5 things you need to know for the trading day
Here are five things you need to know this morning:
Who’s waiting for rate cuts?: Home sales in Toronto surged in January compared to December, according to the latest from the Toronto Regional Real Estate Board. However, prices were down 1.2 per cent and slipped for the sixth straight month. Still, this resurgence in activity comes before a widely expected rate cut at some point this year. We will watch for commentary from Bank of Canada Governor Tiff Macklem who speaks today at 1 p.m. ET on the effectiveness and limits of monetary policy. It’s interesting that the surge in sales activity comes even with a ban on foreign homebuyers in place. The ban was extended by two years over the weekend, which prompted a rather spicy take from Scotia’s Derek Holt, who called it it “purely xenophobic.” He’ll elaborate this morning in an 11:40 a.m. ET interview on Morning Markets.
AI earnings: We got earnings from AI plays Palantir and Coveo. Palantir shares were surging this morning after the company posted its first annual profit and touted an “onslaught” of AI interest from customers. Dan Ives at Wedbush called Palantir an “undiscovered gem” in the AI revolution. Not everyone is convinced. RBC has a “sell” on the stock and noted sales to the government were weaker than expected (though they still make up more than half the business). These debates are what make a market! On the TSX, we will watch shares of Coveo. Earnings beat expectations and the company modestly raised its 2024 forecasts. Their generative AI solution for businesses is a key driver, with BMO noting it drove 20 per cent of bookings. We will get more colour from the CEO who will be on The Open at 10:40 a.m. ET.
The AI of biotech: Shares of Eli Lilly are poised to open at yet another all-time high. The maker of diet and obesity drugs managed to beat expectations and offer a better-than-expected forecast. Hard to believe that it could beat expectations given the stock’s parabolic 110-per-cent increase over the past year. The gains this morning continue to solidify Lilly as the most valuable biotech on the planet.
Precision Drilling: Shares of the oilfield driller will be in focus after reporting an increase in profit and a drop in revenue that was less than expected. Analysts are taking comfort in this, and the high cash flow that is largely expected to go into shareholders’ pockets and to pay down debt. The company forecasted an uptick in drilling activity in the U.S. for 2024. It’s a pretty universally loved stock on Bay Street. RBC calls its valuation undemanding and expects the stock will outperform today.
Are you not amused?: I could picture TMX executives saying this to the gaggle of analysts that cover the stock, given it is trading at all-time highs and doesn’t have a single buy rating. The operator of the Toronto Stock Exchange posted an increase in core profits and top line growth on the back of strength in its energy trading and derivatives businesses. They are also expanding further into the U.S. and some analysts are looking for more colour on how much that will be. The CEO will be on BNN Bloomberg this morning at 9:40 a.m. ET.