Here are five things you need to know this morning:
TSX sets new all-time high: Canada’s benchmark stock index will open trading this morning at a new all-time high after gaining 263 points to close at 23,465 yesterday. Unlike the gains in the S&P that have mostly been driven by Big Tech this year, the TSX’s strengthening in the latter part of 2024 is a little more broad-based, with a number of sectors inching steadily higher. It’s not hard to see why, as interest rate cuts are lighting a fire under rate-sensitive sectors like banks, utilities and telecoms. Those companies are a major factor in the TSX’s makeup which is why the index is benefitting. Paul Harris of Harris Douglas Asset Management told BNN Bloomberg’s The Street this morning that those sectors will continue to benefit from lower rates, but at a certain point, if an economic slowdown starts to drag on their actual profits, something’s got to give. “If we have a slowdown, how much of a slowdown is that going to be and how will it affect earnings,” he said. “If it affects it a lot, then you may see the stock market ripple down from here.”
Expect faster rate cuts, CIBC says: Speaking of lower rates, CIBC economist Avery Shenfeld thinks we are going to start seeing them even faster and more pronounced than previously expected. In a note to clients yesterday, Shenfeld said he now expects super-sized 50-point cuts in December and January. Coupled with an expected 25 point cut next month, that’s 1.25 percentage points between now and the end of January, which is more than the 75 to 100 points that traders are pricing in on the swaps market. The new forecast is an upgrade from 25 points at a time before “and we no longer expect any pauses on the path to less restrictive rates,” Shenfeld said.
Boeing workers reject labour pact, opt to strike: Boeing’s annus horribilis continues with workers at the Seattle-based aerospace giant roundly rejecting a new labour pact, kicking off a strike at the jetmaker for the first time since 2008. More than 94 per cent of the 33,000 workers represented by the International Association of Machinists and Aerospace Workers voted against a new labour deal that would have given them 25 per cent raises over four years. Union leadership says money isn’t the only sticking point and cite unfair labour practices at the company including discrimination, unlawful surveillance and other things. The strike is another setback for Boeing, whose shares have been walloped this year after a series of missteps that began in January when the door plug blew out on a 737 jet in the middle of a flight. The shares are down about four per cent in premarket trading this morning.
Japan deems 7-Eleven a core company, complicating takeover: Alimentation Couche-Tard’s ambitions of buying convenience store chain 7-Eleven took a setback this morning, with Japan adding the company to a list of “core” corporations. The designation means that anyone wishing to buy more than 10 per cent of the company needs to give the country’s finance ministry advanced warning. It’s something the Japanese company had asked the government to do earlier this month after TSX-listed Couche-Tard first went public with its offer to buy the company for US$39 billion. While it’s not an unsurmountable hurdle, it’s another sign that the doors are not exactly being thrown wide open for Couche-Tard in its bid to buy the convenience store giant.
Ballard Power cutting jobs, citing slowdown: Vancouver-based Ballard Power is planning layoffs including to two members of its executive team as part of a sweeping plan to trim 30 per cent from its expenses. The maker of hydrogen fuel cell related technology says it has shown the door to its CFO and COO and is planning an unspecified number of job cuts to rank and file workers. The company cites a “slowdown in hydrogen infrastructure development and delayed fuel cell adoption” for the move.
