Everything You Need to Know on Thursday: Copper's Downward Trend Continues as High Prices Repel Chinese Purchasers
Good morning mooers! Here are things you need to know about today's market:
● S&P/TSX 60 Index Standard Futures are trading at 1,347.70, up 0.64%
● Copper's downward trend continues as high prices repel Chinese purchasers
● Imperial starts production at new oilsands project using lower-emissions technology
● TD Bank earnings dented by provisions, restructuring and rise in non-interest expenses
Market Snapshot
Today, the Canadian dollar is trading at 73.19 cents US, a slight increase from Wednesday.
S&P/TSX 60 Index Standard Futures are trading at 1,347.70, up 0.64% from previous close.
Commodities
Copper's Downward Trend Continues as High Prices Repel Chinese Purchasers
Copper's price experienced a decline for the third consecutive session, with resistance from Chinese manufacturers who are reluctant to accept the unprecedented high costs. Statements from U.S. Federal Reserve officials suggesting a more aggressive stance also added downward pressure on the metal.
The commodity has seen its value decrease by approximately seven percent from the record high set on Monday, as a wave of bullish trading forced those in short positions to exit. Wednesday marked copper's steepest drop within a single day in nearly two years, as profit-taking by investors with bullish sentiments coincided with fresh indications of declining demand in China.
Manufacturers in China, which is the leading consumer of metals globally, are facing difficulties in transferring the rising expenses of copper onto their customers, whose products span from air conditioners to domestic electronics.
Meanwhile, in the U.S., the May Federal Open Market Committee meeting minutes revealed worries about less-than-expected price rises. The Federal Reserve signaled that it might maintain higher interest rates for a more prolonged period if inflation does not consistently approach its two percent objective. Persisting with higher interest rates could potentially hinder worldwide economic growth.
Stocks to watch
Imperial Starts Production at New Oilsands Project Using Lower-Emissions Technology
$Imperial Oil Ltd (IMO.CA)$ has announced the start of production at its Grand Rapids oilsands project within the Cold Lake operations area. The company anticipates a gradual increase in production at Grand Rapids over the next few months, aiming for a target of 15,000 barrels of oil per day at full capacity.
The Canadian oilsands sector faces challenges to lower its emissions footprint. Although oilsands operators have managed to diminish the greenhouse gas emissions per barrel by implementing new technologies and enhancing efficiencies, the industry's total emissions impact continues to grow as a result of escalating production levels.
TD Bank Earnings Dented by Provisions, Restructuring and Rise in Non-interest Expenses
$The Toronto-Dominion Bank (TD.CA)$ logged a sharp drop in quarterly earnings as the Canadian lender was squeezed by provisions, restructuring charges and increases in non-interest expenses and credit-loss provisions. Fiscal second-quarter net income fell to 2.56 billion Canadian dollars, or C$1.35 a share, from C$3.31 billion, or C$1.69, a year earlier. Ahead of the release of its results, TD Bank warned of an initial $450 million provision to cover potential charges it could face in the U.S. related to failings in its anti-money laundering efforts, and said it could face additional penalties as talks with three regulators and the Justice Department continued. The bank said it also recorded a C$205 million after-tax provision for a civil matter provision and litigation settlement.
TD Bank booked C$122 million in after-tax restructuring charges for the latest quarter, which adds to the previous quarter's C$213 million restructuring cost. Reported expenses were 24% higher than in the same quarter a year ago at C$8.4 billion, reflecting the provisions and charges, as well as investment in risk and control infrastructure and other items.
Source: BNN Bloomberg
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