Category: Uncategorized

Monday March 6

China trade surplus and foreign reserves

Euro zone retail sales

(10 a.m. ET) U.S. factory orders for January. The Street is forecasting a month-over-month drop of 1.8 per cent.

Earnings include: Cargojet Inc.; Element Fleet Management Corp.; Wajax Corp.

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Tuesday March 7

Germany factory orders

(10 a.m. ET) U.S. wholesale inventories for January.

(10 a.m. ET) U.S. Fed Chair Jerome Powell testifies to the Senate Banking Committee.

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

Also: Manitoba budget

Earnings include: Ag Growth International Inc.; Ero Copper Corp.; InterRent REIT; Labrador Iron Ore Royalty Corp.; Pet Valu Holdings Ltd.

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Wednesday March 8

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

Japan current account deficit and bank lending

Euro zone real GDP

Germany retail sales and industrial production

(8:15 a.m. ET) U.S. ADP National Employment Report for February. Consensus is an increase of 200,000 jobs from January.

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

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

(10 a.m. ET) Bank of Canada policy announcement

(10 a.m. ET) U.S. Job Openings and Labor Turnover Survey for January.

(10 a.m. ET) U.S. Fed Chair Jerome Powell testifies to the House Financial Services Committee.

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

Earnings include: Granite REIT; Linamar Corp.; Nuvei Corp.; NuVista Energy Ltd.; Parex Resources Inc.; Peyto Exploration & Development Corp.; Spin Master Corp.; Stella-Jones Inc.; Transcontinental Inc.; Vermilion Energy Inc.; WSP Global Inc.

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Thursday March 9

China CPI and PPI

Japan GDP and machine tool orders

Bank of Japan monetary policy meeting (through Friday)

(8:30 a.m. ET) U.S. initial jobless claims for week of March 4. Estimate is 195,000, up 5,000 from the previous week.

(12 p.m. ET) U.S. flow of funds for Q4.

(1:30 p.m. ET) Bank of Canada Senior Deputy Governor Carolyn Rogers presents the Economic Progress Report to Manitoba Chambers in Winnipeg.

Earnings include: Docebo Inc.; Endeavour Mining Corp.; Enghouse Systems Ltd.; Maple Leaf Foods Inc.; Northwest Healthcare Properties REIT; Paramount Resources Ltd.; Spartan Delta Corp.; Wheaton Precious Metals Corp.

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Friday March 10

Japan household spending

Germany CPI

(8:30 a.m. ET) Canadian employment for February. The Street expects an addition of 2,500 jobs from January with the unemployment rate at 5.1 per cent. The January report showed surprising job gains of 150,000 from December. Average hourly wage are expected to be up 5 per cent from a year ago.

(8:30 a.m. ET) Canada’s capacity utilization for Q4.

(8:30 a.m. ET) U.S. nonfarm payrolls for February. The consensus is the addition of 220,000 jobs with the unemployment rate remaining 3.4 per cent.

(2 p.m. ET) U.S. budget balance for February.

Earnings include: Energy Fuels Inc.

• Amid a gradually growing rift between longtime close allies Saudi Arabia and the UAE, the latter is now debating withdrawing from OPEC, the Wall Street Journal reported, citing unnamed Emirati officials.
• This would have a significant impact on the oil producer group’s global clout, as well as allow the UAE to pursue its own oil production plans that suit its interests.

https://www.cnbc.com/2023/03/03/oil-prices-volatile-on-report-uae-is-considering-leaving-opec.html

The Toronto-Dominion Bank (TD) on Thursday reported fiscal first-quarter net income of $1.17 billion.

The company said it had earnings of 61 cents per share. Earnings, adjusted for non-recurring costs, were $1.64 per share.

The results topped Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of $1.61 per share.

The retail and wholesale bank posted revenue of $16.61 billion in the period. Its revenue net of interest expense was $9.01 billion, also exceeding Street forecasts.

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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 TD at https://www.zacks.com/ap/TD

Canadian Natural Resources Ltd. (CNQ) on Thursday reported fourth-quarter earnings of $1.12 billion.

