In the markets: Markets On Edge, Down Ahead of Election

Plus: Boeing strike comes to an end; BC port workers locked out; Earnings pour in.

Canada Stock Digest - Nov. 5, 2024

Market Overview

• TSX Composite Index closed at 24,256.06 CAD, flat

• TSX Venture Index closed at 603.27 CAD, down by 0.11%

• NASDAQ Composite closed at 18,179.98 USD, down by 0.33%

• Dow Jones Industrial Average (DJI) closed at 41,794.60 points, down by 0.61%

• S&P 500 closed at 5,712.69 USD down by 0.28%

Yahoo Finance Canada

Stock & Market News

• TSX Futures Rise on Crude Prices: Canadian TSX futures rose as crude prices strengthened, while investors await the results of the U.S. presidential election, which may impact Canada's economy due to strong trade ties.[Reuters]

• Global Investors Await U.S. Election Results: Global markets are on edge as the U.S. election could bring changes in tax, trade, and regulatory policies, with potential impacts on the U.S. dollar, debt, and key industries.[Reuters]

• Analyst upgrades and downgrades: BCE’s $5-billion Ziply acquisition, seen as strengthening its North American fiber position but raising concerns over free cash flow impact and dividend sustainability until 2028, with some downgrades following the costly U.S. foray. Sun Life’s Q3 earnings beat, driven by group insurance and fee income growth, led analysts to raise price targets despite ongoing outflows at MFS. Brookfield Asset Management impressed with strong fee-related earnings growth and asset monetization prospects, prompting price target hikes as analysts anticipate continued growth. Wajax faced a target cut after a disappointing Q3 and competitive pressures, while modest target boosts went to Air Canada and Nutrien ahead of earnings.[Globe]

• Thomson Reuters Q3 Revenue Exceeds Expectations: Thomson Reuters' Q3 revenue rose 8% to $1.72 billion, driven by AI investments and acquisitions, with an increased full-year organic revenue growth forecast of 7%.[Reuters]

• Sun Life Financial Q3 Earnings: Sun Life Financial reported a strong Q3 with earnings rising to $1.35 billion, driven by growth in benefits and fee income, alongside a dividend increase to 84 cents per share.[CP]

• Cargojet's Q3 Earnings Growth: Cargojet's Q3 earnings surged to $29.7 million, nearly triple from last year, aided by stabilizing economic factors but impacted by geopolitical uncertainties in the transportation sector.[CP]

• Restaurant Brands International Misses Q3 Estimates: Restaurant Brands International fell short of Q3 earnings and revenue estimates as all its chains, except Tim Hortons, underperformed in same-store sales; improvement is noted in October with better consumer sentiment and successful promotions.[CNBC]

• Nintendo Profit Decline: Nintendo reported a 60% profit drop in the first half of the fiscal year due to declining demand for its aging Switch console, though it remains committed to meeting annual sales goals.[CP]

• Boeing Workers Accept Offer: Boeing workers vote to accept a new labour contract, ending a costly strike that impacted the aerospace company and broader economy.[CNN]

• Yum Brands Q3 Earnings Miss: Yum Brands reported Q3 earnings and revenue below expectations, with same-store sales for KFC and Pizza Hut declining due to weak consumer sentiment and geopolitical tensions; only Taco Bell showed positive sales growth.[CNBC]

• Aramco's Q3 Profit Drop: Saudi Aramco's Q3 profits decreased by 15% to $27.5 billion due to lower oil prices and weakening refining margins, yet it still announced significant dividends and remains a major global oil industry player.[CP]

• Ferrari Q3 Earnings Rise: Ferrari reported a 7% increase in core profits for Q3 due to high demand for premium, personalized models, though shares fell as it did not revise its full-year forecast.[Reuters]

• UMG Sues Believe for $500M: Universal Music Group filed a $500 million copyright lawsuit in the U.S. against Believe, alleging unauthorized distribution of altered artist tracks.[Reuters]

Economic News

• Record Oil Hedging in October: Oil traders hit record hedging activity in October, driven by Middle East conflict and 2025 supply-demand concerns, with ICE and CME Group reporting unprecedented trading volumes.[Reuters]

• Federal Oil and Gas Emissions Cap: The federal government has proposed draft rules to cut emissions from Canada’s oil and gas sector by 35% from 2019 levels, allowing production to increase while targeting emissions reduction through existing technologies.[CBC]

• B.C. Port Lockout: Over 700 unionized port workers in British Columbia have been locked out by employers in a labour dispute over automation and contract terms, disrupting operations at multiple terminals.[CBC]

• Australia's Inflation and Job Growth Outlook: Australia's central bank expects inflation to ease gradually as demand outpaces supply, projecting slow economic growth and a peak jobless rate of 4.5% by 2025.[Reuters]

• European Companies Cut Jobs Amid Economic Struggles: Multiple European firms, including Michelin and Schaeffler, announced layoffs as economic challenges and weak demand affect various industries.[Reuters]

