Here are five things you need to know this morning:
Oh Snap! Shares of Snap Inc. are poised for their biggest one-day decline since 2022 after the maker of Snapchat posted quarterly results the bell on Tuesday. Revenue rose five per cent during the quarter, but that’s a far cry from what analysts were expecting and well shy of the 25 per cent growth that rivals like Meta recently posted. Worse still, the company projects a loss in adjusted earnings of up to US$95 million in the current period – far worse than the $33 million analysts were hoping to see. The company has been cutting costs aggressively in recent months, including slashing 10 per cent of its workforce just this week. But none of it seems to be enough to turn the company around in the estimation of investors. The shares are changing hands, down 30 per cent in the premarket on Wednesday, below $13 a share. That’s far from the $80 they were worth as recently as 2021.
BAM hikes dividend: It’s a different story at Brookfield Asset Management, where the Toronto-based asset manager posted better than expected quarterly results before markets opened, sending its shares up in premarket trading. The company, which was partially spun out of parent Brookfield Corp. back in 2022, said its profit inched down during the quarter even as revenues ticked higher. But overall, the company posted distributable earnings of $586 million in the fourth quarter, or 36 cents per share. That beat analyst expectations of 34 cents per share. The main takeaway for investors on Wednesday is likely to be the dividend hike, where the quarterly payout has been boosted to 38 cents a share – up from 32 cents previously.
Kohl’s: We’ll be watching the market action in shares of U.S. retailer Kohl’s on Wednesday. According to Reuters, the department store chain is facing pressure from an activist hedge fund called Vision One Management Partners, who recently took a stake in the company and are now pushing the chain to sell itself. This isn’t the first time Kohl’s has faced such pressure in recent years, as other activist investor groups have targeted the chain with 1,100 stores across the U.S. to turn its fortunes around. This push has an unexpected Canadian connection, however, as Vision One was co-founded by former Canadian Prime Minister Stephen Harper, and he’s chairman of the Miami-based investment fund.
Trade deficit: Some unexpected news out of Statistics Canada on Wednesday, as the data agency reported that Canada swung to a trade deficit in December. At $312 million, it was a fairly small one, but a big reversal from the $1 billion surplus that economists were expecting, and also down from the $1.1 billion surplus in November, which was revised lower from $1.6 in a preliminary release. Canada’s economy was on a four-month streak of selling more to the world than it buys, but that came to an end in December as exports fell by 1.9 per cent and imports ticked up 0.2 per cent. The drop in exports was partly a currency story, as the average value of the Canadian dollar ticked up by 1.5 U.S. cents compared with November. When the loonie appreciates against the greenback, monthly trade values expressed in Canadian dollars are lower.
Spidey sense: Despite tumult at U.S. regional banks and some eyebrow-raising transaction prices for recent office tower deals, the head of Canada’s top bank regulator says he thinks Canada’s big banks are going to navigate the current bout of uncertainty just fine. The head of the Office of the Superintendent of Financial Institutions, Peter Routledge, told reporters in Toronto on Tuesday he isn’t worried about systemic risk at Canada’s major lenders, but his reasoning for thinking that didn’t exactly boil down to technical analysis. “My spidey sense, my intuition, is that we’ll come through this commercial real estate, office commercial real estate problem pretty well,” he said. “Not without loss, just everything’s relative and I think relatively, we’ll be OK on that.” So no need to worry about a potential mortgage cliff, rising loan loss provisions or tightening net interest margins when the big banks report earnings later this month: a guy named Peter getting bit by a radioactive spider tells us everything’s going to be fine.
This article has been updated to indicate the merchandise trade data released Wednesday was for December.