Author: Consultant

Monday Feb. 5

China, Japan and Euro zone services and composite PMI

Germany trade surplus

(9:30 a.m. ET) Canada’s S&P Global Services PMI for January.

(10 a.m. ET) U.S. ISM Services PMI for January.

(10:30 a.m. ET) Bank of Canada’s Market Participants Survey for Q4.

Earnings include: Caterpillar Inc.; Coveo Solutions Inc.; Estee Lauder Companies Inc.; McDonald’s Corp.; Palantir Technologies Inc.; TMX Group Ltd.; United Corporations Ltd.

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Tuesday Feb. 6

Japan household spending

Euro zone three-year CPI expectations and retail sales

(8:30 a.m. ET) Canadian building permits for December. Estimate is a month-over-month increase of 1.0 per cent.

(10 a.m. ET) U.S. Global Supply Chain Pressure Index for January.

(12:45 p.m. ET) Bank of Canada governor Tiff Macklem speaks at the Montreal Council on Foreign Reserves.

Earnings include: Amgen Inc.; Chipotle Mexican Grill Inc.; Eli Lilly & Co.; Finning International Inc.; First Capital Realty Inc.; FirstService Corp.; Ford Motor Co.; Gilead Sciences Inc.; International Petroleum Corp.; Precision Drilling Corp. Toyota Motor Corp.; UBS Group AG

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Wednesday Feb. 7

Germany industrial production

(8:30 a.m. ET) Canada’s merchandise trade balance for December.

(8:30 a.m. ET) U.S. goods and services trade balance for December.

(3 p.m. ET) U.S. consumer credit for December.

Earnings include: Alibaba ADR; Canaccord Genuity Group Inc.; Ceridian HCM Holding Inc.; Computer Modelling Group Ltd.; CVS Health Corp.; Meta Platforms Inc.; PayPal Holdings Inc.; Sun Life Financial Inc.; Uber Technologies Inc.; Walt Disney Co.

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Thursday Feb. 8

China CPI, PPI, aggregate yuan financing, new yuan loans and money supply

ECB Economic Bulletin is released

(8:30 a.m. ET) U.S. initial jobless claims for week of Feb. 3. Estimate is 219,000, down 5,000 from the previous week.

(10 a.m. ET) U.S. wholesale trade for December.

Earnings include: BCE Inc.; Colliers International Group Inc.; ConocoPhillips; Duke Energy Corp.; Interfor Corp.; Lightspeed Commerce Inc.; Motorola Solutions Inc.; Philip Morris International Inc.; Russel Metals Inc.; Saputo Inc.; S&P Global Inc.; TFI International Inc.; Trisura Group Ltd.

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Friday Feb. 9

China’s markets closed

Germany CPI

(8:30 a.m. ET) Canadian employment for January. The Street expects a month-over-month increase of 0.1 per cent, or 15,000 jobs, with the unemployment rate rising 0.1 per cent to 5.8 per cent.

(10:30 a.m. ET) Bank of Canada Senior Loan Officer Survey for Q4.

Earnings include: Arc Resources Ltd.; CAE Inc.; Cameco Corp.; Enbridge Inc.; Fortis Inc.; Magna International Inc.; PepsiCo Inc.; Telus International Inc.

March WTI crude oil (CLH24) on Friday closed down -1.54 (-2.09%), and Mar RBOB gasoline (RBH24) closed down -4.73 (-2.16%).

Crude oil and gasoline prices on Friday tumbled to 2-week lows and closed moderately lower.  Friday’s rally in the dollar index (DXY00) to a 7-week high weighed energy prices.  Also, advanced negotiations to halt the war in Gaza and release hostages are reducing the geopolitical risk premium in crude prices.  Technical selling added to Friday’s decline in crude after prices fell below their 50 and 200-day moving averages, triggering trend-following algorithms.

Crude prices are under pressure as negotiations continue for a halt in the war in Gaza, which has threatened crude shipments from the Middle East.  Bloomberg reported that talks are advancing for an agreement to pause the Israel-Hamas war and free civilian hostages captured by Hamas.

Friday’s stronger-than-expected U.S. economic news is bullish for energy demand and crude prices.  Jan nonfarm payrolls jumped +353,000, stronger than expectations of +185,000 and the biggest increase in a year.  Also, the Jan unemployment rate was unchanged at 3.7%, showing a stronger labor market than expectations of an increase to 3.8%.  In addition, the University of Michigan U.S. Jan consumer sentiment index was revised upward by +0.2 to a 2-1/2 year high of 79.0, stronger than expectations of 78.9.

