Here are five things you need to know this morning:
Canadian inflation cools to lowest point since 2021
Canada’s annual inflation rate cooled to two per cent in August, Statistics Canada reported this morning. That’s down from 2.5 per cent in July and better than the consensus economist expectation of 2.2 per cent. It’s the lowest rate we’ve seen since February 2021, and bang on the Bank of Canada’s long term target. That doesn’t mean the policy makers at the central bank are putting their feet up and unfurling the “MISSION ACCOMPLISHED” banner and “WE DID IT” novelty hats, but it is validation that monetary policy decisions seem to be guiding the consumer price index sustainably back into the range they are comfortable with. While the headline rate is vulnerable to volatile swings because of components like food and energy, the so-called core rate that strips out that noise is also trending in the right direction, albeit somewhat higher. The bank’s two core inflation measures decreased to 2.35 per cent from 2.55 previously, and a three-month moving average also eased to 2.4 from 2.8.
Quebecor has kicked the tires on Corus takeover: report
The Globe & Mail is reporting this morning that Quebec based telecom company Quebecor made an overture to buy media company Corus Entertainment, but the latter wasn’t receptive to a takeover. According to the report, officials at Quebecor met with Corus exes six months ago, a meeting that was followed by a purchase offer that the company didn’t respond to. While nobody involved is talking on the record, the story has raised some eyebrows on Bay Street. TD Cowen analyst Vince Valentini said the move could make sense for Quebecor, depending on the purchase price and what assets they would want to keep in the long run. Corus shares have been clobbered this year after losing specialty channel rights and implementing rounds of layoffs. The shares are changing hands at around 13 cents, valuing the whole company that owns Global and numerous other broadcasting assets at just $25 million. But the debt load is closer to $700 million which would be a tough pill for Quebecor shareholders to swallow. But “if [Quebecor] is merely looking at an inexpensive way to add some national scale to its current media business, then investors could very well applaud the move,” Valentini said, adding he would not expect regulatory hurdles.
Intel shares surge on Foundry spin off plan
Shares of chip maker Intel are trading higher in the premarket this morning after the company said it plans to turn its ‘Foundry’ business into an independent unit with its own board and potential to raise its own outside capital. Intel started the business as a way to manufacture chips for other customers, but so far the unit has been nothing but a drag on their bottom line. Intel has spent $25 billion in each of the past two years on Foundry. In making the announcement this morning, Intel also said tech giant Amazon has signed on as a customer for some customer AI chips for its cloud business AWS. Prior to their mini surge this morning, Intel shares have lost more than half their value since March.
Microsoft hikes dividend 10%, plans $60B share buyback
Elsewhere in the tech sector, Microsoft is a stock to watch today after the megacap announced it will raise its quarterly dividend by 10 per cent to 83 cents a share. That’s up from 75 previously. The tech giant will also buy back $60 billion of its own shares too, in another move that’s bringing a smile to investors’ faces. The company’s shares have gained 31 per cent so far this year and now have a market cap of $3.2 trillion.
Shopify shares move higher on analyst upgrade
Shares in e-commerce giant Shopify are gaining this morning after Redburn analyst Dominic Ball says the company is poised to be the prime beneficiary of expected growth in online shopping south of the border. Ball says the company is an industry leader in innovation and social media integrations, has an easy-to-use platform that give it a leg up to gain customers. He expects the company to sign up more and more customers next year. He has a US$99 price target on the shares, which implies 35 per cent upside from where they are trading now. The stock is up about two per cent in premarket trading.
