Here are five things you need to know this morning:
Calm before the storm: If you didn’t get a lot of rest this weekend, today is your last chance to fuel up ahead of a very busy calendar. In Canada, banks will start to report Tuesday, with Bank of Nova Scotia tomorrow and the rest peppered throughout this week. This Thursday we will get confirmation of whether Canada entered a recession, with a Statistics Canada read of September GDP and Q3 GDP. Jobs numbers come out on Friday, with the unemployment rate expected to rise to 5.8 per cent, which would be the highest rate since January 2022. Our American friends will be busy as well. The market will be asked to absorb some US$148 billion in new Treasury auctions. Wednesday is the U.S. Federal Reserve’s Beige Book, Thursday is the U.S. central bank’s preferred measure of inflation, Friday Fed Chair Jerome Powell speaks. Oh and by the way, ahead of all this, the volatility index is trading at the lowest level since before the pandemic began. Calm before the storm indeed.
Shop talk: Shares of Shopify are higher in the pre-market after the company said its merchants saw a 22 per cent increase in sales compared to last year’s Black Friday. Sales hit a record $4.1 billion. Shopify’s data captures all of its global sellers, but data from the U.S. is a little more subdued. MasterCard said sales were up only 2.5 per cent, but the growth in online was much better at 8.5 per cent. Adobe echoed the strength only with their data set suggest sales grew 7.5 per cent to hit a new record. All this to say, it seems the preference is to shop online versus in-store.
Hit the brakes: We will watch shares of CP Rail and CN Rail after an analyst downgrade this morning. Amit Mehrotra of Deutsche Bank is downgrading both the Canadian rails. A slowdown in Canadian consumers (I guess the Shopify data didn’t move him), headwinds in the grain markets and recent government intervention in Mexico are among the chief reasons for the downgrade. Recently, the Mexican government said it may soon require freight railroads to offer passenger services.
First Quantum headaches continue: First Quantum is starting the arbitration process in its dispute over mining rights in Panama. The Canadian firm has shut down operations in the country as its flagship copper project faces anti-mining protests and the government's cancellation of its permit. First Quantum says it remains committed to overcoming the current challenges through constructive and transparent dialogue. Shares closed at a fresh three-year low. Almost all analysts have First Quantum as a hold, but the price targets are still way above where the stock is trading. The average analyst price target sees this as a $27 per share stock compared to the $13 per share price right now.
Getting the boot: Shares of Foot Locker are under pressure in the pre-market after Citi cut the stock to sell. The analyst thinks the retailer will miss earnings expectations and post weaker sales and margins. He is also bracing for a possible profit warning. But the stock is already down nearly 40 per cent this year, so we will see if investors are willing to pick it up on even the slightest outperformance. Foot Locker reports on Wednesday.