Today’s top headlines
Here are Wednesday’s top three performers on the TSX
1. Waste Connections Inc. ($189.39, +2.68%)
Garbage was as good as gold on Oct. 25 as Woodbridge, Ont.-based Waste Connections Inc., a solid-waste service company that operates across North America, reported third-quarter earnings that beat analyst expectations. The company also raised its dividend 11.8 per cent. Analysts currently have 18 buys, two holds and two sells on the stock, and an average 12-month price target of $215.34, according to Bloomberg.
2. Fairfax Financial Holdings Ltd. ($1,122.93, +2.59%)
The Toronto-based financial services company built on a strong year of gains during which its stock has so far risen 40 per cent. Analysts currently have six buys, no holds and one sell on the stock, and an average 12-month price target of $1,122.93, according to Bloomberg.
3. Goeasy Ltd. ($110.16, +2.56%)
Shares of Goeasy Ltd. jumped after analysts at Desjardins Financial Services raised their price target for the company — which provides loans as well as leasing household furniture, appliances and home electronic products — to $160 from $155. Analysts currently have nine buys, one hold and no sells on the stock, and an average 12-month price target of $177.70, according to Bloomberg.
Gigi Suhanic, Financial Post
Market close: TSX posts small loss, U.S. markets tumble
Canada’s main stock index stepped lower despite strength in energy stocks and battery metals, while U.S. markets fell.
The S&P/TSX composite index closed down 38.64 points at 18,947.85.
In New York, the Dow Jones industrial average was down 105.45 points at 33,035.93. The S&P 500 index was down 60.91 points at 4,186.77, while the Nasdaq composite was down 318.65 points at 12,821.22.
The Canadian dollar traded for 72.56 cents U.S. compared with 72.83 cents U.S. on Tuesday.
The December crude oil contract was up US$1.65 at US$85.39 per barrel and the December natural gas contract was up five cents at US$3.38 per mmBTU.
The December gold contract was up US$8.80 at US$1,994.90 an ounce and the December copper contract was down three cents at US$3.59 a pound.
The Canadian Press
CPKC lowers earnings forecast on ‘economic headwinds,’ B.C. port workers strike
Canadian Pacific Kansas City Ltd. is lowering its financial forecast due to economic challenges and losses stemming from the B.C. port workers strike.
Chief executive Keith Creel says “economic headwinds” and the 13-day job action in July that shut down the country’s largest port prompted it to predict flat to slightly positive adjusted diluted earnings this year versus last.
The revision marks a more pessimistic outlook than the one offered three months earlier, when the Calgary-based company projected adjusted diluted earnings would grow by mid-single digits in 2023.
In the quarter ended Sept. 30, CPKC is reporting that net income fell 12 per cent to $780 million from the combined $891 million earned by Canadian Pacific and Kansas City Southern a year earlier — before the two railways merged in April.
Despite the drop in profits, CPKC says revenues surged 44 per cent to $3.34 billion in its third quarter from a combined $2.31 billion in the same period the year before.
Diluted earnings fell to 84 cents per share from 96 cents per share, below analyst expectations of more than 90 cents per share, according to financial data firm Refintiv.
The Canadian Press
Canada Growth Fund invests $90 million in Calgary geothermal company
A geothermal energy company is the first recipient of funding from the Canada Growth Fund, the federal government’s new $15-billion arm’s-length public investment vehicle.
Calgary-based Eavor Technologies Inc. has developed a proprietary closed-loop geothermal system that the company says can be used to produce clean, reliable baseload heat and power.
The Canada Growth Fund has committed $90 million of Series B preferred equity in the company, to help Eavor grow its business while retaining intellectual property and creating jobs in Canada.
Finance Minister Chrystia Freeland announced the creation of the Canada Growth Fund in the 2023 federal budget.
The fund is meant to help Canada’s economy transform and grow on the path to net-zero greenhouse gas emissions. Its mandate is to invest in Canadian clean technology businesses that are developing technologies at the commercialization stage.
