Top headlines: Apple leads $370-billion tech rout as stock rally fizzles

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Today’s headlines

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Top story

Apple leads $370-billion tech rout in reversal from group’s 2023 rally

The largest technology stocks that lifted the broader market last year are having a less-rosy start to 2024.

The so-called Magnificent Seven, which includes Apple Inc., Amazon.com Inc., Alphabet Inc., Microsoft Corp., Meta Platforms Inc., Tesla Inc. and Nvidia Corp., have slipped for last four consecutive trading days, the longest losing streak in a month, according to the Bloomberg Magnificent 7 Price Return Index. Shares of Apple, down nearly five per cent in the time period, lead the slump that’s erased roughly US$370 billion in market value. The Nasdaq 100 Index has also fallen in the last four trading days.

“We don’t know if last year’s rally has fully ended, but it is completely normal to expect markets will pull back after a rally like we saw,” said Steve Sosnick, chief strategist at Interactive Brokers Group. “Without the year-end factors that turbocharged the rally, I think we’re seeing the party winding down.”

It’s a signal that investor doubts over the sticking power of the 2023 rally were well-placed. Though the group surged more than 100 per cent last year, driven by a frenzy in artificial intelligence, gains cooled in the second half of 2023 as investors mulled the United States Federal Reserve’s ability to execute a soft landing for the U.S. economy, which would likely mean fewer interest rate cuts than expected.

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“You’re not going to get high-single-digit or double-digit earnings growth if we get something worse than a soft landing,” Sosnick said. “But we’re not going to get six cuts with a soft landing.”

Read the full story here.

Bloomberg

4:38 p.m.

Market close: TSX moves lower despite energy gains, U.S. markets also down

Canada’s main stock index lost more than 50 points despite strength in energy stocks, while U.S. stock markets also fell.

The S&P/TSX composite index closed down 53.56 points at 20,818.58.

In New York, the Dow Jones industrial average was down 284.85 points at 37,430.19. The S&P 500 index was down 38.02 points at 4,704.81, while the Nasdaq composite was down 173.73 points at 14,592.21.

The Canadian dollar traded for 74.87 cents U.S. compared with 75.10 cents U.S. on Tuesday.

The February crude oil contract was up US$2.32 at US$72.70 per barrel and the February natural gas contract was up 10 cents at US$2.67 per mmBTU.

The February gold contract was down US$30.60 at US$2,042.80 an ounce and the March copper contract was down two cents at US$3.86 a pound.

The Canadian Press

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4:02 p.m.

Vehicle sales post biggest annual jump since 1997: DesRosiers

Auto sales jumped 11.8 per cent in 2023 compared with the year before as vehicle supply continued to improve, according to DesRosiers Automotive Consultants.

The report says it was the biggest year-over-year increase in sales since 1997.

DesRosiers says improved vehicle supply and pent-up demand from so-called lost sales during the pandemic in the second half of the year helped boost sales activity despite higher interest rates and economic worries.

Sales for the month of December also came in strong across all provinces with an increase of 10.7 per cent year-over-year, marking 14 consecutive months of growth, the report says.

DesRosiers adds the fourth quarter saw sales rise 17.2 per cent compared with the fourth quarter of 2022.

Andrew King, managing partner at DesRosiers, says sales of light trucks reached a record share of 85.8 per cent last year as consumers preferred bigger vehicles over passenger cars.

The Canadian Press

2:29 p.m.

Canada, other U.S. allies warn Houthi rebels to stop Red Sea attacks on shipping vessels

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Canada and some of its allies are warning the Houthis that they will bear responsibility for the consequences of their continued attacks on ships in the Red Sea.

The statement, released by the White House and signed by 12 countries, says the ongoing attacks are illegal, unacceptable and profoundly destabilizing.

The Iran-backed rebel group has been firing long-range missiles at Israel from Yemen and attacking civilian cargo ships, and the statement said the group has been significantly escalating its efforts in the past week.

Around 15 per cent of the world’s seaborne trade typically passes through the Red Sea, but shipping companies have been forced to reroute.

The statement says rerouting ships is adding weeks of delays and jeopardizing the movement of food, fuel and humanitarian aid.

It calls for an immediate end to the attacks and for release of detained vessels and crews.

The Canadian Press

1 p.m.

Suncor reports second highest upstream production quarter in company history

Suncor Energy Inc. says its upstream production in the fourth quarter was 808,000 barrels per day, the second highest quarter in the company’s history.

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The Calgary-based company says the performance for the last three months of the year resulted in annual average upstream production of 746,000 bbls/d for 2023.

Suncor says net synthetic crude oil production was 476,000 bbls/d and net non-upgraded bitumen production was 282,000 bbls/d resulting in total oilsands production of 758,000 bbls/d for the quarter.

Total production from its exploration and production operations was 50,000 bbls/d in the fourth quarter including production from the ramp up at Terra Nova.

Suncor says its downstream operations posted average refining utilization of 97 per cent in the fourth quarter.

The company is scheduled to release its fourth-quarter financial and operating results on Feb. 21.

Read the full story here.

The Canadian Press

12:52 p.m.