On a per-share basis, the Calgary Alberta Canada, Alberta-based company said it had net income of $1. Earnings, adjusted for non-recurring costs, came to $1.44 per share.

The results did not meet Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for earnings of $1.61 per share.

The oil and natural gas company posted revenue of $8.11 billion in the period. Its adjusted revenue was $7.14 billion, exceeding Street forecasts. Three analysts surveyed by Zacks expected $7.04 billion.

For the year, the company reported profit of $8.41 billion, or $7.32 per share. Revenue was reported as $32.54 billion.

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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 CNQ at https://www.zacks.com/ap/CNQ

 Crescent Point Energy Corp. (CPG) on Thursday reported a fourth-quarter loss of $366.9 million, after reporting a profit in the same period a year earlier.

On a per-share basis, the Calgary, Alberta-based company said it had a loss of 66 cents. Earnings, adjusted for non-recurring costs, came to 28 cents per share.

The oil producer posted revenue of $748.9 million in the period.

For the year, the company reported profit of $1.14 billion, or $2 per share. Revenue was reported as $3.46 billion.

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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 CPG at https://www.zacks.com/ap/CPG

CALGARY, AB, Mar. 1, 2023 /CNW/ – Tourmaline Oil Corp. (TSX:TOU.TO) (“Tourmaline” or the “Company”) is pleased to release financial and operating results for the full year and fourth quarter of 2022, as well as 2022 reserves.

Read more at newswire.ca

HIGHLIGHTS

• Full-year 2022 cash flow⁽¹⁾ (“CF”) was a record $4.9 billion ($14.26 per diluted share⁽²⁾) up 67% over 2021. Fourth quarter 2022 CF was $1.4 billion ($4.08 per diluted share).
  
• Tourmaline generated a record $3.2 billion of free cash flow⁽³⁾ (“FCF”) in 2022.
  
• Full-year 2022 after tax net earnings were $4.5 billion ($13.10 per diluted share).
  
• Tourmaline paid $7.90/share in base and special dividends to shareholders in 2022, a 12% trailing yield⁽⁴⁾ based on an average 2022 share price of $66.94.
  
• Tourmaline’s proved plus probable (“2P”) reserve value per diluted share⁽⁵⁾⁽⁶⁾ before tax is $143 ($109 after tax) using the January 1, 2023 engineering price deck and a 10% discount rate. Total proved (“TP”) and proved, developed producing (“PDP”) reserve values per diluted share are $97 and $54 before tax, respectively ($75 and $44 after tax, respectively) using the same pricing and discount rates.
  
• Full-year 2022 average production of 500,832 boepd was up 14% over 2021 average production of 441,115 boepd.
  
• Current production is ranging between 520,000-530,000 boepd, consistent with the expected first quarter average.
  
• At current strip pricing⁽⁷⁾, the Company expects to generate 2023 cash flow of $3.8 billion ($11.12 per diluted share) and free cash flow of $2.0 billion ($5.72 per diluted share) on unchanged EP capital expenditures⁽⁸⁾ of $1.675 billion (as per January 12, 2023 news release). Based on a current share price of $60, Tourmaline is trading at an approximate 10% free cash flow yield⁽⁹⁾.
  
• Exit 2022 net debt⁽¹⁰⁾ was $494 million (0.1 times Q4 2022 annualized cash flow) and well below the Company’s long-term net debt target of $1.0-1.2 billion.
  
• Year-end 2022 PDP reserves of 1.001 billion boe were up 25%, TP reserves of 2.32 billion boe were up 14% and 2P reserves of 4.50 billion boe were up 10% over year-end 2021, after including 2022 annual production of 183 million boe.
  
• Tourmaline replaced 240% of its 2022 annual production of 183 million boe with 2P additions of 440 million boe including 2022 production, with 88% of the addition from the organic EP program.
  
• After 14 years of operations, Tourmaline now has 20.7 Tcf of 2P natural gas reserves, the largest in Canada and one of the largest, lowest development cost, lowest emission natural gas reserve bases in North America.
  
