Live news: Cascades to close three plants, affecting 310 workers

Today’s headlines

Top story

Cascades to close three plants, affecting 310 workers

The paper and packaging company says its corrugated medium mill in Trenton, Ont., that is currently idled will not restart operations, while converting plants in Belleville, Ont., and Newtown, Conn., will close by May 31.

It says it decided to close the facilities due to a combination of market conditions, higher operating costs, aging technology and the need for significant capital investment.
Cascades will work with the impacted employees to mitigate, where possible, the effect of the closures.

Employees who cannot or do not wish to relocate to other plants will receive support in their search for other employment, the company says.

Cascades will record $61 million in impairment and environmental obligation charges associated with the closures in the fourth quarter of its 2023 financial results as well as about $35 million in additional restructuring charges in the coming years.

— The Canadian Press

Noon

Midday markets: TSX falls almost 350 points as stocks rocked by U.S. inflation numbers

Canada’s main stock index was down almost 350 points in early afternoon trading in a broad-based decline, while U.S. stock markets also fell after a hotter-than-expected United States inflation report.

The S&P/TSX composite index was down 346.18 points, or 1.64 per cent, at 20,713.58.

In New York, the Dow Jones industrial average was down 444.47 points, 1.15 per cent, at 38,350.59. The S&P 500 index was down 51.38 points, 1.02 per cent, at 4,970.40, while the Nasdaq composite was down 225.78 points, 1.41 per cent, at 15,718.86.

The Canadian dollar traded for 73.73 cents US, down 0.82 per cent, compared with 74.35 cents US on Monday.

The March crude oil contract was up 1.24 per cent at US$77.87 per barrel and the March natural gas contract was down nine cents at US$1.68 per mmBTU.

The April gold contract was down 1.24 per cent at US$2,007.80 an ounce and the March copper contract was up less than a penny at US$3.73 a pound.

— The Canadian Press

10:45 a.m.

Ottawa unveils more housing deals with cities across the country

Minister of Housing Sean Fraser says the federal government will roll out more than 60 housing agreements with small and rural communities across the country over the next few weeks.

Fraser said in a news conference this morning that the deals are worth $176 million and will help build more than 50,000 housing units over the next decade.

Ottawa has been signing agreements directly with municipalities through its housing accelerator fund, which offers money in exchange for changes to bylaws and regulations that would support more homebuilding.

Fraser says on top of the deals for smaller communities, the federal government has reached 36 agreements to date that will help construct more than 500,000 housing units over the next decade.

That includes a deal with the city of Ottawa worth $176 million announced on Monday.

— The Canadian Press

10:23 a.m.

Markets open: Stocks fall on inflation reality check

Wall Street got a reality check on Tuesday, with a hotter-than-estimated inflation data triggering a slide in both stocks and bonds.

Equities moved away from their all-time highs after the core consumer price index topped estimates and climbed the most in eight months. Treasuries sold off across the curve, with two-year yields hitting the highest since before the December United States Federal Reserve “pivot.” Fed swaps shifted the full pricing of a rate cut to July from June. And a measure of perceived risk in the U.S. investment-grade corporate bond market soared.

The consumer price index data came as a disappointment after a recent downdraft in price pressures that helped build expectations for rate cuts this year. Though the numbers give credence to the wait-and-see approach highlighted by Fed chair Jerome Powell and a drumbeat of central bank speakers.

In New York, the S&P 500 was down 1.44 per cent at 4,950.02. The Dow Jones industrial average fell 1.21 per cent to 38,327.85 while the Nasdaq composite was down 1.45 per cent 15,712.39

In Toronto, the S&P/TSX composite index fell 1.83 per cent 20,683.31.

— Bloomberg

9:32 a.m.

Tim Hortons parent Restaurant Brands reports Q4 profit and revenue up

The parent company of Tim Hortons, Burger King and other brands, which keeps its books in U.S. dollars, says its net income totalled US$726 million or $1.60 per diluted share.

The result was up from US$336 million or 74 cents US per diluted share for the last three months of 2022.

The company says the increase was driven by a larger income tax benefit and increased income from operations, partially offset by higher interest costs.

On an adjusted basis, Restaurant Brands says it earned 75 cents US per diluted share in its most recent quarter, up from 72 cents US per diluted share a year earlier.

Revenue totalled US$1.82 billion, up from US$1.69 billion in the same quarter a year earlier.

— The Canadian Press

9 a.m.

U.S. inflation slows but remains high

Tuesday’s report from the Labor Department showed that the consumer price index rose 0.3 per cent from December to January, up from a 0.2 per cent increase the previous month. Compared with a year ago, prices are up 3.1 per cent.