Midday markets: Wall Street extends weak start to 2024 ahead of Federal Reserve minutes release

Stock are slipping again on Wednesday as Wall Street’s slow start to 2024 carries into a second day.

The question hanging over the market is whether all the enthusiasm that helped stocks broadly rally for nine straight weeks into the start of this year was warranted. It was built on expectations that inflation has cooled enough for the United States Federal Reserve to not only halt its hikes to interest rates but to cut them several times this year. Hopes are also high that the economy can escape a recession, even after the Fed hiked its main interest rate to the highest level since 2001.

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In Toronto, the S&P/TSX composite index was down 103.16 points at 20,768.98.

In New York, the Dow Jones industrial average was down 247.00 points at 37,468.04. The S&P 500 index was down 30.32 points at 4,712.51, while the Nasdaq composite was down 116.60 points at 14,649.34.

The Associated Press, The Canadian Press

Vancouver home sales in December rise from a year earlier

The Real Estate Board of Greater Vancouver says December home sales rose compared with a year earlier as the region closed out 2023 with balanced market conditions despite high borrowing costs.

The board says 1,345 homes changed hands in December, a 3.2 per cent increase from the same month in 2022, but 36.4 per cent below the 10-year seasonal average.

There were 1,327 new listings of detached, attached and apartment properties last month, a 9.9 per cent increase from a year earlier, as new listings were 22.7 per cent below the 10-year seasonal average.

The composite benchmark home price in December for Metro Vancouver was $1,168,700, a five per cent increase from December 2022, but down 1.4 per cent from November 2023.

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Andrew Lis, the board’s director of economics and data analytics, says higher borrowing costs haven’t been enough to dissuade buyers from entering the market, but that “the story of 2023 is one of too few homes available relative to the pool of willing and qualified buyers.”

He says prices rose due to near record-low inventory levels last spring after sellers were reluctant to list their properties early in the year, forcing buyers to compete for the available homes.

Read the full story.

The Canadian Press

10:01 a.m.

Stocks extend drop as bearish new-year mood deepens

U.S. stocks and bonds extended their drop as the bearish new-year mood deepened ahead of a swath of data that could show whether aggressive bets on interest-rate cuts this year are justified.

Ten-year Treasury yields rose to four per cent, the highest since mid-December, while the S&P 500 slid 0.5 per cent. The Nasdaq 100 fell 0.6 per cent as investors continued their retreat from tech stocks. The dollar strengthened for a fourth day, the longest run since November. Nvidia Corp. dropped while crypto-tied stocks floundered as Bitcoin erased most of its gains this year.

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U.S. markets extended Tuesday’s slump, which registered as the biggest global rout since 1999 for the first full day of trading in a year. Wednesday’s data includes the ISM manufacturing report for December and the JOLTS report of job openings for November, followed by minutes from the Federal Reserve’s last meeting.

Richmond Fed president Thomas Barkin held off on giving a forecast on when the U.S. central bank’s first rate cut would occur. “Conditions are ever evolving,” he said in prepared remarks Wednesday. “So too will our approach. So, buckle up. That’s the proper safety protocol even if you expect a soft landing.”

Bloomberg

9:28 a.m.

Ballard Power Systems signs new long-term supply deal with NFI

Ballard Power Systems has signed a new long-term supply agreement with bus maker NFI Group Inc.

The Vancouver-based fuel cell company says the deal marks a new phase in its partnership with NFI.

It also says the Winnipeg-based company has placed its first order under the agreement for a minimum of 100 fuel cell modules for planned delivery this year.

The modules will primarily be produced in Ballard’s facility in Bend, Ore.

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They will be used in New Flyer’s Xcelsior CHARGE FC hydrogen fuel cell buses that will be deployed in North America.

Ballard chief commercial officer David Mucciacciaro says the company believes NFI subsidiary New Flyer is well positioned to deliver deployment scale volumes of fuel cell buses, particularly in the U.S. market.

The Canadian Press

7:30 a.m.

Stocks, bonds extend new year drop

Traders hoping that a year-end rally would pick up where it left off got the opposite on 2024’s first trading day, a session that featured one of the worst-ever concerted drops in stocks and bonds to start a year.

While the first-day performance says little about what markets will do for the rest of 2024, the synchronized retreat signalled at least some hesitation among investors to chase a fourth-quarter rally that boosted both U.S. shares and longer-maturity Treasuries by more than 10 per cent.

This morning U.S. bonds and stock futures extended their drop as traders braced for a swathe of data that could show whether bets on interest-rate cuts this year are justified.

Ten-year Treasury yields rose to 3.97 per cent and S&P 500 futures slid 0.4 per cent. The dollar strengthened for a fourth day, the longest run since November. Nvidia Corp. slid in U.S. premarket trading as investors continued their retreat from tech stocks.

Bloomberg

Stock markets before the opening bell

What to watch today

Investors will watching for the release of minutes of the Federal Reserve’s last policy meeting later in the day, hoping for signs the central bank will move ahead with interest rate cuts in coming months.

Need a refresher on yesterday’s top headlines? Get caught up here.

Additional reporting by The Canadian Press, Associated Press and Bloomberg

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