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Strong Start for TSX

Baystreet.ca
·4 min read

Canada's main stock index opened higher on Thursday, aided by energy and industrial shares, although sentiment remained fragile amid concerns over slowing global economic growth.

The S&P/TSX exploded 122.47 points to start off Thursday at 20,506.22

The Canadian dollar nicked up 0.02 cents to 78.01 cents U.S.

Canadian Imperial Bank of Commerce missed analysts' estimates for quarterly profit on Thursday, on higher provisions for credit losses and expenses and lower investment banking revenue.

CIBC shares stepped back 63 cents to $69.47.

Telus International reportedly made and then abruptly withdrew a A$1.2-billion ($1.063-billion Canadian) buyout approach for Australian rival Appen Ltd. Shares in Telus International climbed 29 cents, or 1%, to $30.87.

Canaccord Genuity raised the target price on Bank of Montreal to $157.00 from $155.00. BMO shares moved ahead $1.03 to $133.80.

CIBC raises the rating on Richelieu Hardware to outperform from neutral.

National Bank of Canada raised the target
Price on Scotiabank to $91.00 from $90.00. Scotiabank shares jumped 70 cents to $84.45.

On the economic beat, Statistics Canada informed us retail sales were virtually unchanged in March. Sales were up in 10 of 11 subsectors, led by higher sales at gasoline stations.

Lower sales at motor vehicle and parts dealers erased the gains observed in the remaining subsectors.

Elsewhere, the number of employees receiving pay or benefits from their employer—measured by StatsCan’s Survey of Employment, Payrolls and Hours as payroll employment—increased by 118,100 (or 0.7%) in March.

ON BAYSTREET

The TSX Venture Exchange took on 5.03 points to 706.77.

All but two of the 12 TSX subgroups were positive in the first hour, with industrials rumbling 1.4%, consumer discretionary stocks prospering 1.1%, and energy better by 0.9%.

The two naysayers were materials, tailing off 0.1%, and communications, off a bit below breakeven.

ON WALLSTREET

Stocks rose Thursday, as Wall Street tried to rebound from a long string of weekly declines.

The Dow Jones Industrials screamed higher 425.04 points, or 1.3%, to open Thursday at 32,545.32.

The S&P 500 jumped 54.42 points, or 1.4%, to 4,033.15.

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The NASDAQ Composite popped 169.85 points, or 1.5%, to 11,604.59.

The Dow has fallen the last eight weeks, while the S&P 500 and NASDAQ are riding seven-week losing streaks.

The market seems to have somewhat regained its footing this week, as investors hope inflation is starting to peak and that there’s good value to be found at these levels. The Dow is up 4% and S&P 500 gained 3%. and the NASDAQ is ahead 2%.

The moves come after strong earnings from the retail sector gave a boost to investor sentiment, which was bruised by disappointing results from big-box retailers last week. Macy’s shares surged 16% after the company raised its 2022 profit outlook, and Williams-Sonoma rose 4% after beating estimates on the top and bottom lines.

Discount retailers Dollar Tree prospered 17% and Dollar General jumped 12%, after posting earnings beats.

PVH, Ralph Lauren and Ulta were also among the top performers in the S&P 500

On the flipside, shares of chipmaker Nvidia dropped 2% after the company delivered weaker-than-expected guidance for the second quarter and the company’s CFO said Nvidia would slow hiring.

Similarly, software stock Snowflake tumbled 12.5% after the company’s guidance for operating margin came in narrower than expected.

Elsewhere, Twitter shares jumped more than 4% after Elon Musk increased his commitment in his takeover bid to $33.5 billion, which analysts have said indicates a new seriousness and increased probability that he’ll complete the deal.

Chipmaker Broadcom announced plans to buy cloud company VMware in a $61 billion deal, which would be one of the biggest tech acquisitions of all time. Broadcom shares gained more than 1%, and VMWare rose slightly.

First-quarter gross domestic product declined at a 1.5% annual pace, worse than the 1.3% Dow Jones estimate and a writedown from the initially reported 1.4%, the Commerce Department reported Thursday.

Initial jobless claims for the week ending May 14 totaled 218,000, which was an increase from the previous period and slightly higher than the 215,000 estimate.

Treasury prices gained ground, lowering yields to 2.74% from Wednesday’s 2.76%. Treasury prices and yields move in opposite directions.

Oil prices hiked $2.52 to $112.85 U.S. a barrel.

Gold prices added 40 cents to $1,846.70 U.S. an ounce.