Here are five things you need to know this morning:
Bank of Canada Day: The Bank of Canada will make its rate decision this morning at 10 a.m. EDT. I’ll break the news live on-air with our usual firecracker panel of experts. The Bank of Canada is expected to hold interest rates for a second meeting in a row. Cooling inflation, a weakening Business Outlook Survey, slowing housing market and weaker retail sales volumes all give the Bank of Canada cover to hold rates at five per cent – the highest since 2001. In addition to the rate decision, we will get the central bank’s Monetary Policy Report including updated growth and inflation targets. The press conference with Bank of Canada Governor Tiff Macklem begins at 11 a.m. EDT.
Shaken or stirred?: Futures are mixed right now with earnings dominating the tape. Yesterday’s trade was held up by earnings stories and today will likely follow a similar pattern, especially with bellwethers Microsoft and Alphabet out. Tonight, the tech earnings bonanza continues with Meta after the close.
Anything but soft: Shares of Microsoft are rallying in the premarket after it delivered better than expected sales and profit growth. The cloud crown jewel, Azure, delivered solid 29 per cent sales growth – also better than expected. Demand for AI-related products continues to show up in a meaningful way for the cloud business.
Can I buy a vowel?: Meanwhile, shares of Alphabet are under pressure in part because of its poor cloud showing. While total sales and profit at the parent company of Google and YouTube came in above expectations, profit in the cloud business was much weaker than anticipated. We will look to Amazon tomorrow, which could be the cloud tie-breaker.
Struggling to chug: Shares of CN Rail could come under pressure today and weigh on the TSX after the railway delivered disappointing results. Profit fell more than 20 per cent, which was worse than feared. The company blamed a dog’s breakfast of issues: B.C. wildfires, port strike and floods. Sales also fell and operating ratio surged (higher operating ratio means expenses are making up a greater portion of sales). But the company maintained their profit forecast for the year, calling for flat to slightly negative earnings growth. That would be a big improvement from the quarter just delivered, so we will see to what extent that creates a buffer for the stock.