TOP NEWS • ANALYSIS-Investors brace for recession, more market turmoil after Fed's supersized hike Investors' faith in a soft landing for the U.S. economy is being heavily tested, as a jumbo-sized interest rate hike from the Federal Reserve stirs worries over recession and more volatile trading ahead.
• Biden blasts oil refiners for record profits on pain at the pump U.S. President Joe Biden, under pressure over sky-high gasoline prices, on Wednesday demanded oil refining companies explain why they are not putting more fuel on the market as they reap windfall profits.
• Elon Musk expected to confirm desire to own Twitter in meeting Thursday – WSJ Elon Musk is expected to reiterate his desire to own Twitter when he speaks to the social-media company's employees, the Wall Street Journal reported, citing a person familiar with the matter.
• Revlon files for bankruptcy as online beauty race takes toll Revlon has filed for bankruptcy after the U.S cosmetics firm buckled under debts it built up in efforts to compete with online-focused upstarts.
• McDonald's agrees to pay $1.3 billion to settle French tax dispute McDonald's has agreed to pay $1.3 billion in fines and back taxes to settle a tax dispute in France, ending a long-running probe into whether the U.S. burger chain had properly declared all of its income in the country.
BEFORE THE BELL Futures for Canada's main stock index fell, tracking Wall Street futures as fears of a recession grew after the Federal Reserve's biggest rate hike in nearly three decades. European stocks tumbled after a surprise interest rate hike from Swiss National Bank which fuelled fresh worries about the impact of inflation on the global economy. In Asian equity markets, Japan's Nikkei and Chinese shares ended lower. The U.S. dollar dipped, while gold prices were mixed. Oil prices fell.
STOCKS TO WATCH • Canadian National Railway Co: The Montreal-based rail service provider said a union representing about 750 workers in the country could potentially go on a strike on June 18. The company said that it had received a strike notice from the International Brotherhood of Electrical Workers (IBEW), with a 72-hour notice period. The company has also offered to resolve the remaining differences, which are predominantly on wages and benefits, through binding arbitration. Canadian National Railway faced a major eight-day railway labour strike back in 2019.
ANALYSIS Investors worry that U.S. profit forecasts are too high Concerns are growing that U.S. corporate earnings are increasingly at risk from dizzying inflation, a strong dollar and rising interest rates, complicating the outlook for investors already reeling from the S&P 500's bear market confirmation earlier this week.
ANALYSTS' RECOMMENDATION • Hexo Corp: CIBC cuts target price to C$0.2 from C$0.7, after the company’s operations worsened in the third quarter.
• High Tide Inc: ATB Capital Markets cuts target price to C$12 from C$13.25, after the company’s whole sales and international retail sales declined in the second quarter due to supply chain concerns.
• Kinross Gold Corp: National Bank of Canada raises target price to C$13 from C$12, following the sale of the company’s Russian assets and expecting a re-rating.
ECONOMIC EVENTS (All timings in U.S. Eastern Time) 0830 (approx.) Wholesale trade mm for April: Expected 0.2%; Prior 0.3%
COMPANIES REPORTING RESULTS June 16 & June 17: No major companies are scheduled to report.
CORPORATE EVENTS (All timings in U.S. Eastern Time) 1000 Descartes Systems Group Inc: Annual Shareholders Meeting 1100 Green Thumb Industries Inc: Annual Shareholders Meeting 1100 Obsidian Energy Ltd: Annual Shareholders Meeting 1100 Topaz Energy Corp: Annual Shareholders Meeting
EX-DIVIDENDS Canadian Natural Resources Ltd: Amount C$0.75
(All analysts' estimates are according to I/B/E/S Refinitiv data.)
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