Yahoo Finance Top headlines: Lululemon to join S&P 500, adding to stock's winning year
Today’s top headlines
Tourmaline Oil announces deal to buy Bonavista Energy worth $1.45 billion
Bank of Canada won’t rule out higher rates amid rising geopolitical risks
4:34 p.m.
Market close: TSX gains more than 150 points, U.S. markets also climb
Strength in base metal, financial and technology stocks helped lead a broad-based rally, with Canada’s main stock index rising more than 150 points while U.S. stock markets also climbed higher.
The S&P/TSX composite index was up 157.94 points at 19,620.80.
In New York, the Dow Jones industrial average was up 314.25 points at 33,984.54. The S&P 500 index was up 45.85 points at 4,373.63,while the Nasdaq composite was up 160.75 points at 13,567.98.
The Canadian dollar traded for 73.43 cents U.S. compared with 73.20 cents U.S. on Friday.
The November crude contract was down US$1.03 at US$86.66 per barrel and the November natural gas contract was down 13 cents at US$3.11 per mmBTU.
The December gold contract was down US$7.20 at US$1,934.30 an ounceand the December copper contract was up a penny at US$3.58 a pound.
The Canadian Press
Read more: BlackBerry basks in AI glow: Here are Monday’s top 3 performers on the TSX
3:11 p.m.
Bell Media seeks appeal to CRTC’s renewal of broadcast licences
After asking the federal telecommunications regulator to waive local news and Canadian programming requirements for its television stations, BCE Inc.’s media arm is seeking to appeal a CRTC decision that renewed its broadcast licences for three more years.
In an application to the Federal Court of Appeal, Bell Media says the renewal happened without a public hearing and could result in the regulator prejudging the issues it outlined in its applications to the CRTC last June.
The CRTC released the decision Aug. 8 announcing the administrative renewals of broadcasting licences for major companies including Bell until August 2026.
Bell’s asks on programming, which have yet to be ruled upon by the CRTC, include reducing its spending obligation on Canadian content and dropping requirements for a set number of hours per week of local news broadcasting.
It has said its local television stations and broadcast news services are under financial strain that requires regulatory action.
The CRTC did not immediately respond to a request for comment.
The Canadian Press
2:17 p.m.
Stellantis, union negotiations begin Tuesday and could be toughest of Big Three
Unifor is set to begin negotiations with Stellantis after union members at GM voted 80.5 per cent in favour of a tentative deal over the weekend.
Dave Cassidy, president of Local 444 that covers the Stellantis plant in Windsor, Ont., says he expects to sit down with the Unifor national committee and the company on Tuesday.
While union members at GM voted overwhelmingly in favour of the deal, Cassidy says he’s heard from Stellantis members that they’re not happy with the proposed terms and so he’ll be looking to secure a deal that they will support.
Talk of seeking a better deal comes as Unifor national president Lana Payne has emphasized the importance of pattern bargaining, where the terms the union reaches with one automaker are then imposed on other companies.
Larry Savage, a labour studies professor at Brock University in St. Catharines, Ont., says the talks ahead will be especially tricky for Payne since Stellantis is expected to be the most resistant to the contract terms, while she will also have to deal with pushback from the local level.
The Canadian Press
1:53 p.m.
‘Bizarre’ that Canada lagging on sustainable aviation: Airbus Canada CEO
The chief executive of Airbus Canada says the country possesses the key factors to place it at the cutting edge of sustainable jet fuel innovation — making it all the more “bizarre” that Canada lags behind the United States and Europe on this front.
Benoit Schultz, who heads the Canadian wing of the plane-making giant, says the country’s long history of resource development, renewable energy, agriculture and aircraft manufacturing leave it ideally placed to lead developments around sustainable aviation fuel.
However, Canada has yet to commercially produce a drop of the stuff — often derived from used cooking oils or organic waste — while the U.S. has embarked on an ambitious incentives program and the European Union has set a timeline for green fuel thresholds.
Deborah Flint, who heads the Greater Toronto Airports Authority, says the industry faces an “existential threat” if it does not work to decarbonize quickly, given the current cost of sustainable fuel and the rising need to deploy it amid stricter government rules and a heating planet.
Production rates for sustainable aviation fuel amount to roughly one per cent of global demand for jet fuel, which costs about one-fourth the price as its greener alternative.
The aviation industry, which has set a goal of net-zero emissions by 2050, is calling for more international co-ordination to establish standards and fund improvements, such as those targeted by the federal government’s $350-million pledge to support aerospace decarbonization earlier this year.
The Canadian Press
1:29 p.m.
B.C. to bring in new rules on short-term rentals to create more housing
The B.C. government has introduced legislation that would rein in what it says is a rapidly expanding short-term rental market.
