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Companies announced the highest level of job cuts in January since early 2023, a potential trouble spot for a labor market that will be in sharp focus this year, according to a report Thursday from Challenger, Gray & Christmas.

The job outplacement firm said planned layoffs totaled 82,307 for the month, a jump of 136% from December though still down 20% from the same period a year ago.

It was the second-highest layoff total and the lowest planned hiring level for the month of January in data going back to 2009.

Technology and finance were the hardest-hit sectors, with high-flying Silicon Valley leaders such as Microsoft, Alphabet and PayPal announcing workforce cuts to start the year. Amazon also said it would be cutting as did UPS in the biggest month for layoffs since March 2023.

“Waves of layoff announcements hit US-based companies in January after a quiet fourth quarter,” said Andrew Challenger, senior vice president of the firm. The cuts were “driven by broader economic trends and a strategic shift towards increased automation and AI adoption in various sectors, though in most cases, companies point to cost-cutting as the main driver for layoffs,”

Financial sector layoffs totaled 23,238, the worst month for the category since September 2018. Tech layoffs totaled 15,806, the highest since May 2023. Food producers announced 6,656, the highest since November 2012.

“High costs and advancing automation technology are reshaping the food production industry. Additionally, climate change and immigration policies are influencing labor dynamics and operational challenges in this sector,” Challenger said.

The report follows news Wednesday from ADP that private payrolls increased by just 107,000 for the month. On Friday, the Labor Department will be releasing its nonfarm payrolls count, which is expected to show growth of 185,000.

Initial jobless claims totaled 224,000 for the week ended Jan. 27, up 9,000 from the previous week. Continuing claims, which run a week behind, jumped by 70,000, the Labor Department reported Thursday.

Canadian manufacturing activity declined for a ninth straight month in January but there was a slowdown in the pace of contraction as inflation pressures eased and firms grew more confident about the outlook, data showed on Thursday.

The S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) rose to a seasonally adjusted 48.3 in January after slumping to 45.4 in December, its lowest level since May 2020.

A reading below 50 indicates contraction in the sector. The PMI has been below that threshold since May, which is the longest such stretch in data going back to October 2010.

The latest data “provide hope that the downturn in the sector is bottoming out,” Paul Smith, economics director at S&P Global Market Intelligence, said in a statement. “Moreover, firms are looking to brighter times in the next 12 months.”

The future output index climbed to 61.9 from 59.7 in December, posting its highest level in six months, while price measures showed inflation pressures cooling.

The input price index fell to 53.3 from 54.1 in December and the output price index was at a seven-month low of 52.2, down from 52.7.

“Manufacturers and indeed policymakers will also be encouraged by the latest price indices, which continued their recent disinflationary paths in January,” Smith said.

The Bank of Canada has said that its focus is shifting to when to cut interest rates rather than whether to hike again.

On a more cautious note, the average lead times for the delivery of inputs lengthened for the fourth time in five months as firms reported shipping delays caused by the crisis in the Red Sea and Suez Canal.

The suppliers’ delivery times index fell to 48.8 from 50.9 in December.

Saudi Arabia is still considering an invitation to become a member of the BRICS bloc of countries after being asked to join by the group last year, a Saudi official source told Reuters.

The source commented after South Africa’s Foreign Minister Naledi Pandor said on Wednesday the kingdom had joined the grouping.

“Saudi Arabia has not yet responded to the invitation to join BRICS. It is still under consideration,” the Saudi official source said in a statement to Reuters.

The group in August invited Saudi Arabia, the United Arab Emirates, Egypt, Iran, Argentina and Ethiopia to join from Jan. 1, although Argentina signalled it would not take up the invitation in November.

The expansion of the BRICS group, whose current members are Brazil, Russia, India, China and South Africa, would give it additional economic heft and could also boost its declared ambition to become a champion of the Global South, helping reshuffle a world order it views as outdated.

Faisal Alibrahim, Saudi Arabia’s economy minister, earlier this month said the kingdom was still looking into the matter.

Riyadh is weighing its options against a backdrop of rising geopolitical tensions between the United States, China and Russia, and as the kingdom’s warming ties with Beijing have caused concern in Washington.

Fellow Gulf Cooperation Council (GCC) member the UAE United Arab Emirates has said it had joined the bloc.

Brookfield Infrastructure Partners LP (BIP) on Thursday reported a key measure of profitability in its fourth quarter.

