Category: Uncategorized

 Published: 1/15/2024 4:38 PM ET | 

The Canadian market ended on a firm note on Monday, as stocks shrugged off a slightly weak start and moved higher in cautious trade.

Shares from utilities, energy, healthcare, communications and consumer staples sectors posted gains, contributing to the market’s uptick.

With the U.S. market closed for Martin Luther King Jr. Day, and Canadian inflation data due later in the week, the mood remained cautious.

The benchmark S&P/TSX Composite Index, which dropped to 20,932.47 earlier in the session, ended with a gain of 71.66 points or 0.34% at 21,061.88.

Healthcare stocks Tilray Inc (TLRY.TO) and Chartwell Retirement Residences (CSH.UN.TO) gained 3.5% and 1.35%, respectively. Sienna Senior Living Inc (SIA.TO) advanced nearly 1%.

In the utilities sector, Capital Power Corp (CPX.TO) gained 3.25%. Brookfield Renewable Partners (BEP.UN.TO), Transalta Corp (TA.TO) and Northland Power (NPI.TO) moved up 2 to 2.5%.

Energy stocks Athabasca Oil Corp (ATH.TO), MEG Energy (MEG.TO) and Arc Resources (ARX.TO) gained 4.8%, 3.2% and 2.9%, respectively.

By RTTNews Staff Writer   ✉  | Published: 1/15/2024 4:38 PM ET | 

The Canadian market ended on a firm note on Monday, as stocks shrugged off a slightly weak start and moved higher in cautious trade.

Shares from utilities, energy, healthcare, communications and consumer staples sectors posted gains, contributing to the market’s uptick.

With the U.S. market closed for Martin Luther King Jr. Day, and Canadian inflation data due later in the week, the mood remained cautious.

The benchmark S&P/TSX Composite Index, which dropped to 20,932.47 earlier in the session, ended with a gain of 71.66 points or 0.34% at 21,061.88.

Healthcare stocks Tilray Inc (TLRY.TO) and Chartwell Retirement Residences (CSH.UN.TO) gained 3.5% and 1.35%, respectively. Sienna Senior Living Inc (SIA.TO) advanced nearly 1%.

In the utilities sector, Capital Power Corp (CPX.TO) gained 3.25%. Brookfield Renewable Partners (BEP.UN.TO), Transalta Corp (TA.TO) and Northland Power (NPI.TO) moved up 2 to 2.5%.

Energy stocks Athabasca Oil Corp (ATH.TO), MEG Energy (MEG.TO) and Arc Resources (ARX.TO) gained 4.8%, 3.2% and 2.9%, respectively.

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Communications shares Telus Corp (T.TO) and BCE Inc (BCE.TO) ended higher by 1.35% and 1.2%, respectively.

Consumer staples stocks Saputo Inc (SAP.TO) and Loblaw Co (L.TO) climbed about 1.6% and 1.5%, respectively. Empire Company (EMP.TO) gained 1%.

On the economic front, data from Statistics Canada showed Canada’s manufacturing sales rose by 1.2% from a month earlier to C$ 71.7 billion in November, matching the preliminary estimate, after seeing a 2.9% drop in October. On a yearly basis, total sales were down 0.8% in November.

Wholesale sales in Canada increased 0.9% (m-o-m) to C$82.5 billion in November, rebounding from a 0.5% decline in the previous month.

A separate data from Statistics Canada showed car registrations in Canada decreased to 143,723 units in November from 151,144 units in October.

Published: 1/12/2024 2:40 PM ET | 

Gold prices rose sharply on Friday amid an escalation in geopolitical tensions after the United States and the United Kingdom launched air strikes against military targets in Houthi-controlled areas of Yemen.

The rebel militants were using the areas to attack commercial vessels in one of the world’s most vital waterways.

The producer price inflation data, and the drop in yields of the US 10-year Treasury Note contributed as well to the surge in bullion prices.

Investors also digested mixed comments from Federal Reserve officials on the possibility of rate cuts this year.

Gold futures for February ended higher by $32.40 at $2,051.60 an ounce.

Silver futures for March ended up $0.624 at $23.329 an ounce, while Copper futures for March settled at $3.7405 per pound, down $0.0360 from the previous close.