Premier David Eby says the number of short-term rentals has ballooned in recent years and the government is taking action to reduce “profit-driven mini-hotel operators” by bringing in new enforcement tools.
Housing Minister Ravi Kahlon introduced the bill in the legislature today, saying there has been “an explosion” of short-term rental units and this legislation will target areas with high housing needs.
The legislation would force short-term rental platforms to share their data with the province for enforcement and tax purposes, and would limit short-term rentals to within a host’s own home, or a basement suite or laneway home on their property.
Most of the rules will apply to communities that have a population of 10,000 or more, and a provincial host and platform registry will be established by late next year.
The government says short-term rental listings on online platforms, such as Airbnb, VRBO, Expedia and FlipKey, have expanded rapidly since the COVID-19 pandemic and are now at an all-time high.
The Canadian Press
12:48 p.m.
Dairy Farmers of Canada recommend delaying farmgate milk price adjustment
The Dairy Farmers of Canada are recommending that an upcoming adjustment to the farmgate price of milk be delayed amid ongoing food inflation and pressure on the food industry to stabilize prices.
In a statement on their website, Dairy Farmers of Canada president David Wiens said the organization recommends that the Canadian Dairy Commission delay any price adjustment on milk until further notice.
The recommendation comes after the Canadian Federation of Independent Grocers last week called for a pause on any further increases to milk prices.
The Canadian Dairy Commission is a Crown corporation that reviews the price dairy farmers are paid for their milk every fall, with adjustments to that price made in February.
This year, the commission’s formula determined that price could go up 1.77 per cent in February.
However, if one or more stakeholders invoke an “exceptional circumstance mechanism,” which the independent grocers did, the price adjustment will instead be set through consultations.
The Canadian Press
12:35 p.m.
Lululemon’s S&P 500 addition stands to bolster stock domination
Lululemon Athletica Inc. climbed Monday following news that the athleisure company will join the S&P 500 Index, putting the stock on track to gain for a seventh straight session and extending its outperformance this year.
The stock rose as much as 10 per cent, its largest intraday gain in more than four months, after an announcement Friday that the company will join the major equity benchmark prior to the opening of trading on Oct. 18. If the jump holds, it will be the retailer’s longest streak of gains since June.
Inclusion in the S&P 500 adds to an already winning year for Lululemon, which has advanced 29 per cent, besting the broader market, which is up 14 per cent in 2023, and the S&P Retail Select Industry Index, down nearly one per cent for that period.
“We look upon the addition of shares to the major index as a potential catalyst for incremental interest and buying,” Oppenheimer analyst Brian Nagel wrote in a note to clients.
Higher income consumers’ willingness to keep spending on popular apparel brands like Lululemon and Abercrombie & Fitch Co. despite economic uncertainty has lifted shares. Lululemon raised its annual sales and profit projections when it reported earnings at the end of August.
Overall, Wall Street is positive on the retailer, with 27 analysts giving it a buy rating, six holds and three sells, according to data compiled by Bloomberg. Still, the average price target for Lululemon is about US$431, signalling just four per cent return potential over the next 12 months.
Some analysts also see Lululemon as positioned to gain from a wider adoption of GLP-1 drugs, such as Ozempic and Wegovy, for weight loss. Bank of America Corp. analyst Lorraine Hutchinson said earlier this month that weight loss in the broader population could drive a wardrobe replacement cycle, and she sees young adult and athletic lifestyle brands including Lululemon, Urban Outfitters Inc. and Deckers Outdoor Corp. as the most likely beneficiaries of that potential shopping.
Lululemon will replace Activision Blizzard Inc., now owned by Microsoft Corp., in the index, S&P Dow Jones Indices said.
Separately, Hubbell Inc. will replace Organon & Co. in the S&P 500, S&P Dow Jones Indices said. Hubbell is “more representative of the large-cap market space,” than Organon, which will be moved to the S&P SmallCap 600.
Hubbell shares rose as much as 4.5 per cent today and are up 30 per cent so far this year.
Bloomberg
12:15 p.m.
Summer storms in Ontario caused over $340 million in insured damages: IBC
The Insurance Bureau of Canada says severe storms and flash floods in Ontario this summer caused more than $340 million in insured losses, according to initial estimates.
The estimate from Catastrophe Indices and Quantification Inc. found that almost a quarter of these losses went toward repairing or replacing storm-damaged vehicles.
IBC says the Ottawa region was hit hardest by the summer storms.
It says that the frequency and severity of flooding and severe storms in Ontario and across Canada is increasing each year.
IBC says five storms in total were designated as catastrophes, meaning they’re estimated to have caused more than $30 million in insured damages.
The effects of these storms in July and August included hailstones, flooding and tornadoes.
