Jan 27, 2023
The Daily Chase: Markets point to negative open; Intel forecasts grim outlook
First Look With Surveillance: Intel Gloomy, Hunt Talks
It's shaping up to be a rather glum final trading session of the week as yesterday's broad-market rally fizzles. U.S. equity market futures are lower across the board as investors continue to digest a stream of corporate earnings, including Intel's dour revenue forecast for the first quarter (more on that below) and await the big event of next week when the U.S. Federal Reserve delivers its first monetary policy decision of the year. All that said, the three major indices are still in positive territory for both the week and the year, with the Nasdaq up almost exactly 10 per cent so far in 2023.
TOTAL BOOSTS STAKE IN FORT HILLS
TotalEnergies is throwing a wrench into Suncor's plan to buy out Teck Resource's entire stake in the Fort Hills oilsands project. The French energy firm's Canadian subsidiary is exercising its right of first refusal on the project, paying Teck $312 million to boost its stake by 6.65 per cent to 31.23 per cent. The move comes about three months after Suncor – which is the operator and majority owner of the open-pit mine in Northern Alberta – said it would buy out Teck's entire 21.3 per cent working interest in the project for $1 billion. Total's move presumably reduces the value of Suncor's deal, likely by something resembling a commensurate amount to the price paid by Total, though we're still waiting on word from Suncor on any amendments to its earlier deal.
INTEL DELIVERS GRIM FORECAST, SHARES PLUNGE
Okay, back to Intel, as promised – the struggling chipmaker's painful 2022 performance doesn't look like it's anywhere near abating. The company is predicting it'll swing to a loss in its current quarter, and even the high-end of its revenue forecast range (US$11.5 billion) missed the average Wall Street estimate by a whopping US$2.5 billion. Those disappointing figures sent shares swooning in the premarket, down about nine per cent at last check. The company is facing some structural headwinds to start the year, including a precipitous slowdown in PC and server demand, prompting the company to slow spending on new plants and look for job cuts in an effort to save US$3 billion per year.
OTHER NOTABLE STORIES
- Shares of American Express are rising in the premarket – up about five per cent – after the company's full-year earnings per share forecast topped estimates and the credit card giant boosted its quarterly dividend 15 per cent to US$0.60 per share.
- Western Forest Products is indefinitely putting its Port Alberni facility on ice as it looks for an economically-viable path forward for the mill alongside partners including local first nations. The company announced back in the fall that it would be temporarily shutting down the facility for six months, putting 100 employees out of work.
- In what can only be described as a worrying sign for newsletter writers, shares of Buzzfeed surged 120 per cent yesterday after the media firm outlined plans to use OpenAI – the company behind ChatGPT – to bolster its content creation. In an internal memo, the company's CEO said “AI inspired content” will become “part of our core business” this year.
- Shares of Bed, Bath & Beyond took it on the chin in yesterday's trade, falling 22 per cent after the retailer inched closer to bankruptcy, disclosing it had received a default notice from JPMorgan.
- Notable data: Ottawa's Fiscal Monitor, U.S. Personal Income & Consumption, University of Michigan Consumer Sentiment Index
- Notable earnings: Chevron, American Express, Colgate-Palmolive