“Gold was boosted by the PPI data and the US 10-year yields tumbling well below 4%, while the 2-year hit an 8-month low. The yellow metal has been struggling over the last couple of weeks and the jobs report and CPI data did little to revitalize it. The PPI appears to have done just that though, although it still has some way to go to reach the new highs reached in early December,” says Craig Erlam, Senior Market Analyst at OANDA, UK & EMEA.

Data from the Labor Department showed the producer price index for final demand slipped by 0.1% in December, matching a revised dip in November. Economists had expected producer prices to inch up by 0.1% compared to the unchanged reading originally reported for the previous month.

Meanwhile, the report said the annual rate of producer price growth accelerated to 1% in December from a downwardly revised 0.8% in November. The annual rate of producer price growth was expected to speed up to 1.3% from the 0.9% originally reported for the previous month.

Monday January 15

U.S. markets closed (Martin Luther King Jr. Day)

Japan machine tool orders

Euro zone industrial production and trade surplus

(8:30 a.m. ET) Canadian manufacturing sales and orders for November. Estimates are month-over-month increases of 1.0 per cent and 1.1 per cent, respectively.

(8:30 a.m. ET) Canadian wholesale trade for November. Estimate is up 0.8 per cent from November.

(9 a.m. ET) Canadian existing home sales for December. Estimate is a year-over-year rise of 5.5 per cent with average prices up 5.0 per cent.

(9 a.m. ET) Canada’s MLS Home Price Index for December. Estimate is a gain of 1.0 per cent from the same period a year ago.

(10:30 a.m. ET) Bank of Canada’s Business Outlook Survey and Survey of Consumer Expectations for Q4.

—

Tuesday January 16

Euro zone 3-year inflation expectations

Germany CPI

(8:15 a.m. ET) Canadian housing starts for December. Estimate is an annualized rate increase of 17.6 per cent.

(8:30 a.m. ET) Canadian CPI for December. The Street is projecting a decline of 0.3 per cent from November but a rise of 3.4 per cent year-over-year.

Earnings include: Goldman Sachs Group Inc.; Morgan Stanley; PNC Financial Services Group Inc.

—

Wednesday January 17

China real GDP, industrial production, retail sales and fixed asset investment

Euro zone and U.K. CPI

(8:30 a.m. ET) Canada’s industrial product and raw materials price indexes for December. Estimates are month-over-month declines of 1.0 per cent and 2.5 per cent, respectively.

(8:30 a.m. ET) Canadian international securities transactions for November.

(8:30 a.m. ET) U.S. retail sales for December. The Street is estimating an increase of 0.4 per cent from November (or 0.2 per cent excluding automobiles_

(8:30 a.m. ET) U.S. import prices for December. Consensus is a drop of 0.6 per cent from November and a 2.1-per-cent year-over-year slide.

(9:15 a.m. ET) U.S. industrial production for December. The consensus is a decline of 0.1 per cent from November with capacity utilization rising 0.1 per cent to 78.8 per cent.

(10 a.m. ET) U.S. NAHB Housing Index for January.

(10 a.m. ET) U.S. business inventories for November.

(2 p.m. ET) U.S. Beige Book is released.

Earnings include: Alcoa Corp.; Charles Schwab Corp.; Discover Financial Services; Kinder Morgan Inc.; Prologis Inc.; U.S. Bancorp.

—

Thursday January 18

Japan core machine orders and industrial production

(8:30 a.m. ET) Canadian construction investment for November.

(8:30 a.m. ET) U.S. initial jobless claims for week of Jan. 13. Estimate is 207,000, up 5,000 from the previous week.

(8:30 a.m. ET) U.S. housing starts for December. Consensus is an annualized rate decline of 8.7 per cent.

(8:30 a.m. ET) U.S. building permits for December. The Street expects a rise of 0.9 per cent on an annualized rate basis.

(8:30 a.m. ET) U.S. Philadelphia Fed Index for January.

Earnings include: Fastenal Co.; M&T Bank Corp.; PPG Industries Inc.; Richelieu Hardware Ltd.; Taiwan Semiconductor Manufacturing; Truist Financial Corp.

—

Friday January 19

Japan CPI

Germany PPI

(8:30 a.m. ET) Canadian retail sales for November. The Street is expected a flat month-over-month.

(8:30 a.m. ET) Canadian household and mortgage credit for November.