The Canadian Press
11:47 a.m.
Midday markets: TSX up nearly 200 points, U.S. stock markets also higher
Strength in the base metal and technology stocks helped lead a broad-based rally as Canada’s main stock index rose nearly 200 points in late-morning trading, while U.S. stock markets also climbed higher.
The S&P/TSX composite index was up 180.22 points at 19,643.08.
In New York, the Dow Jones industrial average was up 392.41 points at 34,062.70. The S&P 500 index was up 48.95 points at 4,376.73, while the Nasdaq composite was up 147.25 points at 13,554.48.
The Canadian dollar traded for 73.40 cents U.S. compared with 73.20 cents U.S. on Friday.
The November crude contract was down 64 cents at US$87.05 per barrel and the November natural gas contract was down 16 cents at US$3.08 per mmBTU.
The December gold contract was down US$8.50 at US$1,933 an ounce and the December copper contract was up a penny at US$3.58 a pound.
The Canadian Press
11:05 a.m.
Firms still plan larger, more frequent price increases than usual, Bank of Canada survey says
Businesses are still planning to make larger and more frequent price increases than usual over the next 12 months, according to the Bank of Canada quarterly business outlook survey.
The survey released Oct. 16 said pricing practices of roughly half of businesses are not yet back to normal.
Bank of Canada said firms expect to raise their selling prices at a slower rate than in the past 12 months as the pace of increases in their input costs slows.
It said some firms are still passing higher costs faced earlier in the pandemic onto customers. These uncommonly large cost increases were due to supply chain issues, strong demand and large wage increases, the survey said.
Denise Paglinawan
10:32 a.m.
A&W launches reusable, exchangeable cup program to tackle single-use cup waste
A&W Food Services of Canada Inc. says it’s launching an exchangeable and reusable cup program across the country in a bid to reduce waste.
The Vancouver-based fast food chain says its new A&W One Cup program will allow customers to pay $3 for an exchangeable cup when they order a beverage.
When they return to the chain for a drink again, A&W will exchange the cup for a cleaned and sanitized one and give the customer a 20-cent discount.
Cups can be exchanged at any A&W locations that serve drinks in the company’s glass mugs.
The company says the program’s goal is to fight waste by tackling the more than one billion single-use cups that end up in landfills in Canada every year.
A pilot of the program has so far prevented more than 55,000 cups from ending up in landfills. That figure is expected to reach the millions in the first year with the program’s expansion, according to the company.
The Canadian Press
9:50 a.m.
Stocks push higher as markets open
U.S. stocks are pushing higher after the opening bell. The S&P 500 was 0.4 per cent higher early Monday. The Dow Jones Industrial Average rose 220 points, and the Nasdaq composite rose 0.4 per cent. The TSX was up two points.
Treasury yields were edging higher after tumbling last week on worries that fighting in Gaza will escalate. The price of gold also slipped as last week’s flight toward safer investments waned a bit. Crude oil prices were mixed after a volatile week spurred by worries that the war could result in disruptions to supplies from Iran or other big producers.
The Associated Press
9:40 a.m.
More signs of Canada’s slowing economy
Manufacturing sales for Canada in August were weaker than expected, data showed today.
The 0.7 per cent increase was mostly driven by prices, especially in the petroleum and coal sector, and volumes were down 0.7 per cent, said CIBC economist Andrew Grantham.
Grantham said these sales and data on wholesale trade, which rose 2.3 per cent, are in line with the early estimate of muted growth in gross domestic product for August of 0.1 per cent.
Financial Post
8:54 a.m.
Tourmaline Oil to buy Bonavista Energy in $1.45 billion deal
Tourmaline Oil Corp. announced an agreement Monday to buy Bonavista Energy Corp. in a deal worth $1.45 billion.
Under the acquisition, Tourmaline Oil will pay $725 million in shares and $725 million in cash, less Bonavista’s net debt at closing.
Tourmaline said the deal represents an important component of the company’s ongoing consolidation strategy, adding decades of inventory and supplementing its existing Deep Basin assets in Alberta.
“The Bonavista assets are a natural extension of Tourmaline’s existing operations in the Deep Basin where the company is already the largest producer,” Tourmaline said in a statement.
The deal is expected to close in the second half of November, subject to customary regulatory and stock exchange approvals.
In addition to the acquisition, Tourmaline announced that it will increase its quarterly base dividend effective in the fourth quarter to $1.12 per share on an annualized basis, up from $1.04 per share.
The Tourmaline board also declared a special dividend of $1.00 per share that will be paid on Nov. 1, to shareholders of record on Oct. 24.
The Canadian Press
8:29 a.m.
Ontario to introduce bill to return lands to Greenbelt
Ontario’s municipal affairs and housing minister is expected to introduce legislation Monday to return parcels of land to the protected Greenbelt.
