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Cryptocurrencies fell one day after a reversal in technology stocks pushed the S&P 500 and Nasdaq Composite to their worst day since 2022.

Bitcoin was lower by 2% at $64,299.18 early Thursday, according to Coin Metrics. Disappointing quarterly earnings from from Alphabet and Tesla late Tuesday weighed on the rest of the tech sector as investors rotated out of high-risk assets, including cryptocurrencies.

“It’s quite clear the setbacks are more about bigger picture macro forces, with global financial markets in turmoil,” said Joel Kruger, market strategist at LMAX Group. “Concerns around the health and outlook for the global economy have intensified amidst softer economic data, downbeat US earnings, and ineffective accommodative central bank moves. Consequently, there has been nowhere to hide, with most major assets across currencies, commodities and stocks relenting to traditional safe havens.”

The market is also still in the throes of an ongoing Mt. Gox repayment schedule that has resulted in a persistent round of bitcoin selling pressure this month, he added.

Meanwhile, ether fell 6% to $3,172.59 as newly-launched ether exchange-trade funds traded for a third day. The Grayscale Ethereum Trust (ETHE), which converted to an ETF, saw $484 million in outflows in the previous session.

“What is happening is the same as when spot bitcoin ETFs were launched back in January,” said Yuya Hasegawa, crypto market analyst at Japanese bitcoin exchange Bitbank. “Grayscale’s Ethereum trust had been trading at [a] discount for a long time, so traders may have bought some shares of the trust and are now selling spot ETH for arbitrage — this is also what happened for bitcoin when the ETFs started trading.”

https://www.cnbc.com/2024/07/25/crypto-market-today.html

• Real gross domestic product increased at a 2.8% annualized pace in the second quarter, above the 2.1% forecast.
• The personal consumption expenditures price index, a key measure for the Fed, rose 2.6% for the quarter, down from the 3.4% move in Q1. Core PCE prices were up 2.9%, down from 3.7%.
• However, the report also indicated that the personal savings rate continues to decelerate, at 3.5% for the quarter, compared with 3.8% in Q1.
• Initial jobless claims declined by 10,000, while durable goods orders unexpectedly plunged.

https://www.cnbc.com/2024/07/25/us-gdp-q2-2024.html

Grocery and drugstore retailer Loblaw Cos. Ltd. reported its second-quarter profit decreased compared with a year ago.

The parent company of Loblaws and Shoppers Drug Mart says it earned a profit available to common shareholders of $457 million or $1.48 per diluted share for the quarter ended June 15.

The result was down from $508 million or $1.58 per diluted share in the same quarter last year, which Loblaw attributed primarily to charges related to the settlement of class action lawsuits. On Thursday, the grocer announced it and parent company George Weston Ltd. have agreed to pay $500-million to settle a class-action lawsuit regarding their involvement in an alleged bread price-fixing scheme.

Revenue for the quarter totalled $13.95 billion, up from $13.74 billion a year earlier.

Food retail same-stores sales rose by 0.2 per cent, while drug retail same-store sales increased by 1.5 per cent, with front store same-store sales down 2.4 per cent and pharmacy and health-care services same-store sales up 5.4 per cent.

On an adjusted basis, Loblaw says it earned $2.15 per diluted share in its latest quarter, up from an adjusted profit of $1.94 per diluted share a year earlier.

FirstService Corp. (FSV) on Thursday reported second-quarter earnings of $35.1 million.

The Toronto-based company said it had profit of 78 cents per share. Earnings, adjusted for amortization costs and non-recurring costs, were $1.36 per share.

The results beat Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was for earnings of $1.26 per share.

The property services provider posted revenue of $1.3 billion in the period, also topping Street forecasts. Four analysts surveyed by Zacks expected $1.28 billion.

 Waste Connections Inc. (WCN) on Wednesday reported second-quarter earnings of $275.5 million.

