Strong Corporate Earnings Takes the Market

Author

Faro Capital
April 28, 2023

Good Morning,

U.S. equities closed higher as earnings are coming in hotter than expected. Meta rose 13% and other social media stocks like Snapchat rose as they issued a more positive guidance for the current period. With positive stock performance investors also kept an eye on the economy with U.S. Q1 economy slowing down.

Canadian stocks closed higher due to positive earnings yesterday and this week. Canadian wages grew in February. The biggest leaders were cannabis stocks as the U.S reintroduced the Banking Act which is intended to allow banking services to cannabis the sector.

Brazilian stocks close slightly higher with investors looking at U.S. and local corporate earnings. At the local level finance minister Haddad, planning minister Tebet, and central bank president Campos Neto held a debate session regarding interest rates, inflation, and growth.

The central bank of Argentina raised its Leliq rate by “1,000 bps” to 91%. This brings borrowing costs to their highest levels ever as the country is facing historic inflation levels of 100%. In march the country’s inflation level touched 104% Y/Y.

Gold touched a 3-week low around $1,870 per ounce.

Corn futures touched to a 1-month low of $6.3 per bushel due to high supplies from top producers. The American Midwest is expected to produce higher than expected crops due to good weather, Argentina’s production this year is expected to hit a record 54M tonnes, and Brazil had to sell supply at a discount to clear space for next year’s production.

Markets: Before the Open

Earnings

Top News Stories 

Canada

  • Canadian Pacific Kansas City reported net income of C$800M in Q1 2023, up 35% vs last year (BNN)

  • Precision Drilling reported Q1 profits of C$95.8M (BNN)

  • CGI reported Q2 earnings of C$419.4M vs C$370M last year (BNN)

  • Cenovus Energy reported Q1 profit of C$636M vs C$1.6B last year (BNN)

  • First Quantum Minerals reported Q1 earnings of C$75M vs C$385M last year (BNN)

  • TotalEnergies sells Canadian operations to Suncor for C$6.1B (BNN)

U.S.

  • First Bank dropped on 30% on Wednesday as the bank looks for a life line (CNBC)

  • Norfolk Southern reported a $387M charge on the East Palestine derailment (CNBC)

  • FDA gives accelerated approval for Biogen ALS drug (CNBC)

  • Jetblue reported loss in Q1 (CNBC)

  • Alphabet gives the go ahead for $70 billion buyback (CNBC)

  • Hasbro & Mattel announce a multiyear licensing agreement (CNBC)

  • GAP announced its plan to cut 1,800 jobs to cut costs (CNBC)

  • Dropbox to layoff 16% of its workforce (CNBC)

  • Man Group forecasts an EM rout coming (BBG)

Argentina

  • Argentina to pay for Chinese imports in Yuan instead of dollars (RT)

Bolivia

  • Bolivia’s government takes control of Banco Fassil & arrests executives (RT)

Brazil

  • Vale reported Q1 profits down 59% vs Q1 2022 (RT)

  • Petrobras was the 6th oil company that received the most funds from financial institutions (RIO)

  • Brazil is the Latin American country with the most active fintechs (RIO)

Colombia

  • Colombia’s Minister of Finance Ocampo will be replaced by Ricardo Bonilla (RT)

  • Dutch company Makro invests $11.8M to expand operations (ELT)

Cuba

  • Cuba is turning to Russia and Mexico to ease oil shortages (RT)

Dominican Republic

  • Banco Santa Cruz closed 2022 with its credit portfolio increasing 23% (INV)

  • Banco Adopem increased their operations to $176M in 2022 (INV) 

Ecuador

  • In depth look on why president Guillermo Lasso faces impeachment & the process (AS/COA)

Panama

  • Imports rose 17% in Q1 2023 (LAE)

Peru

  • Peru’s construction sector is projected to grow only 0.4% in 2023 (ELC)

  • Investment in transportation infrastructure projects in Q1 was $230.2M (ELC)

  • Citrus exports are estimated to grow 2% in 2023 (ELC)

  • Entel to invest $150M in mobile phone services in 2023 (ELC)

Mexico

  • América Móvil reported a $1.66B profit in Q1 earnings (LAE)

  • Walmart Mexico reported a 3.7% rise in Q1 net profit (RT)

  • Exports grew 3.2% Y/Y in March (ELF)

  • BBVA Mexico grows 45% in Q1 2023 (ELE)

  • Fibra Uno reported a 8.2% increase in revenues in Q1 2023 (ELE)

Insights

Arcos Dorados is the world’s largest independent McDonald’s franchisee, operating the largest quick service restaurant chain in Latin America and the Caribbean. It has the exclusive right to own, operate and grant franchises of McDonald’s restaurants in 20 Latin American and Caribbean countries and territories with more than 2,300 restaurants, operated by the Company or by its sub-franchisees, that together employ over 90 thousand people (as of 12/31/2022). Arcos Dorados is listed for trading on the New York Stock Exchange (NYSE: ARCO).

Thank you for getting this far in the newsletter. If you have any feedback please reach out at any time. Don’t hesitate to refer your friends and colleagues to subscribe. The more subscribers mean

 DISCLAIMER: The writing above is not financial advice or solicitation to buy/trade any financial product/security. This newsletter is for educational purposes only. Any action/decision made by any reader is done by their own accord. Financial markets are full of risk so please be careful.