August 10, 2023 7 am eastern time

On Wednesday, the S&P 500 was down 0.7% while Toronto was up 0.3%.

A number of companies had strong earnings reports yesterday. Linamar was down 3.3% yesterday but then after the close reported very strong results. 

Grocer/ Pharmacy Metro reported very strong results yesterday morning but rose only 1.2% on the day as it faces a large strike at its Toronto stores.

Stantec reported strong results after the close yesterday.

This morning Canadian Tire has reported somewhat weaker results. They indicate consumers are cutting back on discretionary items. They did not highlight any issue with higher credit losses. Apparently not many people are falling behind on credit card payments. (But I think that continues to be a risk given inflation and vastly higher mortgage costs for a significant chunk of people). Canadian Tire did withdraw their financial aspiration guidance which could send the stock lower. But overall it remains a very well run company and a “keeper” for the long term.

AutoCanada was also out with earnings this morning. The results look reasonably good but not gangbuster by any means. They are dealing with higher floorplan (Vehicle inventory) financing by reducing the number of vehicles on the lots. This may in part explain the general trend of a lack of vehicles at many dealerships (not just AutoCanada) and most dealers will want to hold fewer vehicles unless the manufacturers give incentives such as lower floorplan financing. AutoCanada reduced used inventory by 33%.

With that, we shall see how the day’s trading goes.

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