(8:30 a.m. ET) Canada’s new housing price index for December. Estimate is unchanged from November and down 0.9 per cent year-over-year.

(10 a.m. ET) U.S. existing home sales for December. Consensus is an annualized rate rise of 0.3 per cent.

(10 a.m. ET) U.S. University of Michigan consumer sentiment index for January (preliminary reading).

Earnings include: Fifth Third Bancorp.; Schlumberger NV; Travelers Companies Inc.

Suncor Energy Inc. says its upstream production in the fourth quarter was 808,000 barrels per day, the second highest quarter in the company’s history.

The Calgary-based company says the performance for the last three months of the year resulted in annual average upstream production of 746,000 bbls/d for 2023.

Suncor says net synthetic crude oil production was 476,000 bbls/d and net non-upgraded bitumen production was 282,000 bbls/d resulting in total oilsands production of 758,000 bbls/d for the quarter.

Total production from its exploration and production operations was 50,000 bbls/d in the fourth quarter including production from the ramp up at Terra Nova.

Suncor says its downstream operations posted average refining utilization of 97 per cent in the fourth quarter.

The company is scheduled to release its fourth-quarter financial and operating results on Feb. 21.

This report by The Canadian Press was first published Jan. 3, 2024.

February Nymex natural gas (NGG24) on Friday closed +0.216 (+6.97%).

Nat-gas prices on Friday rallied sharply and are just below Tuesday’s 2-month high.  NatGasWeather predicts that an arctic air mass will “advance aggressively across the U.S. this weekend and next week,” bringing cold weather across the northern part of the U.S. and the South, including Texas, thus boosting heating demand for nat-gas.  

Lower-48 state dry gas production Friday was 102.7 bcf/day (+2.0% y/y), according to BNEF.  Lower-48 state gas demand Friday was 102.8 bcf/day (+18.6% y/y), according to BNEF.  LNG net flows to U.S. LNG export terminals Frirday were 15.1 bcf/day (+1.2% 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 6 rose +9.0% y/y to 79,691 GWh (gigawatt hours), although cumulative U.S. electricity output in the 52-week period ending January 6 fell -1.2% y/y to 4,082,730 GWh.

Thursday’s weekly EIA report was bullish for nat-gas prices as nat-gas inventories for the week ended January 5 fell -140 bcf, a larger draw than expectations of -121 bcf and well above the 5-year average draw of -89 bcf.  As of January 5, nat-gas inventories were up +15.0% y/y and were +11.6% above their 5-year seasonal average, signaling ample nat-gas supplies.  In Europe, gas storage was 84% full as of January 7, above the 5-year seasonal average of 71% 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 January 12 fell -1 rig 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).
 

ebruary WTI crude oil (CLG24) on Friday closed up +0.66 (+0.92%), and Feb RBOB gasoline (RBG24) closed up +0.60 (+0.28%).

Crude oil and gasoline prices Friday climbed to 2-week highs and settled moderately higher.  Crude prices rose on an escalation of geopolitical risks in the Middle East after the U.S. and its allies launched airstrikes against Houthi rebels in Yemen, retaliating for attacks on commercial ships in the Red Sea.   Late Thursday, President Biden said air strikes had been conducted against a number of targets in Yemen for attacking ships in the Red Sea.  In response, the Houthis said all U.S. and UK shipping interests are now legitimate targets for attacks.

Crude prices fell back from their best levels after a recovery in the dollar (DXY00) sparked long liquidation in energy futures.

The increased number of hostile incidents in the Red Sea against commercial shipping is bullish for oil prices.  The 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 oil prices have support from tighter global crude supplies after Libya’s National Oil Corporation on Sunday declared force majeure at its Sharara oil field that was shut down last Wednesday after protestors entered the facility.  The Sharara oil field is Libya’s largest and pumps about 300,000 bpd.

A decrease 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 3.34 million bpd in the four weeks to Jan 7, down -120,000 bpd from the prior week.

A bearish factor for crude was Monday’s action by Saudi state oil producer Saudi Aramco to cut the official selling price of its Arab Light crude by -$2.00 to $1.50 per barrel above the benchmark for customers for February delivery, a larger cut than expectations of -$1.25 a barrel and the lowest in more than two years.

