringing their earnings to about $7.7 million.
At the same time, filers in the bottom half saw their average income fall by $1,400 to $21,100 in 2021 as the government ended many of its pandemic benefit programs.
Statistics Canada adds women made up roughly 26 per cent of the top one per cent of income tax filers, up from 25.4 per cent in 2020 and 11.4 per cent in 1982.
Its research also looked at money made from the sale of a home or other asset, finding 12.2 per cent of tax filers received capital gains, which had an average value of $37,600 in 2021. Average capital gains were $29,300 in 2020.
The Canadian Press
Markets open: Caution switches to ‘year-end greed’
Stocks rose and bond yields fell, with Wall Street traders looking past the United States Federal Reserve’s efforts to downplay the market’s dovish bid ahead of a key reading on consumer sentiment.
The S&P 500 snapped back, following a slide triggered by a Treasury selloff and Jerome Powell’s remarks that officials won’t hesitate to tighten, if needed. While that’s roughly the message that several Fed speakers have been sending over the past few days, it served as a catalyst for a pullback in markets after a solid November rally. Two-year yields dropped below five per cent, while the dollar halted a four-day advance.
On Friday, the S&P 500 was up 0.34 per cent at 4,362.06, while the Dow Jones Industrial Average rose 0.13 per cent to 33,937.42. The Nasdaq composite was up 0.49 per cent at 13,587.35.
“For the market to sustainably rally from here it still needs what it hasn’t received: Calm in the Treasury market,” said Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter. “Short, sharp declines are no more beneficial for stocks than short, sharp rises.”
Fed officials are trying to determine if they should keep raising rates after electing to leave the central bank’s benchmark unchanged at their last two policy meetings. It’s currently in a range of 5.25 per cent to 5.5 per cent, the highest level in 22 years. Fed Bank of Atlanta President Raphael Bostic said policymakers can return U.S. inflation to their goal without the need to hike further.
The caution that pervaded equity markets in the past three months has now switched to “year-end greed” on expectations of a decline in U.S. bond yields, according to Bank of America Corp.’s Michael Hartnett.
In Toronto, the S&P/TSX composite was down 0.20 per cent to 19,548.48.
Bloomberg, Financial Post
Trudeau government outlines $500 million in spending cuts
Prime Minister Justin Trudeau’s government has unveiled the details of $500 million in spending cuts, aiming to assure Canadians that fiscal responsibility is a priority amid high interest rates and stubborn inflation.
Still, the cuts represents only about 0.1 per cent of the $490 billion in spending budgeted for the 2023-2024 fiscal year. Treasury Board President Anita Anand put forward the plan for the cuts — which take aim at consulting, professional services and travel across 68 departments and agencies — in the House of Commons on Nov. 9.
The reductions are an initial step in the government’s first spending review since taking power in 2015. In total, the government aims to chop $15.4 billion from spending over five years and $4.5 billion annually after that, and Anand promised to reveal more details in the months to come.
“Not only is this the first time our government’s undertaking a spending review, but we’re also in a time of high inflation and high interest rates,” Anand said. “What we need to do is to ensure that we are spending taxpayer dollars prudently.”
Read the full story here.
Before the opening bell
Global equities retreated after United States Federal Reserve chair Jerome Powell’s warning that interest rates may have to climb further.
The Stoxx 600 shed 0.6 per cent, undermined also by a set of poor corporate announcements. Energy shares outperformed as the WTI crude oil benchmark rose for the second day in a row.
Nasdaq 100 index futures slipped 0.2 per cent, while 10-year Treasury yields held steady around 4.63 per cent, after surging on Thursday on renewed concern about higher interest rates. Earlier, Asian shares fell, tracking Wall Street’s lower close.
In Canada, the S&P/TSX composite index closed up 57.20 points at 19,587.41.
What to watch today
The United States is observing Veteran’s Day today, so bond markets will be closed. Stock markets are open.
The Bank of Canada’s senior loan officer survey for the third quarter will be released at 10:30 a.m. ET.
In the U.S., the University of Michigan Consumer Sentiment Index will land at 10 a.m.
Sleep Country Canada Holdings Inc. will release its third quarter earnings and hold a conference call at 8 a.m. SNC-Lavalin Group Inc., which recently changed its name to AtkinsRealis, will also release earnings.
Investors still don’t believe in the new normal
Higher-income earners will soon contribute more to CPP
Need a refresher on yesterday’s top headlines? Get caught up here.
Additional reporting by The Canadian Press, Associated Press and Bloomberg
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