Top headlines: Price hikes in store for some as Netflix eliminates ad-free basic plan in Canada

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Today’s headlines

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Top story

Netflix eliminates ad-free basic plan in Canada, meaning price hikes for some

Netflix Inc. is putting the final stake in its cheapest, ad-free “basic” plan in Canada.

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After announcing last year that it would no longer offer the $9.99 plan to new or returning subscribers, the streaming giant is phasing out the price level entirely for users who were grandfathered into the plan.

“Basic” subscribers will now need to choose whether to downgrade to a $5.99 plan that includes commercial interruptions — and most of the Netflix catalogue — or pay more for the no-ads plans that start at $16.49 per month.

Netflix told investors in its quarterly financial report on Tuesday that it will eliminate the basic plan first in Canada and the United Kingdom between April and the end of June.

The latest move comes as Netflix looks to push more subscribers to its ad-supported plans, which cost less but are more lucrative for the company since they sell ad space.

Most of the biggest streaming platforms have recently adopted a similar strategy.

Amazon.com Inc.’s Prime Video will begin showing commercials on its streaming service in Canada starting on Feb. 5. It will give subscribers an option to “opt-out” by paying more to remove the commercial breaks.

David Friend, The Canadian Press

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4:47 p.m.

Market close: TSX led higher by energy and utilities, U.S. stock markets also rise

Strength in energy and utilities helped Canada’s main stock index post a modest gain, while U.S. markets also moved higher following a stronger-than-expected GDP report.

The S&P/TSX composite index closed up 75.76 points at 21,101.54.

In New York, the Dow Jones industrial average was up 242.74 points at 38,049.13. The S&P 500 index was up 25.61 points at 4,894.16, while the Nasdaq composite was up 28.58 points at 15,510.50.

The Canadian dollar traded for 74.22 cents U.S., according to XE.com, compared with 74.16 cents U.S. on Wednesday.

The March crude contract was up US$2.27 at US$77.36 per barrel and the March natural gas contract was down eight cents at US$2.18 per mmBTU.

The February gold contract was up US$1.80 at US$2,017.80 an ounce and the March copper contract was down two cents at US$3.87 a pound.

The Canadian Press

2:45 p.m.

Bank of America sharing $800 million stock reward to retain staff

Bank of America Corp. is splitting a roughly US$800 million pool of restricted stock with the majority of its staff, boosting compensation to retain employees even as the bank works to keep a lid on expenses.

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The incentive, which comes on top of regular compensation, goes to workers who earn as much as US$500,000 in total annual pay, according to a memo from chief executive Brian Moynihan Thursday. About 97 per cent of the global workforce is eligible. This is the seventh time the firm has paid such awards, which total more than US$4.8 billion since the program started in 2017, according to the memo, which a company spokesperson confirmed.

“The hard work of our teammates around the world over the past year again produced strong results,” Moynihan said in the memo. “This work enabled us to invest in the future, including in our digital capabilities,” and “in programs and services designed to help our teammates enjoy long and successful careers with our company.”

Earlier this month, the company reported US$26.5 billion in net income for 2023, down from US$27.5 billion a year earlier. The firm is focused on keeping expenses in check, and used attrition to bring its headcount down almost two per cent, to 212,985, without taking a meaningful severance charge, chief financial officer Alastair Borthwick said on a call with analysts after results were released.

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— Bloomberg

12:46 p.m.

Midday markets: Wall Street rises after data on U.S. economy stomps expectations

U.S. stocks are ticking higher following signals that the economy is growing much more powerfully than economists expected.

The S&P 500 was up 0.5 per cent in midday trading and on track to set a record for a fifth straight day. The Dow Jones Industrial Average was up 106 points, or 0.3 per cent, as of 11:30 a.m. Eastern time, and the Nasdaq composite was 0.6 per cent higher.

International Business Machines Corp. was helping to lead the market with a gain of 12.8 per cent after it reported a stronger profit for the latest quarter than analysts expected. It helped offset a 10.4 per cent tumble for Tesla Inc., whose earnings and revenue fell short of forecasts. The electric-vehicle maker also warned of notably lower sales growth this year.

But Wall Street’s main focus was on a report indicating the U.S. economy continues to steam ahead, demolishing last year’s forecasts for an imminent recession because of high interest rates.