On a per-share basis, the Ontario, Ontario-based company said it had net income of $1.07. Earnings, adjusted for one-time gains and costs, were $1.24 per share.

The results surpassed Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was for earnings of $1.18 per share.

The solid waste services provider posted revenue of $2.25 billion in the period, which also beat Street forecasts. Nine analysts surveyed by Zacks expected $2.22 billion.

West Fraser Timber Co. says it earned US$105 million in the second quarter, up from a loss of US$131 million a year earlier.

The Vancouver-based company says it saw sales of US$1.7 billion, up from US$1.6 billion during the same quarter last year.

Diluted earnings per share were US$1.20, compared with a loss of US$1.57 last year.

President and CEO Sean McLaren says the company continued to experience demand softness in its North American lumber business.

However, he says the quarter also benefited from relative strength in new home construction demand carrying over from the first quarter.

McLaren says the company continues to realize the benefits of the recent closures of some higher-cost lumber mills, and plans to continue focusing on optimizing its asset portfolio to lower costs.

This report by The Canadian Press was first published July 24, 2024.

Teck Resources Ltd. is cutting its copper production forecast and hiking its costs just weeks after the Canadian miner’s focus narrowed significantly to rely only on metals.

Vancouver-based Teck on Thursday lowered its full year copper forecast by seven per cent to about 468,000 tonnes as it rolled out its second quarter financial results. The company also reduced its molybdenum forecast by 19 per cent.

Teck increased its copper cost forecast by two per cent to roughly US$2.10 a pound.

Teck’s copper issues stem mainly from challenges in the ongoing ramp up of its giant QB2 mine in Chile. The company is experiencing grade problems because it isn’t able to access certain areas of QB2 because of geotechnical issues and pit dewatering.

Teck put the copper mine in the high mountains of northern Chile into production last year after an arduous and expensive construction period. Teck’s costs ended up spiralling to about US$8.7-billion, or 85 per cent higher than a 2019 estimate.

Teck earlier this month closed the US$6.9-billion sale of 77 per cent of its metallurgical coal business to Glencore PLC of Switzerland. Teck had earlier sold the other 23 per cent of its coal segment to Japan’s Nippon Steel and South Korea’s POSCO.

Despite generating billions in free cash flow every year, over time fewer investors were willing to put money into Teck any more because of its exposure to coal. That’s because of ESG mandates that forbids many big investors from investing in fossil fuels. By focusing solely on metals such as copper, which doesn’t have the same dirty image as coal, Teck hopes to appeal to a wider class of investors.

The company’s B shares closed at an all-time high in May of $73.22 a share but have since pulled back by about 15 per cent. On Wednesday the shares were trading down by about 1.2 per cent in early trading on the Toronto Stock Exchange.

Glencore originally proposed buying all of Teck early last year, including the company’s copper and zinc mines, in a US$23.1-billion transaction. But Teck repeatedly rejected Glencore’s advances. Controlling Teck shareholder Norman B. Keevil said he was opposed to Glencore buying all of Teck, telling The Globe that “Canada is not for sale.”

Earlier this month, as Federal Industry Minister François-Philippe Champagne approved the Glencore takeover of Teck’s coal business, he sent a stern message that essentially echoed Mr. Keevil’s comments.

From now on, Mr. Champagne said he will only approve the acquisition of Canadian miners with significant critical minerals operations under the most exceptional of circumstances. That means that Teck and other big Canadian critical minerals miners are essentially takeover-proof.

 Rogers Communications Inc. reported its second-quarter profit rose to $394 million from $109 million a year ago, in part due to lower restructuring and acquisition costs related to its purchase of Shaw Communications last year.

The company says the profit amounted to 73 cents per diluted share for the quarter ended June 30, up from 20 cents per diluted share in the same quarter last year.

Revenue totalled $5.09 billion, up from $5.05 billion a year earlier, helped by growth in its wireless and media businesses.