One of the goals of the fund is to help bridge the liquidity gap in the Canadian clean technology market, offering support to companies at the critical stage of commercialization and development.
The Public Sector Pension Investment Board, is one of Canada’s largest pension investment managers, has been chosen to act as investment manager of the fund. It will do so through a wholly owned subsidiary, Canada Growth Fund Investment Management Inc.
The Canadian Press
Panama disrupted by protests against First Quantum’s giant copper mine
Labour unions, environmentalists and students paralyzed swaths of Panama today as mass protests against First Quantum Minerals Ltd.’s giant copper mine show no sign of abating.
Schools and universities shut, highways were blocked and bus services halted, as marchers demanded the repeal of the new contract for the Cobre Panama mine. On Tuesday, demonstrators burned tires, beat drums and clashed with police in riot gear, according to local newspaper La Prensa.
Many Panamanians say the revised operating contract is overly generous to the Canadian miner, and violates the nation’s sovereignty over its mineral resources. The contract gives First Quantum the right to produce copper at its site for 20 years, with the option to extend that for a further 20 years after that.
The mine is First Quantum’s top money-maker and accounts for about 1.5 per cent of global copper output.
Congress greenlit the contract on Oct. 20, relieving investors and ending years of legal uncertainty. President Laurentino Cortizo backed the mine, and called for protesters to respect private property in a national address on Tuesday. He said the deal reached with First Quantum includes taxes that will allow the government to increase pension payments to 120,000 retirees starting November 20.
Lawyers have filed three legal challenges against the new contract with the country’s Supreme Court this week, alleging it grants First Quantum excessive rights over Panamanian territory and violates the constitution.
The University of Panama and members of Panama’s construction workers’ union issued statements demanding that the government scrap the new contract and hold a national referendum on the question.
Environmental NGO, Centro de Incidencia Ambiental Panama, demanded Cortizo suspend First Quantum’s operations and declare a national mining moratorium over pollution concerns.
First Quantum’s chief executive Tristan Pascall said on a call with investors today that the company is aware of the protests and will work harder at communicating the benefits that mining can provide to communities in Panama.
Teck shares back where they began before Glencore offer
Teck Resources Ltd. has come full circle: After a tumultuous seven months kicked off by an unsolicited takeover offer from Glencore PLC that sent the Canadian firm’s stock soaring, its shares are now back where they began.
Teck’s stock had traded largely rangebound for months, as investors await the outcome of a plan to split out its coal business, while metals prices broadly have come under pressure. But a 9.1 per cent plunge on Tuesday, after the company increased the cost estimate for its flagship copper project by an additional US$600 million, erased the last of the gains since Glencore’s US$23 billion bid was made public in early April.
Teck shares closed at $48.38 each on Tuesday — below the March 31 closing price of $49.25 — before paring some of those losses Wednesday.
Teck refused Glencore’s takeover proposal and has instead pushed ahead with a strategy to separate from its coal business and become a stand-alone metals producer, which makes the success of its Chilean copper project particularly crucial. Glencore has offered to buy Teck’s coal business for about US$8 billion, and Teck says it is engaging with other interested parties as well.
Despite Tuesday’s sharp drop, Teck has still outperformed most of its rivals this year, as the mining industry broadly comes under pressure from slumping metals prices and rising costs.
But the company’s shares have fallen further than Glencore’s since the bid was announced, so that Teck is now trading well below the value of Glencore’s original all-stock proposal, suggesting investors are increasingly skeptical about the chances of a deal.
The stock slide puts more pressure on Teck to deliver on projects like Quebrada Blanca 2 that will be key to growing its metals business, while investors continue to wait for answers on the future of the coal mines. On a conference call Tuesday, chief executive Jonathan Price said the Vancouver-based company still hopes to make a decision about the coal unit by year end, but did not provide any new details.
Quebec public sector unions call for one-day strike on Nov. 6
Quebec’s common front of public sector unions is gearing up for a one-day strike on Nov. 6.
Certain hospitals and regional health boards have begun receiving strike notices for that day, one of those institutions confirmed today.
