Jan 26, 2023
The Daily Chase: Tesla climbs in the premarket; Canfor restructures B.C operations
First Look With Surveillance: Tesla Beats, NYSE Mayhem
Shares of Tesla are gaining ground in the premarket – up more than seven per cent – after the company reported record fourth-quarter revenue and topped profit expectations in Q4, in spite of some margin compression. The company is also teasing the potential for a significant ramp-up in production, with CEO Elon Musk saying there's potential to produce two million vehicles this year as the company increases output “as quickly as possible” – including bringing the Cybertruck to market in 2023. Now, keep in mind that it's not exactly been all rosy at the EV-maker lately – Tesla has slashed prices by about 20 per cent and has struggled with lockdowns in China hampering production overseas and some logistical issues that have weighed on operations. Those problems have been clearly reflected in the company's share price, which is down 65 per cent from its November 2021 peak.
PRIME RATES HIT HIGHEST LEVEL SINCE 2001
Well, it didn't take long for Canada's largest lenders to respond in kind to the Bank of Canada's latest rate increase. The Big Six were swift to match the central bank's quarter percentage point increase, responding in kind by matching said hike by boosting their own prime rates by 25-basis-points across the board to 6.70 per cent – the highest level since early 2001. The implications are clear for Canadian consumers who have already been facing a steep rise in the cost of borrowing, as the prime rate underpins a slate of lending products, including lines of credit and variable-rate mortgages.
CANFOR RESTRUCTURING B.C. OPERATIONS
The tough lumber-market conditions are again on full display over at Canfor. The company says its restructuring its British Columbian operations, permanently closing its Chetwynd sawmill and putting it Houston sawmill temporarily on ice to execute a “major” redevelopment on the site. Both facilities will be shuttered by the end of the second quarter, removing 750 million board feet from Canfor's annual production. The moves come in the wake of Canfor temporarily curtailing output at all of its solid wood facilities in B.C. in Alberta, which took about 150 million board feet of production offline.
NATURAL GAS FALLS BELOW US$3
What a wild ride on the gas markets over the last six months and change. Prices for U.S. natural gas have dipped below US$3 per million BTU this morning, falling below that mark for the first time since May 2021 (not to mention down 70 per cent or so from August 2022's highs.) Few factors at play here, namely the mild winter weather we've been seeing across the Northern Hemisphere so far this year, along with a longer-than-expected shutdown of that massive Freeport LNG export terminal in Texas constraining U.S. exports and keeping supplies on shore.
OTHER NOTABLE STORIES
- Coastal Gaslink – the company building that natural gas pipeline spanning Northern B.C. – has been fined for a third time for failing to comply with the requirements of its environmental assessment certificate.
- The New York Stock Exchange says a manual error caused those wild price swings and trading halts in hundred of stocks in early trading Tuesday, due to an issue with the exchange's “disaster recovery configuration.”
- IBM is joining the ranks of big tech firms slashing jobs, announcing plans to eliminate about 3,900 positions, or about 1.5 per cent of its global workforce.
- Shares of Diageo are under pressure – down six per cent or so – after the booze purveyor reported a slowdown in sales in North America.
- RBC is trimming its price target on shares of Cineplex to $12 (from $13) due to concerns over lower attendance in the fourth quarter, but still says the company is among its top picks in the media industry.
- Notable data: Survey of Employment, Payrolls and Hours, U.S. Initial Jobless Claims, U.S. Real GDP, U.S. Advance Economic Indicators Report, U.S. Durable Goods Orders, U.S. New Home Sales
- Notable earnings: MasterCard, Archer-Daniels-Midland, JetBlue Airways, Visa, Intel, Weyerhaeuser