Rogers says wireless revenue totalled $2.47 billion in the quarter, up from $2.42 billion a year earlier, while media revenue rose to $736 million from $686 million a year ago.

On an adjusted basis, Rogers says it earned $1.16 per diluted share in its latest quarter, an increase from its adjusted profit of $1.02 per diluted share in the same quarter last year.

President and chief executive Tony Staffieri says Rogers’ strong results for the quarter come amid the backdrop of a growing market and healthy competition in the telecommunications sector.

This report by The Canadian Press was first published July 24, 2024.

The Bank of Canada lowered its benchmark interest rate for the second consecutive time on Wednesday and said that it is now putting more emphasis on downside risks to economic growth, rather than focusing mainly on the risk of a rebound in inflation.

The widely anticipated move brings the bank’s policy rate to 4.5 per cent from 4.75 per cent. This is the second cut in a long-awaited monetary policy easing cycle, and comes after the bank raised interest rates 10 times in 2022 and 2023 to tackle the most serious bout of inflation in a generation.

Price pressures have eased over the past two years, as global supply chains have improved, economic growth has stalled and restrictive interest rates have curbed consumer spending. That’s led the bank to adopt a more balanced approach to monetary policy in its latest rate decision, teeing up additional interest rate cuts later this year.

“As inflation gets closer to the 2-per-cent target, the risk that inflation comes in higher than expected has to be increasingly balanced against the risk that the economy and inflation could be weaker than expected,” Bank of Canada Governor Tiff Macklem said, according to the prepared text of his press conference opening statement.

He said that it is “reasonable” to expect additional rate cuts if inflation continues trending lower, as the central bank is forecasting. But he said that the bank’s governing council will be “taking our monetary policy decisions one at a time.”

The annual rate of consumer price index inflation has been below 3 per cent since the start of year, coming in at 2.7 per cent in June, down from a peak of 8.1 per cent in 2022. The bank’s updated forecast sees inflation falling below 2.5 per cent in the second half of the year and settling “sustainably” at 2 per cent next year.

Muted demand for goods and services, alongside rising unemployment and a weakening labour market, is pulling inflation lower.

However, there are still some areas where price pressures remain, including for rent, mortgage interest costs and services that are sensitive to wage increases. And the bank warned geopolitical turmoil, trade disruptions and political risks, such as new tariffs, could put upward pressure on inflation.

“We are increasingly confident that the ingredients to bring inflation back to target are in place. But the push-pull of these opposing forces means the decline in inflation will likely be gradual, and there could be setbacks along the way,” Mr. Macklem said.

So far, inflation has returned to normal levels without the Canadian economy falling into a recession. That looks like a soft-landing, which many economists thought was impossible a year ago.

However, the country’s positive gross domestic product growth is largely a result of a rapid increase in population. On a per-person basis, GDP has declined for the past year-and-a-half.

GDP growth came in weaker-than-expected in the first half of the year. In its quarterly Monetary Policy Report (MPR), published Wednesday, the bank chalked this up to slowing demand for vehicles and travel, as well as muted consumer spending on discretionary goods as households put more money towards servicing their debt.

The MPR sees economic growth picking up in the second half of the year and through 2025. Annual GDP growth is expected to be 1.2 per cent this year, before rising to 2.1 per cent in 2025 and 2.4 per cent in 2026.

“This reflects stronger exports and a recovery in household spending as borrowing costs ease. Business investment is also expected to strengthen as demand picks up, and residential investment is forecast to grow robustly,” Mr. Macklem said.

“Over all, with the economy strengthening, excess supply will be absorbed next year and into 2026.”

Wednesday’s rate cut will be welcomed by homeowners with variable rate mortgages, which track changes in the central bank’s policy rate. Interest rates for fixed-rate mortgages, which are based on yields in bond markets, may move less.

Either way, housing affordability will remain stretched until interest rates fall further, and analysts are not expecting an immediate rebound in the housing market.