Here are five things you need to know this morning
Hiring surged in January ahead of tariff threat: Canada’s job market added 76,000 new positions last month, well ahead of expectations and enough to nudge the jobless rate down a tick to 6.6 per cent. Economists were expecting about 25,000 new jobs and for the rate to inch higher to 6.8. The stronger than expected number pushed up the loonie and look comparatively strong compared to U.S. numbers also released this morning. The U.S. economy added 143,000 jobs last month, below expectations of 170,000.
Amazon beats but future looks cloudy: Quiet day on the earnings front today, which means the most noteworthy corporate numbers for investors to digest are those that came after the bell from Amazon yesterday. The e-commerce and cloud computing giant reported better-than-expected revenue of US$187 billion last quarter, a 10 per cent uptick. But the outlook for the coming one is worse than anticipated, with revenue coming in potentially as low as $151 billion. Markets seem to be focusing on that latter one, with shares selling off in after-hours trading yesterday and continuing under pressure this morning. The company spent almost $28 billion on property and equipment during the quarter, a significant increase from last year’s level and much of it tied to beefing up AI capacity to maintain pace in the ongoing arms race.
Prepare for unforeseen consequences: It likely wasn’t high on his list of things to achieve in his first 100 days, but getting Canada’s Trans Mountain Pipeline closer to full capacity years ahead of schedule is apparently one of the achievements that U.S. President Donald Trump seems to be pulling off. Trump’s threat to put a 10 per cent tariff on oil imports from Canada has left the market scrambling for alternatives, and one of the most obvious ones is the recently completed pipeline taking up to 900,000 barrels a day from Alberta’s oil country to export terminals in B.C. Jason Balach, the company’s vice-president of business development, told an energy conference in Houston Thursday that if Trump follows through with the tariffs currently scheduled for March 1, it will likely bring the pipeline to full capacity this year. That’s well ahead of the previously anticipated timeline of 2028 when that might have happened by itself. “We are ready to handle the extra volume,” he said.
Cheap stocks and value stocks are not the same: General Motors Co. and Ford Motor Co. are among the cheapest stocks in the S&P 500, but that doesn’t necessarily make them a buying opportunity. At least, that seems to be the consensus on Wall Street, where analysts are slashing their ratings on the century-old carmakers. The share of sell recommendations on both companies is at its highest level in more than a decade, according to Bloomberg, with more than a quarter of Ford analysts advising sell, and almost one in ten for GM. Both companies posted earnings recently that can fairly be described as mixed, and with the tariff threat poised to wallop the car business perhaps more than any other, investors seem to be waiting and seeing. “We are not a buyer here because the traditional automotive business, which is a tough business to begin with, is about to get disrupted,” said Ivana Delevska, chief investment officer at Spear Invest. Bloomberg Intelligence analysts Steve Man and Peter Lau agree with that assessment, saying “the stocks are cheap, but fundamentals are not looking good,” and adding that there’s a “risk of a value trap” with both.
Dominic LeBlanc sits down with Amanda Lang: We have an exclusive interview with Canada’s Finance Minister on offer today, as Dominic LeBlanc sat down with Amanda Lang for a wide-ranging interview about – among other things – the outlook for the ongoing trade dispute with the U.S. Among the main takeaways from their conversation are that LeBlanc says it is time for Canada to reduce the growth in government spending, even as Ottawa considers ramping up its defence spending and taking other measures to get ready for the economic uncertainty to come. He also had some interesting comments on capital gains tax changes, Canada’s supply management regime, and some thoughts on the next budget, one that he will theoretically be tasked with coming up with. You can watch their entire interview at 3 p.m. eastern time today on Taking Stock.
