Here are five things you need to know this morning:
TSX joins the ATH party — and it’s not just Big Tech: Canada’s benchmark stock index closed on Thursday at its highest level ever: 22,544. Unlike high-flying U.S. markets that have relied on Big Tech names to do much of the heavy lifting, Toronto’s rally is far more broad-based, with more sectors showing gains. Consider that for every stock on the composite index that’s in negative territory this year, there are two making positive contributions. Contrast that with the S&P 500 where despite eye-popping gains for the Nvidias and Super Micro Computers of the world, only 321 of the 503 companies on the S&P 500 are in the green for the year.
Time will tell if Toronto’s slower and steadier rally lasts — past performance is no guarantee of future results, as the filing disclosures are quick to note — but after an extended period of underperformance, it’s nice to see patient Canadian investors rewarded a little.
Bank earnings season underway in U.S.: A slew of U.S. banks have kicked off earnings season this morning, and one to watch is Wells Fargo. The lender’s revenue and profit came in above analyst expectations. But the shares are under pressure this morning as investors seem to be focusing on weakness in the bank’s net interest income. The bank says the decline was due to the impact of higher interest rates on funding costs. Other lenders including JP Morgan, Citi and BNY Mellon also have earnings to digest.
Cogeco revenue and adjusted profit tick higher: TSX-listed cable and internet provider Cogeco posted quarterly results after the bell on Thursday, and the numbers showed modest increases in revenue and adjusted profit, beating analyst expectations on both metrics. The company said the results were driven by growth in its internet subscriber base, and efforts to drive operational efficiency.
Coveo shares plunge to new 52-week low as biggest holder sells 23M shares: Shares in TSX-listed IT company Coveo Solutions Inc. have fallen to their lowest level in 13 months after the company said its biggest shareholder, likely activist investor Elliott Investment Management LP, is looking to sell most of its stake in the Montreal-based company. Coveo said a single shareholder has tendered a block of 23.7 million shares to the company’s buyback program. Coveo didn’t name Elliott but the money manager is the only institutional investor with that big of a stake, according to Bloomberg data. The company’s shares lost 18 per cent following the news on Thursday to close at $6.45. That’s a decline of more than 30 per cent for the year, and less than half the $15 that shares in the AI firm were valued at during the 2021 IPO.
Rio Tinto mulling new takeovers — including Teck?: Reports out of London suggest that global mining conglomerate Rio Tinto PLC is on the hunt for new acquisitions in the wake of the collapse of BHP Billiton’s bid for Anglo American — and Canada’s Teck Resources is on a list of possible targets. Citing unnamed sources, Sky News reports that the company has held talks with bankers over a potential bid for numerous assets, including Teck. The report says no offer is imminent and Teck is simply on a list of numerous potential targets.
