Here are five things you need to know this morning:
Sour: Stocks ended the month on a sour note yesterday brought down by tech earnings. The U.S. Federal Reserve kept interest rates on hold and dropped its explicit tightening bias but signalled it is not ready to reduce rates until the central bank has “greater confidence” that inflation is getting back down to two per cent. Today, tech stocks have a chance at redemption with Apple, Meta and Amazon reporting after the bell. “They’d better blow investors’ minds. Otherwise, the tech selloff is poised to gather momentum – despite the falling yields,” said Ipek Ozkardeskaya of Swissquote in a note to clients. Today we will watch for parliamentary testimony from Bank of Canada Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers at 11:30 a.m. ET. We also get a read of the U.S. manufacturing sector with ISM due out at 10 a.m. ET. I’m going to be watching the financial sector this morning. There are a few negatives floating around like RBC’s City National being fined US$65 million for improper risk controls and a class action proceeding against CIBC. Then there are troubles brewing up for some banks around commercial real estate. Yesterday was New York Community Bank, overnight it was Japan’s Aozora warning of a loss on U.S. commercial property and Deutsche Bank quadrupling its U.S. real estate loss provisions. It’s simmering, but I’ll watch for a boil.
Goose is loose: Shares of Canada Goose were popping in the pre-market after saying sales will be better than expected in their fourth quarter. Investors are overlooking a sales miss in the third quarter. Canada Goose has lost half of its value over the past year because sales growth had stalled for the high-end parka maker, so investors are taking comfort in some glimmers of hope. “While we continue to operate in a challenging consumer spending environment … we are encouraged by our holiday performance, which saw record traffic levels,” CEO Dani Reiss said in a statement. The new outlook suggests the company can grow sales between six and 12 per cent compared to consensus that was looking for just two per cent growth.
Hold the phone: Shares of Rogers Communications could catch a bid today after adjusted profit beat expectations and the phone company offered a rosy picture for growth. Rogers added more post-paid mobile phone customers than expected in the quarter and forecasted service revenue will rise by at least eight per cent this year. Free cash flow will get a 20-per-cent boost thank in part to the big acquisition of Shaw. “With results like today’s we don’t see a reason for the stock to keep trading at a discount to its large Canadian peers,” said Maher Yaghi from Scotia.
Stockpiling: Shares of Qualcomm are slipping even as the company beat sales and profit expectation. The world’s largest supplier of smartphone chips warned that there are still high inventory levels that could blunt the effect of a recovery in smartphone sales. Citi downgraded the stock in reaction, saying “it appears the beat and raise cycle is ending”.
You still make my heart beat fast, Ferrari: Shares of Ferrari are higher after racing past sales and profit expectations in the quarter. While deliveries were lower, total sales were higher as revenue per vehicle increased by 14 per cent. Their outlook was in line with expectations which is bringing relief to analysts who were worried about a slowdown in the luxury market, especially considering softness in China. The stock is poised to open at an all-time high. There are also multiple reports that Formula One driver Lewis Hamilton is going to leave Mercedes and join team Ferrari starting in 2025. It would mark a pairing of bests: the most successful driver in F1 history with the most successful team in history.