In Toronto, the S&P/TSX composite index was up 42.35 points at 21,068.13.

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The Canadian Press, The Associated Press

11:36 p.m.

Bad Boy Furniture officially bankrupt after failing to file proposal

Toronto-area furniture retailer Bad Boy Furniture Warehouse Ltd. is officially bankrupt.

In November, the company filed a notice of intention under the Bankruptcy and Insolvency Act, saying it aimed to restructure its business.

Later the same month, an Ontario court gave Bad Boy permission to begin liquidation sales.

It also gave the retailer until Jan. 23 to file its restructuring proposal.

But according to a new document on the website of bankruptcy trustee KSV Advisory, Bad Boy failed to file a cash-flow statement or proposal in time, and is now deemed to have made an assignment.

Scott Terrio, manager of consumer insolvency at licensed insolvency trustee firm Hoyes, Michalos & Associates Inc., says that means the company is now bankrupt.

The Canadian Press

10:05 a.m.

U.S. stocks head for another record, TSX rises

Stocks on Wall Street rose toward another record high after data showed the United States economy remains resilient despite the Federal Reserve’s still elevated rates.

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The S&P 500 extended this year’s gains up 0.42 per cent and hovering near the 4,900 mark. The Dow Jones industrial average was up 0.46 per cent, while the Nasdaq composite index was up 0.39 per cent.

The U.S. economy expanded in the fourth quarter by more than forecast, powered by resilient consumer spending that helped cap the strongest year of growth since 2021. Gross domestic product increased at a 3.3 per cent annualized rate. The main growth engine — personal spending — rose at a 2.8 per cent rate.

In Canada, the S&P/TSX composite index was up 0.23 per cent at 21,070.88 on broad-based sector strength.

— Bloombergm Financial Post

9:39 a.m.

U.S. GDP grew 3.3 per cent in fourth quarter, trouncing forecasts

The United States economy’s fourth-quarter growth trounced forecasts as cooling inflation fuelled consumer spending, capping a surprisingly strong year that defied recession calls.

Gross domestic product increased at a 3.3 per cent annualized rate, according to the government’s preliminary estimate out Thursday. For all of 2023, the economy expanded 2.5 per cent.

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The economy’s main growth engine — personal spending — rose at a 2.8 per cent rate. Business investment and housing also helped fuel the larger-than-expected advance last quarter.

A closely watched measure of underlying inflation rose two per cent for a second straight quarter, in line with the Federal Reserve’s target, the Bureau of Economic Analysis report showed.

Stock futures rose while Treasury yields were lower as traders focused on the inflation figures and boosted the odds of a March rate cut.

The figures wrap up a year in which the economy showed surprising stamina, defying expectations by many Wall Street economists that the country was poised to slip into a recession.

— Bloomberg

7:30 a.m.

Stock markets before the opening bell

Global stocks paused as disappointing results from Tesla Inc. took the edge off the recent rally, and investors waited to see if the European Central Bank would hint at when it might start cutting interest rates.

Tesla shares dropped eight per cent in U.S. premarket trading after the electric vehicle maker missed earnings estimates and flagged slower growth this year. Contracts on the Nasdaq 100 traded flat, with traders looking ahead to results from Intel Corp. later in the day.

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While International Business Machines Corp. gained seven per cent after delivering a positive revenue outlook, some other tech earnings underwhelmed investors. European chipmaker STMicroelectronics NV dropped after giving weaker sales guidance, while South Korea’s SK Hynix Inc., the world’s No. 2 maker of memory chips, also fell after results.

The pause follows a strong recent run for stocks, as investors have grown confident interest rates will fall this year and that economic growth is likely to stay resilient.

“We are still in a bad-news-is-good-news environment and that if earnings drop a bit and margins tick down, it would be a further guarantee that interest rates will go down,” said Frederic Leroux, head of cross asset at Carmignac Gestion.

— Bloomberg

What to watch today

The survey of employment, payrolls and hours for November will be released this morning. In the United States, expect initial jobless claims, real GDP for Q4, advance economic indicators for December and durable goods orders.

The European Central Bank will release its latest interest rate decision.

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Visa Inc., Intel Corp. and American Airlines Inc. will release earnings reports.

New Brunswick Premier Blaine Higgs delivers his annual state of the province address this evening.

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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