That is less than the 3.4 per cent figure in December and far below the 9.1 per cent inflation peak in mid-2022. Yet the latest reading is still well above the United States Federal Reserve’s two per cent target level at a time when public frustration with inflation has become a pivotal issue in President Joe Biden’s bid for re-election

Excluding the volatile food and energy categories, so-called core prices climbed 0.4 per cent last month, up from 0.3 per cent in December and 3.9 per cent over the past 12 months. Core inflation is watched especially closely because it typically provides a better read of where inflation is likely headed. The annual figure is the same as it was in December.

— The Associated Press

8 a.m.

Shopify profit and sales narrowly beat estimates, but shares fall

Revenue for the period rose 24 per cent to US$2.1 billion, beating the US$2.08-billion average estimate of analysts surveyed by Bloomberg. Profit, excluding one-time items, was 34 cents U.S. a share, above the 30-cent U.S. expectation.

Shopify fell about nine per cent in U.S. premarket trading. The company said it expects a free cash flow margin in the current quarter in the “high single digits,” while analysts were expecting 13.6 per cent. That miss “stands out as the only negative indicator and may be behind the stock dropping,” Anurag Rana, an analyst at Bloomberg Intelligence, wrote in a note.

Shopify said that revenue in the current quarter would grow at a “low-20s percentage rate.” The company said that would translate into a year-over-year rate in the mid-to-high twenties when adjusting for the sale of its logistics business.

The Ottawa-based company raised software prices for online merchants earlier this month, a move that’s expected to generate more than US$100 million in additional revenue this year without driving away many customers. Shopify is in its first year of a deal with Amazon.com Inc. to let merchants use its “Buy With Prime” delivery service. Shopify sold its own logistics business to freight-forwarding startup Flexport last year.

Gross merchandise volume, the overall value of merchant sales across Shopify’s systems, increased 23 per cent to US$75.1 billion, above Wall Street projections of US$71.6 billion.

— Spencer Soper, Bloomberg

7:30 a.m.

BlackBerry to cut more jobs, close offices to contain costs

The Waterloo, Ont.-based technology company said last quarter it cut around 200 jobs as part of efforts to slash costs.

This quarter, the company said it anticipates further job losses within its cybersecurity business, which it expects to generate annualized savings of around US$27 million.

It’s also taking other steps to save money, including exiting six of its 36 global office locations.

The company said it expects to return to positive cash flow by the fourth quarter of its 2025 financial year.

BlackBerry reported a loss of US$21 million in its third quarter ended Nov. 30.

— The Canadian Press

7:30 a.m.

Stock markets before the opening bell

United States equity futures slumped before the release of keenly awaited inflation data that could set the stage for the timing of the Federal Reserve move to interest-rate cuts. Treasuries rose.

Contracts on the rate-sensitive Nasdaq 100 slid 0.6 per cent while those on the S&P 500 fell 0.4 per cent, extending Monday’s decline in the main U.S. stock gauge from a high of near 5,050. Nvidia Corp. dropped one per cent in premarket trading.

The inflation report, which is expected to show the first reading below three per cent on year-over-year headline inflation since March 2021, may not be enough to justify a more rapid shift to monetary easing. Employment, manufacturing and economic growth in the U.S. have surprised on the upside, proving resilient to the fastest rate increases in a generation.

“Despite expecting CPI to print below three per cent later, we still think the market is over-exuberant when it comes to when that first cut comes in,” Grace Peters, head of global investment strategy at JPMorgan Private Bank, said in an interview with Bloomberg TV.

The S&P/TSX composite index closed up 0.27 per cent on Monday.

— Bloomberg

What to watch today

The CRTC hosts a five-day hearing for its review of the wholesale high-speed access framework.

Finance Minister Chrystia Freeland will provide an update on the government’s economic plan in Ottawa in. Housing Minister Sean Fraser, Employment Minister Randy Boissonnault and Gudie Hutchings, minister of rural economic development, will join her.

The Financial Accountability Office of Ontario will release a report that provides an updated outlook for the provincial economy and the province’s finances on the website at fao-on.org/en. At 10 a.m. senior officials from the FAO will provide a brief presentation and answer technical questions.

Fresh U.S. inflation data drops this morning with the release of the consumer price index for January.

Companies reporting earnings today include Shopify Inc., Restaurant Brands International Inc., Hydro One Ltd., Coca-Cola Co., Airbnb Inc., Moody’s Corp. and Dream Industrial Real Estate Investment Trust.

Additional reporting by The Canadian Press, Associated Press and Bloomberg