TOP NEWS • OPEC+ oil output cut ahead of winter fans inflation concerns Global oil supply is set to tighten, intensifying concerns over soaring inflation after the OPEC+ group of nations announced its largest supply cut since 2020 ahead of European Union embargoes on Russian energy.
• Weaker refining, gas trading to hit Shell's Q3 results Shell said its third-quarter profit would be pressured by a near halving of oil refining margins, crumbling chemical margins and weaker natural gas trading.
• Suncor to sell wind and solar assets to Canadian Utilities for C$730 million Suncor Energy said on Wednesday it would sell its wind and solar assets in Canada to Canadian Utilities for C$730 million.
• Apollo, Sixth Street no longer in talks to finance Twitter deal -sources Apollo Global Management and Sixth Street Partners, which had been looking to provide financing for Elon Musk's proposed $44 billion buyout of Twitter, are no longer in talks with the billionaire entrepreneur, said two sources familiar with the matter.
• Biden to tout IBM's $20 billion investment in New York over next decade President Biden will tout IBM's plans to invest $20 billion in New York over the next decade in development and manufacturing of semiconductors, mainframe technology, artifical intelligence and quantum computing.
BEFORE THE BELL Canada's main stock index futures were lower, tracking Wall Street futures and European shares, as investors anxiously await Friday's U.S. non-farm payrolls report for any signs of softness that could signal an eventual slowdown in Fed’s rate hikes. Japan's Nikkei index closed higher, helped by energy and chip-related stocks. The dollar index was up, while gold fell. Oil prices stabilized near three-week highs after OPEC+ agreed to further tighten global crude supply.
STOCKS TO WATCH • Canadian Utilities Ltd & Suncor Energy Inc: The energy company said on Wednesday it would sell its wind and solar assets in Canada to Canadian Utilities for C$730 million. The divestment will help focus on energy expansion, hydrogen and renewable fuels, Suncor said, as the company progresses to net-zero by 2050. The sale is expected to close in the first quarter of 2023. The deal will likely add to earnings and cash flow in 2023, Canadian Utilities, an ATCO company, said. The sale includes the new 202 megawatt (MW) Forty Mile wind project in Alberta, scheduled to be operational by the end of this year, and a majority interest in the Adelaide wind facility in Ontario.
• Nutrien Ltd: Fertilizer deliveries to Brazilian farmers could fall between 5% and 7% this year, an executive at Brazilian trade group Anda said on Wednesday, citing figures from analysts and industry estimates. Anda, which represents global suppliers including Nutrien and Mosaic, said farmers have delayed purchases or decided not to buy fertilizer this season amid a rise in prices sparked by Russia's invasion of Ukraine. After the conflict began, Brazil hurried to secure supplies, as it depends on imports for 85% of its domestic use, pressuring ports and other logistics capabilities. "We brought in more fertilizers than the farmer needed at that time," Ricardo Tortorella, Anda's executive director, said referring to the first half of 2022. "This clogged up ports, all of them are full until today." Tortorella said potential unforeseen weather problems, uncertainty over Chinese demand for crops and the war in Ukraine had also accounted for the weaker demand for fertilizer. Logistics bottlenecks at ports had not affected deliveries to farmers, he said.
POLL Analysts cut Canadian dollar forecasts as recession risk looms The Canadian dollar is set to fall short of a September forecast for the coming year following sharp losses in recent weeks and as interest rate hikes by the Bank of Canada threaten to push the domestic economy into recession, a Reuters poll showed.
ANALYSTS' RECOMMENDATION • Aritzia Inc: CIBC raises target price to C$59 from C$48, on expectation of double-digit revenue growth, margin expansion and robust free cash flow.
• Wesdome Gold Mines Ltd: Canaccord Genuity raises target price to C$10 from C$9, after the company announced a new set of drill results from an ongoing surface exploration program at its Eagle River Mine located near to Wawa, Ontario.
ECONOMIC EVENTS (All timings in U.S. Eastern Time) 1000 Ivey PMI for Sep: Prior 57.1 1000 Ivey PMI SA for Sep: Prior 60.9
COMPANIES REPORTING RESULTS October 6: Richelieu Hardware Ltd: Expected Q3 earnings of 68 Canadian cents per share
October 7: MTY Food Group Inc: Expected Q3 earnings of C$1.09 per share
CORPORATE EVENTS (All timings in U.S. Eastern Time) 1430 Richelieu Hardware Ltd: Q3 earnings conference call
EX-DIVIDENDS Dollarama Inc: Amount C$0.05 Onex Corp: Amount C$0.10 Toronto-Dominion Bank: Amount C$0.89 Vecima Networks Inc: Amount C$0.05 VersaBank: Amount C$0.02
(All analysts' estimates are according to I/B/E/S Refinitiv data)
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