Geopolitical tensions in the Middle East continue to support crude prices.  President Biden said the U.S. would soon retaliate for the attack on a base in Jordan last Sunday by militants in Iraq that killed three U.S. service members.  Last Friday, Houthi rebels ramped up attacks on commercial shipping in the Red Sea and struck an oil tanker with a missile that was carrying fuel in the Gulf of Aden.  The U.S. and the UK continue to launch airstrikes against Houthi rebels in Yemen in retaliation for Houthi attacks on commercial shipping in the Red Sea.  Earlier this month, the U.S. Navy advised vessels to avoid the southern Red Sea.  Houthis started attacking ships in the Red Sea in mid-November in support of Hamas in the Israeli-Hamas war and said they won’t stop the attacks until Israel ends its assault on Gaza.  Attacks on commercial shipping in the Red Sea by Iran-backed Houthi rebels have forced shippers to divert shipments around the southern tip of Africa instead of going through the Red Sea, disrupting global crude oil supplies.

Crude prices also have support after a Ukranian drone attack last Thursday damaged Russia’s Rosneft PJSC’s major Tuapse refinery on Russia’s Black Sea coast.  Russia said last Friday that the Tuapse refinery, which processed 180,000 bpd of crude in the first half of January, will be shut down through at least February.  In recent weeks, several Russian oil processing and storage facilities have been targeted and damaged by Ukrainian drone attacks, increasing the risks of reducing Russian crude exports.

A negative factor for crude prices was Monday’s report from Kpler Ltd that showed OPEC+ members are dragging their feet on new crude output cuts.  According to Kpler estimates, exports from the seven OPEC+ members engaged in new crude production cuts announced for January have averaged about 15.4 million bpd so far this month, barely changed from December.

A decline in Russian crude oil exports is supportive of crude oil prices.  Tanker-tracking data from Vortexa monitored by Bloomberg shows the four-week average of refined fuel shipments from Russia fell to 3.09 million bpd in the four weeks to Jan 28, down -250,000 bpd from the prior week.

A decline in crude in floating storage is bullish for prices.  Monday’s weekly data from Vortexa showed that the amount of crude oil held worldwide on tankers that have been stationary for at least a week fell -18% w/w to 63.97 million bbl as of Jan 26, the lowest in 3-3/4 years.

On Nov 30, OPEC+ agreed to cut crude production by -1.0 million bpd through June 2024.  However, a Bloomberg survey on Thursday showed the group cut production by -490,000 bpd in January, below the agreed-upon -1.0 million bpd cut.  Meanwhile, on Dec 21, Angola announced it was leaving OPEC amid a dispute over oil production quotas.

Saudi Arabia said on Nov 30 that it would maintain its unilateral crude production cut of 1.0 million bpd through Q1-2024.  The move would maintain Saudi Arabia’s crude output at about 9 million bpd, the lowest level in three years.  Russia also said it will deepen its voluntary oil export cuts by 200,000 bpd to 500,000 bpd in Q1 of 2024.  OPEC Jan crude production fell -1.59 million bpd to 26.570 million bpd, a 2-1/2 year low.

Wednesday’s weekly EIA report showed that (1) U.S. crude oil inventories as of Jan 26 were -5.1% below the seasonal 5-year average, (2) gasoline inventories were +1.2 above the seasonal 5-year average, and (3) distillate inventories were -5.1% below the 5-year seasonal average.  U.S. crude oil production in the week ended Jan 26 rose +5.7% w/w to 13.0 million bpd, modestly below the recent record high of 13.3 million bpd.

Baker Hughes reported Friday that active U.S. oil rigs in the week ended Feb 2 were unchanged at 499 rigs, just above the 2-year low of 494 rigs from Nov 10.  The number of U.S. oil rigs has fallen over the past year from the 3-3/4 year high of 627 rigs posted in December 2022.

March Nymex natural gas (NGH24) on Friday closed +0.029 (+1.41%).

Nat-gas prices Friday recovered from a 9-month nearest-futures low and closed moderately higher.  Fund short covering emerged in nat-gas futures Friday when prices failed to break below $2 MMBtu, a significant support level.   Nat-gas prices have sold off sharply over the past three weeks as unseasonably warm U.S. temperatures have reduced heating demand for nat-gas.  Forecaster Maxar Technologies said Friday that the eastern half of the U.S. is seeing forecasts trend warmer for February 7 to 11.