An increase in crude in floating storage is bearish 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 -2.1% w/w to 83.69 million bbl as of Jan 5.

A bearish factor for crude was the announcement from Angola on Dec 21 that it is leaving OPEC amid a dispute over oil production quotas.  Angola is Africa’s second-largest crude producer, and the rift between Angola and other OPEC+ members is a bearish factor that signals infighting among members.  Other OPEC members may balk at Saudi Arabia’s attempt to force all members into a production cut.

On Nov 30, OPEC+ agreed to cut crude production by -1.0 million bpd through June 2024.  However, crude prices sold off on the news since no details were provided on how the cuts would be distributed among members, nor how Russia’s -300,000 bpd export cut would factor into the new totals.  Delegates said the final details of the new accord, including national production levels, would be announced individually by each country rather than in the customary OPEC+ communique.  The market was disappointed that the extra cuts in OPEC crude output will be announced by each individual country, which suggests the reductions are only voluntary.

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 Dec crude production fell -40,000 bpd to 28.050 million bpd.

Wednesday’s EIA report showed that (1) U.S. crude oil inventories as of Jan 5 were -2.1% below the seasonal 5-year average, (2) gasoline inventories were +1.4 above the seasonal 5-year average, and (3) distillate inventories were -3.3% below the 5-year seasonal average.  U.S. crude oil production in the week ended Jan 5 was unchanged w/w at 13.2 million bpd, just below the recent record of 13.3 million bpd.

Baker Hughes reported Friday that active U.S. oil rigs in the week ended Jan 12 fell by -2 rigs to 499 rigs, just above the 2-year low of 494 rigs from Nov 10.  The number of U.S. oil rigs in the past year has fallen from the 3-3/4 year high of 627 rigs posted in December 2022.
 

Canadian bank CEOs expect to put more money aside for potential bad loans this year but still see borrowers overall managing well through higher interest rates.

RBC chief executive Dave McKay, speaking at the bank’s CEO conference, says he expects to see credit loss provisions peak this year as parts of the commercial side of lending remain strained.

He says that borrowers on the mortgage side are having to adapt to higher payments with an average $400 a month on average for its clients renewing this year, but that higher wages along with savings are helping to soften the impact.

McKay says he expects 2024 to be a little worse on a number of fronts, especially commercial real estate in the U.S., some multi-family residential markets, capital markets and some on the unsecured consumer lending side.

Scotiabank chief executive Scott Thomson says the bank also expects higher provisions for bad loans, but sees a more steady path this year after 2023’s restructuring efforts.

Thomson says the bank’s markets in Latin America are already seeing rates fall to help reduce risk and provide a tailwind on loan loss provisions.

This report by The Canadian Press was first published Jan. 9, 2024.

Toronto-Dominion Bank TD-T executives knew about an anti-money-laundering probe by the U.S. Department of Justice more than six months before the company publicly disclosed the investigation that derailed its acquisition of Tennessee-based First Horizon Bank FHN-N, according to a report from The Capitol Forum.

The Capitol Forum’s story citing anonymous sources was published late Monday as details also emerged about a legal case filed last year against a former TD employee in New Jersey charged with helping launder millions of dollars in illegal drug sales since early 2022.

TD’s share price tumbled 4.4 per cent Tuesday, posting steeper losses than the S&P/TSX Composite Banks Index’s 1.6-per-cent drop and the 1.1 per cent slump at the KBW Bank Index, which tracks major U.S. lenders. In part, the stock price also fell because Tuesday was TD’s ex-dividend date, when the stock trades without its next dividend payment.

Canada’s second largest lender announced the First Horizon acquisition in February 2022. In November that same year, the TD’s executives were aware that multiple federal law enforcement agencies had found failures in the anti-money-laundering processes so significant that the deal was at risk of being rejected by U.S. regulators, according to the Capitol Forum report.

Opinion: TD Bank, once the sector’s gold standard, is losing its lustre — and Bay Street is starting to wonder why

Since TD’s acquisition of First Horizon Corp. was terminated in May, investors have been waiting for details on the regulatory issues that scuttled the transaction. In August, TD disclosed in its third-quarter earnings results that it expected fines or other penalties stemming from probes by regulators and law-enforcement agencies, including the Department of Justice, related to its anti-money-laundering practices.