Premier Doug Ford’s government announced in November 2022 that it was removing 15 sites from the Greenbelt in order to build 50,000 homes.
But after months of public outcry, and reports from both the auditor general and the integrity commissioner that found the process favoured certain developers, Ford said last month that he was reversing his plan and promised not to remove any more land from the Greenbelt.
Municipal Affairs and Housing Minister Paul Calandra, who took over the file after Steve Clark resigned last month, has said he will be returning the lands through a new bill that will also codify the boundaries of the Greenbelt in law.
That means that any future changes would have to go through the legislature, and could not just be done by regulation — as the Tories did last year.
The legislation is set to be introduced just days after the RCMP announced it had launched an investigation into the government’s decision to open up parts of the Greenbelt for development.
The Canadian Press
8:14 a.m.
Private equity firm Blue Wolf Capital to buy Logistec in $1.2 billion deal
A private equity firm has signed an agreement to buy Logistec Corp. in an acquisition that values the Quebec-based company at about $1.2 billion.
Under the deal, Blue Wolf Capital Partners LLC in partnership with Stonepeak, an alternative investment firm specialized in infrastructure and real assets, will pay $67 per share in cash for the company.
Logistec says the agreement is the culmination of a review of strategic alternatives that it launched on May 19 at the request of its principal shareholder, Sumanic Investments Inc.
The company’s class B subordinate voting shares closed down 28 cents at $57.32 on the Toronto Stock Exchange on Friday.
Montreal-based Logistec provides specialized cargo handling services in 60 ports and 90 terminals in North America. It also has an environmental services business focused on rehabilitating water infrastructure and remediating soil.
The transaction, which is subject to customary closing conditions, including regulatory, shareholder and court approvals, is expected to close in the first quarter of 2024.
The Canadian Press
7:18 a.m.
Shell hits record as new CEO makes most of high oil prices
Shell PLC shares hit a record high as rising energy prices and the new chief executive’s stronger focus on the core oil and gas business attracted investors.
Shares of the company rose as high as 2,763 pence in London today, marking a threefold increase from the pandemic-era low of 878.3 pence three years ago.
The price recovery follows a series of strategic pivots by Shell under different leaders. As oil and gas prices collapsed during the lockdowns of the COVID-19 pandemic, then-chief executive Ben van Beurden slashed the company’s dividend by two-thirds, accelerated its shift to cleaner forms of energy and pledged to hit net zero greenhouse gas emissions by 2050.
Van Beurden’s successor in the top job, Wael Sawan, has maintained the mid-century carbon target but is directing a greater proportion of the company’s investment into oil and gas. He is seeking to win over investors with higher returns stemming from a “ruthless” focus on performance and financial discipline.
The rally in Shell shares has been driven by higher commodity prices, particularly for natural gas in Europe, “and the strategic changes announced by the new CEO in June, which is likely drawing in more investors,” said Morningstar analyst Allen Good.
However, Good points to “currency issues” as also being part of Shell’s rise. “U.S. dollar-based shares remain below their highs, so part of the move is lower pound and euro.”
Bloomberg
Stock markets: Before the opening bell
U.S. equity futures fluctuated and Treasuries dropped as caution prevailed amid diplomatic efforts to contain the Israel-Hamas conflict.
Markets were broadly calmer today after last week’s rush into haven assets, as investors await further developments in the Middle East. The war is an additional concern for traders already busy interpreting the outlook for the economy and interest rates, just as the latest earnings reporting season gets into full swing.
S&P 500 contracts and those for the Nasdaq 100 steadied after declines on Wall Street at the end of last week. Pfizer Inc. fell in pre-market after the pharmaceutical giant slashed its revenue and earnings forecasts. Apple Inc. dropped after a study pointed to disappointing sales of the new iPhone. European energy stocks were boosted by recent gains in oil prices, with Shell PLC hitting a record high.
Treasury 10-year yields rose, clawing back some of last week’s 19 basis-point drop. Brent crude oil held near US$91 a barrel, after surging almost six per cent on Friday. Gold fell.
What to watch today
The Bank of Canada will release its business outlook survey and Canadian survey of consumer expectations today, ahead of the Bank’s interest rate decision and monetary policy report on Oct. 25.
Suncor Energy chief executive Rich Kruger is to appear before lawmakers in Ottawa today to explain remarks he made to investors in August concerning the company’s need to refocus on its key oilsands assets.
Today’s Data: Canada’s manufacturing sales and orders and wholesale trade, both for August.
Earnings: Charles Schwab Corp.
Need a refresher on yesterday’s top headlines? Get caught up here.
Additional reporting by The Canadian Press, Associated Press and Bloomberg
