Here are five things you need to know this morning:
Canada adds 91,000 jobs: Canada’s economy added 91,000 jobs last month, Statistics Canada reported this morning, almost four times better than analysts were expecting. The jobless rate declined by 0.1 per cent to 6.7 per cent as for the first time in several months, more jobs were added than people were to Canada’s population. Jobs numbers in the U.S. were also strong, with payrolls increasing by 256,000 new jobs and the jobless rate ticking down to 4.1 per cent. Both numbers were better than forecasts. The market reaction to the news was to lower the odds, slightly, of a Bank of Canada rate cut later this month – and certainly increase the likelihood that if they do cut, it won’t be by 50 basis points. Odds of a 25-point cut on the swaps market fell to coin toss territory after the numbers came out. That compares with about an 80 per cent implied chance of a cut this time yesterday.
Insured losses from L.A. fires could top US$20B: Although its too soon to calculate the economic toll of the fires currently devastating areas of Los Angeles, the blazes are already on their way to being among the costliest fires on record. Insured losses from the blazes could top US$20 billion, according to Bloomberg Intelligence economist Mattew Palazola, who notes that at least 5,000 structures have already been wiped out, and more are likely. That pales in comparison to 2018’s Camp Fire where more than 18,000 structures were lost, but most of those were in Butte County, where the insured tally came in at $12 billion. The Palisades, Eaton and other fires in and around Los Angeles are likely to cost far more because of their location in some of the most expensive zip codes in America. And as is often the case in such events, the insurance bill is a tiny fraction of the overall damage, as much of it will be uninsured. Palazola estimates that at $20 billion, the fire is “manageable” for the industry as a whole.
Strong numbers from Aritzia: We’ll be watching shares in Canadian fashion retailer Aritzia today, after the company’s earnings posted after the bell on Wednesday beat analyst expectations on most metrics. The company raised its net revenue guidance for the year to a range of up to $2.69 billion, well ahead of the high of $2.6 billion previously forecast. Adjusted earnings per share for the third quarter came in at 71 cents, up from 47 cents last year and better than the 62 cents that analysts were expecting. Same store sales grew by 6.6 per cent, well up from last year’s sluggish 0.5 per cent pace, and the company had 127 stores at the end of the quarter, an increase of 10 from this time last year.
Tilray misses on earnings: We’ll also keep an eye on shares in Tilray Brands, as the cannabis company posted second quarter earnings that missed expectations. Overall, net revenue came in at $210 million. That’s an increase of 8.7 per cent from last year but less than the $217 million the street was looking for. Cannabis revenue came in at $65.7 million, a decline of two per cent from last year. Revenue in the alcohol unit, however, was a surprise to the upside, with a 34 per cent increase to $63.1 million. At that level, that means the company is almost at the point where it is selling more booze than cannabis. Overall, Tilray’s loss per share came in at 10 cents, worse than last year’s seven cent loss and worse than the 3.9 cents that analysts were looking for.
Delta shares soaring after strong earnings: Shares in Delta Airlines are taking off this morning after profit at the U.S. air carrier beat expectations in the last three months of last year on strong demand for domestic and international travel. Even better for the airline, it forecast that momentum to continue into the first quarter of this year, which is typically a slow time for the industry. Revenue is forecast to be nine per cent higher this quarter than it was in the first three months of 2024. The shares are up by more than seven per cent premarket, and the optimism is dragging shares in rivals like United, American and Southwest skyward too, on the assumption their upcoming numbers will match the performance.