The bank also faces a lawsuit from certain First Horizon shareholders, accusing TD’s executives of making misleading statements and omissions about the deal.

“TD has rigorous processes in place to ensure disclosure of information consistent with our disclosure and contractual obligations,” TD spokesperson Lisa Hodgins said in an e-mailed statement. “Our public statements updated the market as matters evolved. At all times, TD acts in the best interests of the bank and our shareholders.”

In the Department of Justice case, former branch employee Oscar Marcelo Nunez-Flores was charged in October with allegedly helping create shell companies and issuing dozens of debit cards, allowing individuals in Colombia to withdraw laundered money.

Investigators allege in a court filing that Mr. Nunez accepted bribes to give people online access to the accounts, along with dozens of debit cards that were used to withdraw cash from ATMs in Colombia. He allegedly received thousands of dollars in bribes for each account he opened. The probe found that millions of dollars were laundered to Colombia through accounts opened by Mr. Nunez since early 2022.

“As alleged, Nunez corruptly exploited his position inside a bank to help launder millions of dollars in drug money in exchange for bribes,” U.S. Attorney Philip R. Sellinger said in a statement in October. “Today’s arrest shows that my office will expose and prosecute those who abuse positions of trust and seek to corrupt our financial institutions.”

The allegations against Mr. Nunez haven’t been proven in court. It is not known whether the case is related to the anti-money-laundering investigation disclosed in August.

“In respect of the recent charges of a TD branch employee in New Jersey, TD is cooperating fully with the law enforcement and this employee has been terminated,” Ms. Hodgins said.

The U.S. Internal Revenue Service (IRS) was also involved in the investigation.

“IRS Criminal Investigation and our law enforcement partners will continue to work together to hold accountable and disrupt bad actors like the defendant, who allegedly accepted bribes to facilitate millions of dollars of money laundering,” IRS Criminal Investigation special agent Tammy Tomlins said in a statement in October. “We are committed to protecting the integrity of our financial institutions by investigating and prosecuting individuals involved in financial crimes.”

In relation to the undisclosed anti-money-laundering issues related to the U.S. Department of Justice investigation, analyst have estimated that the penalty could range between US$500-million and US$1-billion.

Depending on the severity of the infractions, fines could far exceed those estimates. In 2012, HSBC paid about US$2-billion to settle charges connected to illegal drug money laundering.

 Published: 1/12/2024 5:32 PM ET | 

Despite coming off early highs, the Canadian market ended on a positive note on Friday, lifted by gains in technology, materials and energy sectors.

Investors digested U.S. producer price inflation data, and earnings updates from some major U.S. banks.

The benchmark S&P/TSX Composite Index, which climbed to 21,140.88 in early trades, ended the session with a gain of 71.82 points or 0.34% at 20,990.22. The index gained 0.25% in the week.

Iamgold Corp (IMG.TO), up 10.5%. was the top gainer in the materials index. Centerra Gold (CG.TO) climbed 7.3%, while Orla Mining (OLA.TO), Oceanagold (OGC.TO), First Majestic Silver Corp (FR.TO), Osisko Mining (OSK.TO), Pan American Silver Corp (PAAS.TO), Wesdome Gold Mines (WDO.TO), Fortuna Silver (FVI.TO), Eldorado Gold (ELD.TO) and Torex Gold Resources (TXG.TO) gained 4.8 to 7%.

Technology stocks Enghouse Systems (ENGH.TO), Tecsys Inc (TCS.TO), Kinaxis Inc (KXS.TO), Constellation Software (CSU.TO), Computer Modelling Group (CMG.TO) and Alithya Group (ALYA.TO) advanced 2 to 3.1%.

Energy stocks Advantage Oil & Gas (AAV.TO), Birchcliff Energy (BIR.TO), Shawcor (MATR.TO), International Petroleum Corp (IPCO.TO), Parex Resources (PXT.TO), Africa Oil Corp (AOI.TO) and Arc Resources (ARX.TO) gained 3 to 5%.

Industrial stocks Richelieu Hardware (RCH.TO) and Cargojet (CJT.TO) climbed 4% and 3.8%, respectively. Ballard Power Systems (BLDP.TO) gained 3.1%, Finning International (FTT.TO) and TFI International (TFII.TO) both gained about 2%, and Ats Corp (ATS.TO) advanced nearly 2%.