The unions did not confirm or deny the date, but they received a strike mandate from members on Oct. 17.
The mandate has the support of 95 per cent of members and calls for one-day walkouts before an indefinite strike begins.
The common front is made up of four main unions representing some 420,000 members in the health, education and social services sectors.
Treasury Board President Sonia LeBel is set to table a new contract offer on Sunday in Quebec City, attempting to advance negotiations that have been going on for months.
The unions are seeking a three-year contract with annual increases tied to the inflation rate — two percentage points above inflation in the first year, three points higher in the second and four points higher in the third.
The Quebec government is offering an increase of nine per cent over five years, as well as a lump-sum payment of $1,000 in the first year and other targeted increases that bring the total offer to 13 per cent over five years.
The Canadian Press
Montreal to ban most natural gas heating, cooking in new buildings
Montreal will ban gas-powered systems in new construction starting next fall, with some notable exceptions.
The new regulation, adopted by the city’s executive committee this morning, will apply to new, small buildings — up to three storeys and 600 square metres in area — as of Oct. 1, 2024, and larger buildings starting six months later.
Examples of soon-to-be prohibited systems include residential gas-powered stoves, indoor gas fireplaces, hot water heaters and furnaces that emit greenhouse gases and barbecues and pool or spa heaters that draw from gas lines.
The city says exceptions include emergency generators, commercial stoves in restaurants, gas-powered barbecues with removable tanks and temporary heating devices used during construction work.
Industrial buildings are also exempt, as are combustion heaters in larger buildings that draw only from renewable sources of gas.
Montreal says the measure will help it reach its goal of becoming carbon neutral by 2050, noting buildings account for one fourth of greenhouse gas emissions in the city.
The Canadian Press
Midday markets: TSX rises higher in mid-morning trading, U.S. markets mixed
Gains in industrials and battery metals helped lift Canada’s main stock index higher in mid-morning trading, while U.S. markets were mixed.
The S&P/TSX composite index was up 73.41 points at 19,059.90.
In New York, the Dow Jones industrial average was up 68.19 points at 33,211.16. The S&P 500 index was down 31.79 points at 4,215.89, while the Nasdaq composite was down 195.41 points at 12,944.47.
The Canadian dollar traded for 72.59 cents U.S. compared with 72.83 cents U.S. on Tuesday.
The December crude oil contract was down 13 cents at US$83.61 per barrel and the December natural gas contract was up four cents at US$3.86 per mmBTU.
The December gold contract was down 50 cents at US$1985.60 an ounce and the December copper contract was down almost two cents at US$3.61 a pound.
The Canadian Press
Ontario asks for finance ministers’ meeting on Alberta’s proposal to exit CPP
Ontario Finance Minister Peter Bethlenfalvy is asking federal Finance Minister Chrystia Freeland to convene a meeting to discuss Alberta’s proposal to withdraw from the Canada Pension Plan, saying the move could cause “serious harm.”
Bethlenfalvy has written to Freeland to ask for a federal-provincial-territorial meeting of finance ministers and is calling for a “rigorous analysis” of the assumptions Alberta is using to justify its plan.
He says that when people across the country are facing increasing pressures on household budgets, they shouldn’t have to worry about the security of their retirement savings.
The Alberta government commissioned a report that said the province would be entitled to leave CPP with $334 billion, more than half of the fund’s assets.
That reported cited Alberta’s relatively younger working population, higher incomes, fewer seniors drawing CPP and years of high contributions from people in the province.
The Canada Pension Plan Investment Board has estimated Alberta is owed about 16 per cent of the fund.
The Canadian Press
Read more: The CPP’s ‘original sin’ is coming back to haunt it as Alberta considers exit
Bank of Canada rate hold ‘good news’ for housing market
The Bank of Canada’s interest rate hold is “good news” for the housing market, according to LowestRates.ca mortgage expert Leah Zlatkin.
“While we still may see a rate hike before spring of 2024, hitting pause now shows that the end of rate hikes may be in sight,” she said in a note.