Nat-gas prices are also under pressure after the Freeport LNG nat-gas export terminal in Texas announced last Friday that it is shutting one of its three production units for a month for repairs after extreme cold in Texas damaged equipment.  The closure of one of the units will limit U.S. nat-gas exports and increase U.S. nat-gas supplies.

Lower-48 state dry gas production Friday was 104.7 bcf/day (+9.3% y/y), according to BNEF.  Lower-48 state gas demand Friday was 89.9 bcf/day (-20% y/y), according to BNEF.  LNG net flows to U.S. LNG export terminals Friday were 13.8 bcf/day (+2.8% w/w), according to BNEF.

The U.S. Climate Prediction Center said there is a greater than 55% chance the current El Nino weather pattern will remain strong in the Northern Hemisphere through March, keeping temperatures above average and weighing on nat-gas prices.  AccuWeather said El Nino will limit snowfall across Canada this season in addition to causing above-normal temperatures across North America.

An increase in U.S. electricity output is positive for nat-gas demand from utility providers.  The Edison Electric Institute reported Wednesday that total U.S. electricity output in the week ended January 27 rose +1.0% y/y to 80,177 GWh (gigawatt hours), although cumulative U.S. electricity output in the 52-week period ending January 27 fell -0.3% y/y to 4,105,901 GWh.

Thursday’s weekly EIA report was bearish for nat-gas prices as nat-gas inventories for the week ended January 26 fell -197 bcf, a smaller draw than expectations of -203 bcf but above the 5-year average draw of -185 bcf.  As of January 26, nat-gas inventories were up +2.9% y/y and were +5.1% above their 5-year seasonal average, signaling ample nat-gas supplies.  In Europe, gas storage was 71% full as of January 29, above the 5-year seasonal average of 58% full for this time of year.

Baker Hughes reported Friday that the number of active U.S. nat-gas drilling rigs in the week ending February 2 fell -2 rigs to 117 rigs, just above the 2-year low of 113 rigs posted September 8.  Active rigs have fallen back since climbing to a 4-1/2 year high of 166 rigs in Sep 2022 from the pandemic-era record low of 68 rigs posted in July 2020 (data since 1987).

Published: 2/2/2024 5:01 AM ET | 

Gold held steady on Friday after climbing in the previous session on weak U.S. labor market data.

Spot gold was marginally lower at $2,054.28 per ounce, while U.S. gold futures were virtually unchanged at $2,071.10.

Gold prices were poised for their biggest weekly gain in nine weeks as the dollar softened, and bond yields dipped on weak U.S. labor market data.

U.S. jobless claims rose last week, and fourth quarter unit labor costs undershoot forecasts while business activity in the manufacturing sector continued to contract in January, separate reports showed on Thursday.

Despite the Fed’s hawkish tone, economists continue to believe it is a matter of “when, not if” the U.S. central bank will eventually lower rates.

By RTTNews Staff Writer   ✉  | Published: 2/2/2024 5:01 AM ET | 

Gold held steady on Friday after climbing in the previous session on weak U.S. labor market data.

Spot gold was marginally lower at $2,054.28 per ounce, while U.S. gold futures were virtually unchanged at $2,071.10.

Gold prices were poised for their biggest weekly gain in nine weeks as the dollar softened, and bond yields dipped on weak U.S. labor market data.

U.S. jobless claims rose last week, and fourth quarter unit labor costs undershoot forecasts while business activity in the manufacturing sector continued to contract in January, separate reports showed on Thursday.

Despite the Fed’s hawkish tone, economists continue to believe it is a matter of “when, not if” the U.S. central bank will eventually lower rates.

read moreRTTNews1yNew York AG Warns Crypto Investors Against RiskyCrypto InvestmentsTop Biotech IPOs Of 2021 That Soared As Much As 500%-Share Story FacebookLinkedInTwitterTelegramWhatsAppCopyAboutLogin

CME Group’s FedWatch Tool currently indicates a relatively modest 37.5 percent chance of a March rate cut but a nearly 100 percent chance rates will be lower by early May.

The Labour Department is scheduled to release its more closely watched report on January employment later in the day.

Economists expect employment to increase by 180,000 jobs in January after an increase of 216,000 jobs in December.

The unemployment rate is expected to inch up to 3.8 percent from 3.7 percent.
U.S. University of Michigan’s consumer sentiment results for January and factory orders figures for December are also awaited.

| Published: 2/2/2024 4:49 AM ET | 

Oil ticked higher on Friday but headed for its biggest weekly loss since early November after reports that Hamas and Israel have come to an agreement on a ceasefire, a crucial step toward ending the conflict.