The real estate investment trust, based in Hamilton, Bermuda, said it had funds from operations of $622 million, or 79 cents per share, in the period.

Funds from operations is a closely watched measure in the REIT industry. It takes net income and adds back items such as depreciation and amortization.

The company said it had a loss of $82 million, or 20 cents per share.

The operator of utility, transportation and energy assets, based in Hamilton, Bermuda, posted revenue of $4.97 billion in the period.

For the year, the company reported funds from operations of $2.29 billion. Revenue was reported as $17.93 billion.

The company’s shares have fallen slightly since the beginning of the year. The stock has declined 11% in the last 12 months.

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This story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on BIP at https://www.zacks.com/ap/BIP

Canada Goose Holdings Inc. reported $130.6 million in net income attributable to shareholders for its third-quarter as its revenue rose six per cent compared with a year ago.

The luxury parka maker says the profit amounted to $1.29 per diluted share for the quarter ended Dec. 31 compared with net income attributable to shareholders of $134.9 million or $1.28 per diluted share a year earlier when it had more shares outstanding.

Revenue for the quarter totalled $609.9 million, up from $576.7 million in the same quarter a year earlier.

On an adjusted basis, Canada Goose says it earned $1.37 per diluted share in its latest quarter, up from an adjusted profit of $1.27 per diluted share a year earlier.

In its outlook, the company says it expects revenue between $310 million and $330 million for its fourth quarter and an adjusted profit between two and 13 cents per diluted share.

For its full 2024 financial year, Canada Goose says it expects total revenue between $1.285 billion and $1.305 billion compared with its earlier guidance for between $1.2 billion and $1.4 billion. Adjusted net income per diluted share is now expected between 82 cents and 92 cents compared with earlier guidance for between 60 cents and $1.40.

This report by The Canadian Press was first published Feb. 1, 2024.

Rogers Communications Inc. RCI-B-T +1.43%increase saw its fourth-quarter profit decline by 35 per cent to $328-million, while its revenue rose 28 per cent to $5.34-billion.

The profit for the three-month period ended Dec. 31 amounted to 62 cents per share, down 38 per cent from $1.00 per share during the same quarter last year.

The Toronto-based telecom giant attributed the lower profit to higher depreciation and amortization on assets it acquired when it took over Shaw Communications Inc., higher financing costs and higher restructuring, acquisition and other costs, primarily due to the takeover and integration of Shaw.

After adjusting for some of those items, Rogers had $630-million of profit, up 14 per cent from a year ago.

The adjusted profit amounted to $1.19 per share, surpassing analyst expectations of $1.12 per share for adjusted earnings and revenue of $5.27-billion, according to the consensus estimate from S&P Capital IQ.

“Today, Alberta and B.C. are our fastest growing markets, and we’re gaining healthy market share,” Rogers president and CEO Tony Staffieri told analysts during a conference call Thursday. “We said we would increase competition in the west and we have.”

Rogers added 111,000 net new wireless customers during the quarter, down from 186,000 a year ago. On a net basis, the telecom added 184,000 postpaid wireless customers but lost 73,000 prepaid customers. (Postpaid customers are billed at the end of the month for the services they used, versus prepaid customers, who pay upfront for wireless services.)

Churn – the rate of customer turnover on a monthly basis – in the telecom’s postpaid subscriber base increased to 1.67 per cent, from 1.24 per cent during the fourth quarter of 2022.

During Thursday’s conference call, TD Securities analyst Vince Valentini called the churn figure the highest “we’ve seen in a long time.”

However, Mr. Staffieri said he is “not concerned about what we’re seeing on churn.”

“What we saw in the fourth quarter was a heightened level of what I would call promotional activity in the bottom end of the market … our focus was on the premium,” Mr. Staffieri said.

Wireless ARPU, or Average Revenue Per User, was $57.96, down 73 cents from a year ago when it came in at $58.69.

The company also issued its financial guidance for 2024, projecting that service revenue will grow between 8 to 10 per cent while adjusted EBITDA – Earnings Before Interest, Taxes, Depreciation, and Amortization – is expected to increase between 12 to 15 per cent.

The company anticipates capital expenditures of $3.8-billion to $4-billion and free cash flow of $2.9-billion to $3.1-billion, up from $2.4-billion in 2023.

Scotiabank analyst Maher Yaghi said Rogers is executing well on “merger related synergies” and that its wireless results “continue to show strong momentum supported by immigration growth.”

