TOP NEWS
• Fed's Powell says no rate cuts this year, and markets hear it differently
Federal Reserve Chair Jerome Powell had a clear message on Wednesday: as "gratifying" as it is that inflation has begun to slow, the central bank is nowhere near to reversing course or declaring victory.
• Rogers revenue beats on wireless, media business strength
Canadian telecom operator Rogers Communications beat revenue estimates for fourth quarter, boosted by strength in its wireless and media businesses.
• Canada Goose cuts annual forecasts due to COVID-related disruptions in China
Canada Goose trimmed its full-year revenue forecast as COVID-induced restrictions weigh on sales of upscale jackets and parkas in China.
• Meta surges on cost cut, buyback plans; lifts mega-cap stocks
Shares of Meta Platforms soared in premarket trading as the Facebook parent wooed investors with plans to rein on costs and a new $40 billion share buyback.
• Merck fourth quarter tops expectations on strong COVID pill sales
Merck reported higher-than-expected fourth-quarter earnings on strong sales of its COVID-19 antiviral pill molnupiravir in Asia.
BEFORE THE BELL
Futures for Canada's main stock index rose as gold prices climbed to a nine-month high on a subdued U.S. dollar, while dovish comments from U.S. Federal Reserve Chair Jerome Powell boosted risk appetite globally. Nasdaq futures jumped as Meta Platforms surged after announcing rigorous cost controls. European shares climbed, led by tech and real-estate stocks, with the focus squarely on the European Central Bank's interest rate decision. Chinese stocks closed lower as investors awaited further signs of recovery in the pandemic-hit Chinese economy. Oil prices fell as looming sanctions on Russian oil products added uncertainty over supply.
STOCKS TO WATCH
• Canada Goose Holdings Inc: The company trimmed its full-year revenue forecast as COVID-induced restrictions weigh on sales of upscale jackets and parkas in China. The Toronto, Ontario-based company cut its fiscal 2023 sales expectations to about C$1.18 billion to C$1.20 billion, compared with its prior forecast of C$1.2 billion to C$1.3 billion. Analysts expect an annual revenue of about C$1.24 billion, IBES data from Refinitiv showed. The company forecast adjusted profit of between 92 Canadian cents and C$1.03 per share for fiscal 2023, compared with its prior target of C$1.31 to C$1.62. Analysts have forecast an annual profit of C$1.46 per share.
• Rogers Communications Inc: The Canadian telecom operator beat revenue estimates for fourth quarter, boosted by strength in its wireless and media businesses. Rogers' push to expand its 5G network and bundled subscriber plans has helped it win customers from rivals in a competitive market where wireless charges are among the highest in the world. The company added 193,000 monthly bill paying wireless phone subscribers in the fourth quarter, indicating robust demand for its 5G services. In the last quarter, it added 164,000 users. Total revenue increased 6% to C$4.17 billion in the quarter ended Dec. 31, inching past analysts' average estimate of C$4.15 billion, according to Refinitiv data.
INSIGHT
Corporate lawsuit dodge imperiled after court rejects J&J bankruptcy tactic
Attorney Greg Gordon, a partner at the Jones Day law firm, offered an innovative solution to Johnson & Johnson and other major companies that faced mountains of lawsuits alleging their products sickened or killed people: They could use the bankruptcy system to force all plaintiffs into one settlement.
ANALYSTS' RECOMMENDATION
• CGI Inc: RBC raises target price to C$145 from C$130, following the company's solid first-quarter earnings, owing to its stronger-than-expected organic growth.
• TCP Energy Corp: RBC cuts target price to C$65 from C$73, citing market’s concerns about the risk of future cost increases as well as looming inflationary pressures faced by multiple Canadian pipeline projects.
ECONOMIC EVENTS (All timings in U.S. Eastern Time)
0830 Building permits mm for Dec: Expected -5.0%; Prior 14.1%
COMPANIES REPORTING RESULTS
February 2:
BCE Inc: Expected Q4 earnings of 72 Canadian cents per share
Canada Goose Holdings Inc: Expected Q3 earnings of C$1.62 per share
Lightspeed Commerce Inc: Expected Q3 loss of 5 cents per share
Methanex Corp: Expected Q4 earnings of 51 cents per share
Open Text Corp: Expected Q2 earnings of 78 cents per share
Rogers Communications Inc: Expected Q4 earnings of 98 Canadian cents per share
CORPORATE EVENTS (All timings in U.S. Eastern Time)
0700 BCE Inc: Q4 earnings conference call
0800 Lightspeed Commerce Inc: Q3 earnings conference call
0800 Rogers Communications Inc: Q4 earnings conference call
0900 Canada Goose Holdings Inc: Q3 earnings conference call
1700 Open Text Corp: Q2 earnings conference call
EX-DIVIDENDS
MTY Food Group Inc: Amount C$0.25
United Corporations Ltd: Amount C$0.30
(All analysts' estimates are according to I/B/E/S Refinitiv data)
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