• In January 2023, Tourmaline began delivering gas to the US Gulf Coast, becoming the first Canadian EP company participating in the LNG business with full exposure to JKM (Japan Korea Marker) pricing.

George Weston Ltd. (WNGRF) on Wednesday reported a loss of $76.6 million in its fourth quarter.

On a per-share basis, the Toronto-based company said it had a loss of 61 cents. Earnings, adjusted for non-recurring costs, came to $1.91 per share.

The baked goods maker and parent of the conglomerate Loblaw posted revenue of $10.42 billion in the period.

For the year, the company reported profit of $1.4 billion, or $9.35 per share. Revenue was reported as $43.88 billion.

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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 WNGRF at https://www.zacks.com/ap/WNGRF

Seattle-based Nordstrom began to wind down outlets in British Columbia, Alberta and Ontario on Thursday by filing for creditor protection. As part of the court-supervised process, the company has shut down its e-commerce platform and plans to hire a liquidator. The chain plans to close its six Nordstrom and seven Nordstrom Rack stores by the end of June.

“We entered Canada in 2014 with a plan to build and sustain a long-term business there. Despite our best efforts, we do not see a realistic path to profitability for the Canadian business,” said chief executive officer Erik Nordstrom in a press release.

Nordstrom expects to take a US$300-million to US$350-million charge as it closes down Canadian operations. Founded in 1901, the retailer has 350 North American outlets. Its major Canadian competitors include the seven-outlet Holt Renfrew chain, owned by the Weston family, and Toronto-based Hudson’s Bay Co., which also runs Saks Fifth Avenue.

George Minakakis, a retail consultant, said Canada isn’t large enough to support so many high-end department stores chains.

“I’ve always felt that the Canadian market was oversaturated with department stores, because the depth isn’t there and the economy isn’t there, and on the high end there’s just not enough deep pockets,” he said.

Over the past three months of 2022, a period that includes the critical holiday shopping season, customers trimmed their spending at Nordstrom. The chain’s overall sales fell by 4 per cent compared with the previous year, while revenue at discount outlet Nordstrom Rack dropped by 8 per cent.

In addition to closing Canadian operations, Mr. Nordstrom said: “We took decisive actions to right-size our inventory as we entered the new year, positioning us for greater agility amidst continuing macroeconomic uncertainty.”

In a sign of how much money Nordstrom was losing in Canada, the company said closing the stores will lower its projected 2023 sales by US$400-million, but improve its earnings before interest, taxes, depreciation and amortization by US$35-million.

Discount retailer Target Corp. shuttered 133 stores in 2015, laying off 17,000 employees and taking a US$5.4-billion loss. Target moved into Canada by acquiring leases from Hudson’s Bay unit Zellers, which closed down. Hudson’s Bay is now bringing back the Zellers brand.

In November, home improvement chain Lowe’s Cos. Inc. sold its Canadian operations, including the Rona chain, to a private equity fund manager for US$400-million, after spending US$2.4-billion in 2016 to acquire Rona. Lowe’s faced stiff competition from Home Depot Inc. and St. Jacobs, Ont.-based Home Hardware Stores Ltd.

Nordstrom’s exit will mean empty space and lost lease payments for mall owners across the country. The chain has six outlets in Toronto and region, two stores in each of Ottawa and Calgary, and single stores in Edmonton, Langley, B.C., and Vancouver.

The chain’s biggest landlord is Cadillac Fairview Corp. Ltd., the real estate arm of Ontario Teachers’ Pension Plan, which owns properties that are home to five Nordstrom stores, including an anchor location in the Toronto Eaton Centre.

Nordstrom’s landlords also include Ivanhoé Cambridge, with two stores, and Oxford Properties, which has one Nordstrom outlet. Ivanhoé is owned by Caisse de dépôt et placement du Québec while Oxford is the real estate arm of the Ontario Municipal Employees Retirement System.

Twenty per cent of Canadian Imperial Bank of Commerce mortgage holders are seeing their loan balances grow, as rising interest rates make it harder for them to pay off their homes.