Although mortgage borrowers and homebuyers will be subject to higher rates for longer than anticipated, Zlatkin is expecting the rate pause to spur activity in the housing market, which has been in a holding pattern from cautious buyers and low listings.
“The window between rates peaking and the BoC beginning to cut rates could be a prime opportunity for those that have been waiting for a deal,” she said.
Zlatkin also expects home prices to soften in the next six months to a year.
She advises current buyers to take on shorter-term fixed-rate mortgages of one to three years to weather the remaining economic turbulence. She also recommends homeowners renew from 2025 onward in what is expected to be a more competitive rate environment.
Noella Ovid, Financial Post
Bank of Canada holds key interest rate at five per cent, keeps door open to more rate hikes
The Bank of Canada held its key interest rate steady at five per cent today, noting there are clearer signs of the economy cooling and inflation easing.
However, it warns that it is prepared to increase rates further if necessary.
The central bank says it’s still concerned that price growth is easing too slowly and that the inflation rate has been volatile in recent months.
Forecasters widely expected the rate hold as economic data suggests high interest rates are already causing an economic pullback.
New economic projections released by the central bank suggest economic growth will continue to be weak well into next year before picking back up in late 2024.
Inflation is still expected to return to the central bank’s two per cent target in 2025, however, the central bank says it expects inflation to be higher in the short term.
The Canadian Press
Read more: Bank of Canada holds interest rate at 5%, but another hike remains on table
Related: 3% by the end of 2024: What economists say about the Bank of Canada’s interest rate decision
Read the official statement here
Brookfield and Qatar invest £400 million in Canary Wharf Group
Canary Wharf Group, the developer of London’s dockland financial district, has received a fresh equity injection from its shareholders, as the area contends with high-profile departures and a shift to working from home.
Brookfield Corp. and the Qatar Investment Authority have committed to a £300 million ($500 million) equity injection for the firm as well as a £100 million ($167 million) revolving credit facility, according to a press release from the firm on Wednesday.
Canary Wharf Group has a £350 million bond due in 2025, which has been trading at a discount since last year. The bond was changing hands for 89.1 pence on the pound at 1:43 p.m. London time, after rising as much as 5.3 pence following the announcement.
“The proceeds will be used to complete the strategic repositioning of Canary Wharf and build out additional residential and life sciences projects on the estate,” the release said.
Canary Wharf has struggled since the pandemic led to a shift to flexible working, bringing in fewer workers to populate the desks of the large office blocks that dominate its skyline. HSBC Holdings PLC, Europe’s largest bank, said it would quit its skyscraper in the district for a new location in central London, following a similar move by law firm Clifford Chance. For decades dominated by financial services firms, the area is intent on drawing in more residential and life-sciences tenants.
Business leaders increasingly see importance of climate plans: survey
A new survey finds Canadian business leaders increasingly see climate change plans as good for their bottom line.
The survey commissioned by Bank of Montreal of 700 small and medium business leaders in Canada and the United States found that 62 per cent of those north of the border see a climate change plan as good for business, up from 47 per cent in the survey last year.
Other pressures such as inflation, interest rates, labour shortages and supply chain bottlenecks, however, still ranked as more pressing.
Melissa Fifield, who leads BMO’s climate institute, says it’s encouraging to see more businesses recognize the importance of developing a climate plan.
She says the results of the survey, conducted in August, were likely influenced by the widespread wildfires at the time that showed the unpredictable and severe weather events that climate change can create.
Fifield says extreme weather has prompted business leaders to think more about the impacts to their supply chains, buildings and other operations.
“What we’re seeing is that when companies are experiencing firsthand the impacts of climate on their business operations, they are more likely to develop a plan. And also when they see the opportunities for business. It’s not just risk-based.”
Respondents in Canada cited costs as the biggest barrier to taking action, including to developing a climate plan.
Fifield said such plans can also find efficiencies and cost savings, along with commercial opportunities such as appealing to new customers.
Climate plans generally involve measuring key areas like energy use, along with ways to decarbonize and build resilience.