Benchmark Brent crude futures rose 0.4 percent to $79.04 per barrel, while WTI crude futures were up 0.4 percent at $74.14.

Traders closely watched the developments regarding negotiations of a cease-fire in the Israel-Hamas war.

The Gaza ruling group Hamas has finally given ‘greenlighted’ the ceasefire proposal and release of Israeli hostages, but talks are still in the early stages.

A weaker dollar lent some support to oil prices ahead of the all-important U.S. jobs report due later in the day.

Traders were also reacting to the OPEC+ decision to keep its oil output policy unchanged.

At an online review meeting on Thursday, the oil cartel signaled that it would maintain output cuts for the first quarter to avert a surplus amid easing global demand.

OPEC reaffirmed its “readiness to take additional measures at any time,” according to the Joint Ministerial Monitoring Committee, which will meet again on April 3.

Published: 2/1/2024 6:43 PM ET | 

The Canadian market shrugged off early weakness and ended on a firm note on Thursday, led by gains in materials, industrials, consumer sectors.

The benchmark S&P/TSX Composite Index ended with a gain of 97.33 points or 0.46% at 21,119.21. The index climbed to 21,189.26 in early trades, but dropped to 20,980.93 around late morning, but recovered gradually as the session progressed to eventually close well above the flat line.

Aritzia Inc (ATZ.TO) rallied 7.3%. Cameco Corporation (CCO.TO) and Sprott Inc (SII.TO) climbed 5.4% and 5%, respectively. Nutrien (NTR.TO) ended stronger by 3.8%.

Boyd Group Services (BYD.TO), Canadian Pacific Kansas City (CP.TO) and CGI Inc (GIB.A.TO) gained 2.4 to 3%. Franco-Nevada Corporation (FNV.TO), Canadian National Railway (CNR.TO), Thomson Reuters Corporation (TRI.TO), Waste Connections (WCN.TO), WSP Global (WSP.TO) and FirstService Corporation (FSV.TO) advanced 1 to 2%.

Shopify Inc (SHOP.TO) ended more than 4.5% down. MEG Energy Corp (MEG.TO), Westshore Terminals (WTF.TO), Tecsys Inc (TCS.TO) and Precision Drilling Corporation (PD.TO) declined 3.7%, 3.3% and 2.5%, respectively.

Canadian Natural Resources (CNQ.TO), Imperial Oil (IMO.TO), TFI International (TFII.TO) and Brookfield Corporation (BN.TO) also ended notably lower.

Rogers Communications Inc. (RCI.A.TO) gained 1.1%. The company reported adjusted net income of C$630 million for the quarter ended December 31, 2023, compared to adjusted net income of $554 million in the corresponding quarter of the previous year. The company announced that its Board of Directors declared a quarterly dividend totaling 50 cents per share on each of its outstanding Class B Non-Voting shares (“Class B Shares”) and Class A Voting shares.

Canada Goose Holdings Inc. (GOOS.TO) soared nearly 8% after reporting adjusted net income of $138.6 million or $1.37 per diluted share for the third-quarter, compared with an adjusted net income of $134.5 million or $1.27 per diluted share in the prior year period.

Real Matters Inc. (REAL.TO) tumbled 7%. The company reported first-quarter net loss of $3.6 million compared with a net loss of $4.6 million in the first quarter of the previous financial year.

On the economic front, a report from S&P Global showed an improvement in Canadian manufacturing activity. The S&P Global Canada Manufacturing PMI improved to 48.3 in January from 45.4 in the preivous month, marking the slowest contraction since October.

• Apple is facing renewed challenges in China, one of its most critical markets.
• Cautious consumer sentiment combined with intense competition, in particular from a rejuvenated Huawei, is posing a challenge to Apple.
• Other domestic brands from Xiaomi to Oppo have been slowly pushing into the high-end market but at cheaper prices, also challenging Apple.

Apple’s biggest issues in China right now after sales plunged (cnbc.com)

• Meta shares jumped on Friday after profit tripled in the fourth quarter and the company issued its first-ever dividend.
• Revenue rose 25% in the quarter for Meta, marking the fastest rate of growth for any period since mid-2021 as the online ad market rebounded.
• Investors praised Meta’s decision to issue a dividend, a rare step for a high-growth technology company.

Meta shares surge 20% on soaring profit, guidance and first dividend (cnbc.com)

Here’s where the jobs are for January 2024 — in one chart (cnbc.com)