Mr. Yaghi wrote in a research note that he expects Rogers to continue exerting additional pressure on its competitors, “but not necessarily with lower prices; actually we have seen Rogers push price increases lately.”

Rather, the competitive pressure will come from “beefed up marketing, customer service improvements with AI and new potential product offerings like fixed wireless access to fill in areas where the company does not have a fixed line high speed internet solution,” Mr. Yaghi wrote.

Shares of Rogers rose $1.05, or 1.67 per cent, to $63.85 in Thursday morning trading on the Toronto Stock Exchange.

Earnings reports this week from five of the so-called Magnificent Seven stocks are putting a renewed focus on risks from the group’s outsize weighting in the S&P 500.

Last year, eye-popping gains for the huge tech and growth stocks accounted for the bulk of the S&P 500′s 24% rise, with the hefty market values of the seven making them a driving force in the market cap-weighted index. Their performance has already helped drive the S&P 500 up over 3% this year as of Tuesday’s close.

But concerns have grown that the companies’ huge influence can work both ways, dragging down the broader indexes if they falter.

Analysts at JPMorgan said on Tuesday the market’s narrow leadership was becoming “increasingly unhealthy,” with the Magnificent Seven – Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft, Nvidia and Tesla – accounting for nearly 29% of the S&P 500.

Should the Magnificent Seven stocks weaken, they are “going to have a serious impact on the indices because of the high weight they have,” said Matt Maley, chief market strategist at Miller Tabak. “Any meaningful pullback in tech is going to knock down the major averages and scare a lot of investors.”

The Nasdaq Composite Index is also market cap-weighted, while the 30-component Dow Jones Industrial Average is price-weighted. Of the Magnificent Seven, only Apple and Microsoft are part of the Dow Jones.

The current earnings season is poised to be a test of whether the megacap companies can live up to investors’ lofty expectations. The early returns were dour: All of the Magnificent Seven were trading lower on Wednesday morning, weighing on the S&P 500, following results from Microsoft and Alphabet late on Tuesday.

Microsoft, whose market value recently topped US$3 trillion, beat estimates for quarterly revenue, but shares were lower as investors absorbed news about rising costs to develop artificial intelligence features. Shares of Google parent Alphabet were down over 6% at midday Wednesday, as its holiday-season advertising sales disappointed and the company said spending on items such as servers to power AI would jump this year.

Wednesday’s share-price drops pared their respective year-to-date gains, with Microsoft last up 7% in 2024 and Alphabet up about 1.5%. Shares of Nvidia are up about 23% this year and Meta Platforms has gained 11%. Tesla shares, on the other hand, are down 23% so far in 2024, tumbling last week after CEO Elon Musk warned sales growth would slow this year.

In 2023, the Magnificent Seven individually soared between around 50% and 240%, and were collectively responsible for 62% of the S&P 500′s total return.

While that kind of performance has thrilled many investors, it has presented a more challenging environment for active fund managers, who seek to beat gauges such as the S&P 500 or Russell 1000 because many have held allocations to the Magnificent Seven that are smaller relative to the stocks’ weighting in those indexes.

Only 23% of large-cap funds that benchmark against the Russell 1000 beat the index last year, according to JPMorgan data.

Fund managers may hold less of the stocks for a variety of reasons, including a desire for portfolio flexibility, worries over owning too much of any one position and limitations imposed by the rules of their own funds.

“In an environment like this, diversified funds will struggle,” said Chuck Carlson, chief executive at Horizon Investment Services. “When you have just a few companies that are leading the way, managers can’t own those companies in enough bulk to offset that concentration of performance at the top.”

Indeed, the S&P 500 beat the equal-weight S&P 500, a proxy for the average stock in the index, by 12 percentage points last year. The equal weight index is trailing again so far in 2024, up just 0.4%.

In a note on Tuesday, BofA Global Research said the Magnificent Seven account for almost 20% of the market cap of the MSCI’s world equities index, with Apple and Microsoft each nearly the size of Japan, the second-largest country in the index.

The bank’s clients are worried about Magnificent Seven concentration and “that actives will only get more squeezed in to keep up with benchmarks/peers, further fueling upside momentum,” the firm’s analysts said.

The stocks could see more volatility later this week, when Apple, Amazon and Meta report quarterly results. To be sure, stellar reports could further invigorate the stocks and drive indexes higher.