World News & Politics

• Election Day 2024: Americans head to the polls in a tight race between Vice President Kamala Harris and former President Donald Trump, with key battleground states likely to determine the outcome.[CNN]

• B.C. Windstorm Power Outages: Thousands of households in British Columbia lost power as strong winds battered coastal areas, causing widespread outages that could last overnight due to downed trees and damaged equipment.[CBC]

• Tropical Storm Rafael Nears Cuba: Tropical Storm Rafael strengthens in the Caribbean, expected to become a hurricane and impact Cuba, Jamaica, and the Cayman Islands with heavy rain and strong winds.[CNN]

Economic Events

9:30am Balance of Trade

Friday Unemployment Rate

Recent Earnings

TSX

• THOMSON-REUTERS CORP (TRI)
  Revenue reported at 103.18B CAD, estimated at 2.36B CAD
  EPS reported at 1.06 CAD, estimated at 1.11 CAD

• SUN LIFE FINANCIAL INC (SLF)
  Revenue reported at 44.73B CAD
  EPS reported at 1.70 CAD, estimated at 1.76 CAD

• FORTIS INC (FTS)
  Revenue reported at 29.32B CAD, estimated at 2.96B CAD
  EPS reported at 0.82 CAD, estimated at 0.85 CAD

• COLLIERS INTL GROUP INC (CIGI)
  Revenue reported at 10.74B CAD, estimated at 1.62B CAD
  EPS reported at 2.05 CAD, estimated at 1.84 CAD

• TOROMONT INDUSTRIES LTD (TIH)
  Revenue reported at 10.05B CAD, estimated at 1.26B CAD
  EPS reported at 1.68 CAD, estimated at 1.59 CAD

• BOYD GROUP SERVICES INC (BYD)
  Revenue reported at 4.71B CAD, estimated at 1.03B CAD
  EPS reported at 0.65 CAD, estimated at 0.20 CAD

• TRANSALTA CORP (TA)
  Revenue reported at 4.27B CAD, estimated at 533.13M CAD
  EPS reported at 0.14 CAD, estimated at -0.12 CAD

• TOPAZ ENERGY CORP (TPZ)
  Revenue reported at 4.14B CAD, estimated at 83M CAD
  EPS reported at 0.07 CAD, estimated at 0.12 CAD

• CARGOJET INC (CJT)
  Revenue reported at 2.24B CAD, estimated at 247.29M CAD
  EPS reported at 1.12 CAD, estimated at 1.48 CAD

• INTERRENT REAL EST INVESTMENT TRUST UIT (IIP.UN)
  Revenue reported at 1.66B CAD

US Markets

• VERTEX PHARMACEUTICALS INCORPORATED (VRTX)
  Revenue reported at 122.03B USD, estimated at 2.69B USD
  EPS reported at 4.08 USD, estimated at 4.38 USD

• PALANTIR TECHNOLOGIES INC. (PLTR)
  Revenue reported at 92.74B USD, estimated at 705.11M USD
  EPS reported at 0.09 USD, estimated at 0.10 USD

• APOLLO GLOBAL MANAGEMENT, INC. (NEW) (APO)
  Revenue reported at 79.41B USD, estimated at 904.33M USD
  EPS reported at 1.73 USD, estimated at 1.85 USD

• EMERSON ELECTRIC COMPANY (EMR)
  Revenue reported at 62.89B USD, estimated at 4.57B USD
  EPS reported at 1.47 USD, estimated at 1.48 USD

• MARATHON PETROLEUM CORPORATION (MPC)
  Revenue reported at 48.51B USD, estimated at 34.34B USD
  EPS reported at 1.00 USD, estimated at 1.87 USD

Fun Fact

👔Wearing a tie might seem like a harmless fashion choice, but it can actually impact blood flow to the brain! Studies show that a tightly fastened tie can reduce cerebral blood flow by around 7.5 percent. When the tie is snug around the neck, it compresses the jugular veins and carotid arteries, which are responsible for carrying blood to and from the brain. This slight restriction can lead to a subtle feeling of discomfort, headache, or even mild dizziness in some people, particularly those who wear ties for extended periods. While the effects aren’t severe enough to cause major health issues for most, it’s a good reminder to keep things a bit loose if you’ll be suited up for long hours.

Investment Tip

🥱Focus on “boring” sectors in times of market hype. When everyone’s buzzing about tech or the latest IPOs, seasoned investors often overlook dependable, under-the-radar industries like utilities or waste management. These sectors might not make headlines, but they often provide steady returns, dividends, and some level of insulation from economic swings. By scooping up shares while others chase trends, you can quietly build a portfolio that grows steadily—and often catches a nice bump when the market eventually swings back to safer picks. It’s the classic “quiet wins” strategy, with a twist of patience!

Have a great trading day! 😊

Disclaimer: The information provided in this newsletter is for educational purposes only and does not constitute financial advice. Always consult with a financial advisor before making investment decisions.