Nearly half of respondents said climate change is already affecting their business, while 81 per cent said they expect it to within the next five years.
The Canadian Press
Air Canada accused of delaying boarding for British MP ‘because his name is Mohammad’
Air Canada is being accused in the United Kingdom’s House of Commons of delaying a British MP from boarding a flight “because his name is Mohammad.”
Clive Betts, standing on a point of order in the House this week, said fellow Labour MP Mohammad Yasin was pulled aside for questioning recently at London’s Heathrow Airport “for a considerable period” while other lawmakers he was travelling with were allowed through.
Betts told the House that Yasin was asked whether he was carrying a knife and where he was born.
He said the questioning was being done by “officials from Air Canada and, we believe, the Canadian government” despite Yasin having a visa to enter Canada.
Betts said Yasin was eventually allowed to get on the flight, but he was “challenged” again at the Montreal and Toronto airports.
He said while Yasin has received apologies from Air Canada as well as Canada’s parliamentary secretary to the federal immigration minister, it was important to put Yasin’s experiences on the parliamentary record due to their “racist and Islamophobic nature.”
“We raised the issue with our high commissioner in Ottawa, who was very supportive,” Betts is quoted as saying in Hansard, the official record of the proceedings.
“She was amazed at what had happened, given the multicultural nature of Canada as an open and welcoming country. She has raised the matter with the Canadian government and appreciates that I am raising it in Parliament, to try to ensure that no one is treated in this way in future.”
Air Canada did not immediately respond to a request for comment, but the airline said in a statement reported by the BBC that it regrets any inconvenience or upset caused and that it has reached out to Yasin to apologize.
“Unfortunately Mr. Yasin was designated for additional screening prior to his flight after a security check, but he was still able to travel as planned as he was quickly cleared,” the BBC reported Air Canada said.
“We are following up internally the handling of this particular matter to ensure procedures were properly followed and we have also been in touch with U.K. and Canadian authorities.”
The Canadian Press
Before the opening bell: Stock futures slide
U.S. equity-index futures dropped after Microsoft Corp. and Google’s parent Alphabet Inc. delivered a mixed picture of big tech earnings, setting the stage for peers still reporting this week.
Contracts on the Nasdaq 100 sank 0.6 per cent and those on the S&P 500 were down 0.4 per cent. Alphabet fell as much as seven per cent in premarket trading after its cloud unit reported a smaller than expected profit. Microsoft, on the other hand, climbed after results in its cloud business beat expectations. Meanwhile, Texas Instruments Inc. dropped after a disappointing revenue forecast suggested that demand remains sluggish for a broad range of electronic components.
With earnings season in full swing, investors are looking for evidence on how companies are coping with high interest rates and whether consumer spending is changing because of inflation.
“Tech earnings got off to a mixed start thanks to a focus on cloud computing, one of the big money spinners for the sector,” said Chris Beauchamp, chief market analyst at IG Group. “It’s now up to Meta tonight and Amazon tomorrow to provide the kind of good news that might give stocks a reason to rally into month-end.”
Europe’s stock benchmark was also weaker as earnings from some of the region’s biggest consumer-facing and fintech companies stoked concerns that a global economic slowdown is hurting corporate profits.
In Canada, the S&P/TSX composite index closed down 60.25 points at 18,986.49.
What to watch today
The Bank of Canada is expected to hold its key interest rate at five per cent when it announces its decision at 10 a.m. ET today. The central bank will also give its updated view on the economy in the Monetary Policy Report, which governor Tiff Macklem and senior deputy governor Carolyn Rogers will speak to at a news conference at 11 a.m.
Alberta Premier Danielle Smith will deliver a “state of the province” speech at the Edmonton Chamber of Commerce today.
Meta Platforms Inc. and Canadian Pacific Kansas City Ltd. release their earnings today.
Need a refresher on yesterday’s top headlines? Get caught up here.
CPP’s ‘original sin’ is coming back to haunt it
Retirees appear to be heading back to work as inflation eats into savings
Additional reporting by The Canadian Press, Associated Press and Bloomberg.
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