Here are five things you need to know this morning:
Retail sales stuck in neutral: Sales at Canadian retailers rose by 0.4 per cent to $66.6 billion in August, Statistics Canada reported this morning. That’s a smaller increase than economists were expecting and were it not for a surge of Canadians opening their wallets for a new set of wheels, the numbers would look downright gloomy. New car dealers saw a surge of 4.3 per cent, while used car lots fared almost as well, up 2.1 per cent. But if the automotive sector is stripped out, retail sales fell by 0.7 per cent. “Looks like those lower interest rates sparked demand for autos but outside that we are seeing a lot of softness,” said Sal Guatieri, a senior economist at BMO, on BNN Bloomberg’s The Street this morning. Years of high inflation coupled with an ongoing wave of mortgage renewals are “really putting the bite on overall spending” for anything but necessities, Guatieri said.
Corus posts quarterly loss: Corus Entertainment shares will likely be under pressure today, as the media company swung to a net loss of more than $25 million last quarter. Revenues came in at just over $248 million for the quarter, a decline of 21 per cent. That’s a much bigger decline than the $283 million that analysts were expecting. An ongoing slowdown in the advertising business was the biggest reason for the shortfall, and the company says it expects that trend to continue at least into early 2025. The shares traded at 16 cents yesterday, down from the $1.02 they were worth as recently as January, and well off the north of $6 they were trading at back in 2021.
Cutting the purse strings: Shares in luxury brand owner Capri Holdings will be one to watch after a judge in New York has blocked a proposed US$8 billion takeover of the company by fellow luxury conglomerate Tapestry Inc. on competitive grounds. Capri, which owns brands like Michael Kors, Versace and Jimmy Choo, has been working on a deal to be taken over by Tapestry, the owner of handbag lines like Coach and Kate Spade, for much of the past year. But the U.S. Federal Trade Commission has had concerns about the deal, so the court ruling is a victory for its consumer-focused and activist head Lina Khan. The judge said allowing the deal to go ahead would harm competition in the market for “accessible luxury” handbags. Capri shares are off by almost 50 per cent in the premarket this morning, while Tapestry is up about 15 per cent. With volatility like that, it’s no wonder why I personally prefer the luxury fashion brand that has stood the test of time: Kirkland Signature.
McDonald’s finds E. coli source: A single produce supplier was the source of the E. coli outbreak at McDonald’s restaurants across a half-dozen Western U.S. states, the fast-food chain is saying this morning. Taylor Farms — based in Salinas California, also known as ‘The Salad Bowl of The World’ — issued a recall for peeled and diced onions from one of its facilities in Colorado. That state is the epicentre of the outbreak that has so far sickened almost 50 people. McDonald’s has since removed Quarter Pounders from its menu, owing to its status as their only one that contains slivered onions. But other fast food chains including Burger King and Taco Bell have also either removed onions from their menu or temporarily changed their processes for receiving, handling and preparing them.
Trump trade is on: With less than two weeks until the vote counting begins in the U.S. presidential election, markets are startingly to price in all the different potentialities. The U.S. dollar hit a three-month high this week, partly on the view that a Donald Trump win would bring in the tariffs he has talked about, which would push up inflation and cause the U.S. Federal Reserve to slow or abandon its pace of rate cuts. While the polls are neck and neck, betting markets (which are dominated by non-Americans who can’t vote, it’s worth remembering) now solidly favour the former president. Of all the Trump trades, however, there’s probably none simpler than the shares in the company that bears his name. Trump Media shares are always volatile, but it’s worth noting they were priced at about $12 a month ago and are currently trading hands at just shy of $35. It’s not hard to decipher why that might be.