“The fact that the market is very concentrated in them does worry me,” said Peter Tuz, president of Chase Investment Counsel, which owns the Magnificent Seven stocks except for Tesla. “Mitigating against that is for the most part these are exceptionally strong companies that dominate their niches.”

Saudi Arabia’s surprise reversal of its oil expansion ambitions was at least six months in the making, said an industry source, after Riyadh concluded its vast spare capacity was enough to supply markets during crises and further investments in new fields would make no economic sense.

State oil giant Aramco was ordered by the Saudi energy ministry on Tuesday to halt plans to boost its maximum sustainable capacity to 13 million barrels per day (bpd), returning to the previous 12 million bpd target.

The kingdom is the world’s largest oil exporter and is pumping around 9 million bpd, well below capacity after several output cuts co-ordinated with the de facto Saudi-led Organization of the Petroleum Exporting Countries (OPEC) and its allies.

With around 3 million bpd of capacity to spare, an assessment was made that much of that was not being monetized, the industry source said.

“I think price management is the priority for 2024 and 2025,” said a second person familiar with the matter.

“This is a deferral and will likely resume at a later date,” the person said. “This has no bearing on the view of long-term demand.”

The decision came from the top, both sources said.

The Saudi government’s communication office and energy ministry did not immediately respond to requests for comment.

“We think the decision is likely primarily a function of a more resilient supply outlook rather than a change in view on demand,” Barclays said in a note on Wednesday.

During U.S. President Joe Biden’s visit to the kingdom in July 2022, Crown Prince Mohammed bin Salman warned that Riyadh “will not have any more capability to increase production” after it reached the now-scrapped 13 million bpd goal.

The kingdom had ordered Aramco to reach that level by 2027 in March 2020, during an oil market standoff with Russia. OPEC has been working closely with Russia as part of the so-called OPEC+ alliance.

Since late 2022, OPEC+ has cut 5.86 million bpd of oil output to prop up oil prices, equal to roughly 5.7 per cent of daily world demand, according to Reuters calculations.

Despite record demand, OPEC’s market share has reached its lowest since the COVID-19 pandemic following output cuts and member Angola’s exit, as well as rising non-OPEC supply.

In its latest monthly report, OPEC forecast that demand for its crude would grow by about 1.3 million bpd by the end of 2025, meaning it would only be able to unwind a third of its cuts of close to 4 million bpd.

HSBC said there was little space for more Saudi oil, with rising non-OPEC supply and a slowdown in global demand growth expected to “crowd out OPEC barrels in the medium term.”

According to HSBC’s estimates, Aramco had little space to produce much above 10 million bpd in the next two to three years. “This decision might be a recognition of these trends,” it said in a research note.

Saudi Arabia for decades was the world’s only source of significant spare oil capacity, which acts as a safety cushion for global supplies in case of major disruptions. In recent years, fellow OPEC member the United Arab Emirates has also built up spare capacity.

Aramco is due to release its full-year 2023 financial results in March, when it is expected to provide an update on its capital expenditure, now widely expected to be revised downwards following the capacity decision.

The Saudi state remains overwhelmingly Aramco’s biggest shareholder and heavily relies on its generous payouts.

The change to expansion plans could be driven by “the importance of Aramco to Saudi’s fiscal position with potential capex reduction being directed towards an increase in dividends,” BofA Global Research said in a research note.

Saudi Arabia is the single largest contributor to OPEC+ curbs – and lower volumes, combined with relatively lower oil prices, weigh on state finances. In November, Riyadh said it would extend an additional voluntary 1 million bpd cut it made last summer into the first quarter.

“On its face, the decision may give Saudi Arabia a bit more freedom to maintain a restrictive output policy beyond Q1 ‘24,” Macquarie said in a note, adding it did “not see an oil market sorely wanting for additional Saudi supply.”

 CGI Inc. reported its first-quarter profit and revenue rose compared with a year ago.

The Montreal-based business and technology consulting firm says it earned $389.8 million or $1.67 per diluted share for the quarter ended Dec. 31.

The result compared with a profit of $382.4 million or $1.60 per diluted share in the same quarter a year earlier.

CGI says it its profit excluding specific items amounted to $1.83 per diluted share, up from $1.66 per diluted share a year earlier.

Revenue for the three-month period totalled $3.60 billion, up from $3.45 billion a year earlier.

Excluding foreign currency variations, CGI says revenue grew by 1.5 per cent year-over-year.

This report by The Canadian Press was first published Jan. 31, 2024.

Companies in this story: (TSX:GIB.A)