New data from CIBC show that $52-billion worth of mortgages – the equivalent of 20 per cent of the bank’s $263-billion residential loan portfolio – were in a position where the borrower’s monthly payment was not high enough to cover even the interest portion of the loans. The bank has allowed these borrowers to stretch out the length of time it takes to pay off the loan, which is known as the amortization period. As well, borrowers are adding unpaid interest onto their original loan or principal.

The disclosure, contained in a footnote in CIBC’s recent quarterly financial results, is the first from a major bank outlining the amount of variable-rate loans where payments no longer cover interest costs.

It shows the financial duress homeowners are under because of the jump in interest rates. It also highlights the growing risk borrowers face when it comes time to renew their mortgages and their amortization periods are required to shrink back to the lengths of time specified in the original contracts. Then, the borrower will face much higher monthly payments.

“It’s absolutely a sign of stress to come. It’s just the stress isn’t here yet,” said Mike Rizvanovic, financial services analyst with investment bank KBW.

CIBC and most of the other big Canadian banks offer variable-rate mortgages that have fixed monthly payments. That means when interest rates increase, more of the borrower’s fixed monthly payment is used to cover the interest expense. The borrowers’ payments remain steady because their amortization periods are automatically extended.

Number of private mortgages growing as Canadians struggle to secure traditional loans, FSRA warns

Borrowers can reach a trigger rate, which often requires them to make higher monthly payments so that they are always reducing the size of their loan.

But CIBC’s variable-rate product allows borrowers to go past the trigger rate and stick with payments that don’t cover the full amount of the interest owed, up to a certain threshold. The unpaid portion of the interest is deferred and added to the mortgage principal and the borrower’s loan balance grows, or negatively amortizes.

Asked whether borrowers with negative amortizations will be able to handle the higher mortgage payments at renewal time, CIBC pointed to comments its chief risk officer said on its recent conference call.

“At this time, we still only see a small portion, less than $20-million, of mortgage balances with clients we see as being at higher risk from a credit perspective,” Frank Guse said.

“We actively monitor our portfolios and pro-actively reach out to clients who are at higher risk of financial stress,” he said according to a transcript provided by CIBC. “Overall, our mortgage portfolio is well positioned and continues to perform well within our expectations.”

At least two other major lenders, Toronto-Dominion Bank and Bank of Montreal, offer similar products that allow mortgages to negatively amortize. However, TD and BMO did not provide any disclosure on the share of borrowers that have a negative amortization. TD did not respond to a query on the matter. BMO spokesman Jeff Roman said its “reporting methodologies are in accordance with industry guidelines.”

CIBC’s filing, for the first quarter that ended in January, is the only one to provide increased transparency on the impact of higher interest rates on its variable-rate portfolio. The same filing said that in the fourth quarter, $39-billion worth of mortgages were negatively amortizing. That grew to $52-billion in the first quarter, said the footnote in the filing. Last summer, the bank said its borrowers were not yet putting unpaid interest onto the principal.

“Higher mortgage rates have resulted in a greater portion of fixed-payment variable mortgages where the monthly mortgage payment does not cover interest and principal,” said Nigel D’Souza, financial services analyst with Veritas Investment Research. “The full impact of higher mortgage rates will be reflected on renewal,” he said.

Today, the Bank of Canada’s benchmark interest rate is 4.5 per cent compared with 0.25 per cent a year ago.

The most recent quarterly filings from the big banks show that a chunk of their mortgage loans have amortization periods of more than 30 years.

At BMO, the proportion of residential mortgages with amortization periods longer than 30 years reached 32.4 per cent in January. At CIBC, the percentage was 30 per cent. At TD it was 29.3 per cent and at Royal Bank of Canada, it was 25 per cent, according to their regulatory filings.

Mr. D’Souza said the payment increase or shock at the time of renewal will be higher for negatively amortizing mortgages compared with variable-rate products that do not have fixed monthly payments and have faced payment increases with every Bank of Canada interest rate hike.