By Ketki Saxena
Investing.com -- As risk sentiment remains dominant and a 75 bp move fully priced in at the Fed’s November meeting, North American equities reversed yesterday’s rally, which analysts note was supported by short-covering that helped indices rebound after hotter-than-expected US CPI data.
Bay Street economist David Rosenberg, of Rosenberg Research, writes “In our view, there was nothing fundamental about [yesterday’s] rally — it merely reflected an oversold bounce off a very key source of support, which brought out buyers.”
Buyers have retreated today, with all TSX sectors barring tech and financials in the red this morning. The commodity-heavy Canadian index was further pressured by the continued slide in crude, which remains pressured by worries of a global recession and declining fuel demand. Crude also remains pressured by increasing COVID-19 cases in China, the world's largest crude oil importer.
The Biggest Stories on Bay Street
Beyond Meat slashed announced it's cutting 19% of its headcount (about 200 jobs), and slashed its full-year revenue outlook as the plant-based protein market continues to face headwinds. Based upon preliminary results, the Company now expects third-quarter 2022 net revenues of approximately $82 million, a decrease of approximately 23% versus the prior-year period. Beyond Meat pointed to sector-wide weakness, increased competition, and inflation that is compelling consumers to switch to cheaper, meat alternatives.
Dye & Durham (TSX:DND) is in the news once more after its takeover of Link Administration Holdings fell apart a few weeks ago due to increasing regulatory hurdles and piling up costs. Dye & Durham is now planning to sell real etate services platform TM Group less a year after it acquired the company. The move to sell TMG was prompted by a U.K. regulatory decision. "TMG is a profitable and well-run technology company which is what attracted us to it originally. We are confident TMG will thrive in the hands of a new owner," said Matthew Proud, CEO of Dye & Durham.
Birchcliff Energy is going to pay a special dividend of $0.20 per share later this month as the company works towards its goal of zero total debt. Jeff Tonken, Birchcliff’s CEO, commented: “By the end of 2022, we expect to have retired approximately $840 million of total debt(1) and preferred shares since June 30, 2020, nearing our goal of zero total debt. As a result, our board of directors has declared a special cash dividend of $0.20 per common share (approximately $53 million in aggregate(2)) payable on October 28, 2022 and approved an $80 million increase(3) to our F&D capital budget for 2022.”
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In Canadian Economics
Statistics Canada reported that manufacturing sales fell 2.0% to $70.4 billion in August, the fourth consecutive month manufacturing sales declined. Lower sales were primarily due to petroleum and coal sales edging down on lower prices and volumes.
In a separate report, Statistics Canada reported that wholesale sales in August rose 1.4% o reach a new high of $81.3 billion. Gains were led by the miscellaneous goods subsector, which rose 3.9% to $12.8 billion.
The Canadian Real Estate Association said national home sales were down 3.9% on a monthly basis in September, and down 32.2% from September a year ago. The MLS home price index fell 1.4% month-over-month but was up 3.3% year-over year.