Today’s news: Trending business stories for January 9, 2024

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Today’s headlines

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Top story

Canadian banks’ ‘sustainable finance’ label misleading, OSC complaint alleges

Canada’s Big Five banks are potentially misleading investors with their use of terms like sustainable finance, according to a complaint to securities regulators by a climate advocacy group.

Banks are using the term “sustainable finance” too broadly and not backing up the claims with data, Investors for Paris Compliance said in its submission Jan. 9 to the Ontario Securities Commission and the Autorite des marches financiers of Quebec.

Canadian banks including Royal Bank of Canada, Toronto-Dominion Bank, Bank of Montreal, Canadian Imperial Bank of Commerce and Bank of Nova Scotia have all made pledges on sustainable finance that together total $2 trillion by 2030.

Sustainable finance covers a range of lending activities aimed at advancing mostly environmental and social causes. The financing can be anything from green bonds funding a specific renewable energy project to loans that go to general corporate use but are tied to sustainability-linked performance targets.

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The commitments form a key part of their sustainability efforts, but banks are providing little to back up their effectiveness, said Matt Price, executive director of Investors for Paris Compliance.

“They’re putting this in the window as one of their core responses to climate change and net zero, when they’re not rationalizing or justifying or providing any evidence or proof about that.”

The advocacy group is concerned not only with the overall lack of disclosure, but that some of the deals that have been disclosed have been with oil and gas companies whose emissions are on the rise.

Ian Bickis, The Canadian Press

Read the full story here.

10:13 a.m.

Markets open: Global stocks at risk of ‘reverse Goldilocks’ scenario

Wall Street fell Tuesday, pulling back after a tech-led bounce on Monday as Treasury 10-year yields fluctuated above four per cent and oil rose

The S&P 500 extended this year’s losses and was down 0.67 per cent Tuesday. The Nasdaq fell 0.65 per cent after Samsung Electronics Co. posted its sixth straight quarter of declining operating profit. The Dow Jones Industrial Average was down 0.71 per cent.

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A growing mismatch between aggressive pricing for U.S. interest rate cuts and resilient economic fundamentals reducing the need for such easing risks creating a “reverse Goldilocks” scenario for global markets, according Max Kettner at HSBC Holdings PLC.

“We’re likely seeing a ‘head fake’ in the market right now,” said Matt Maley at Miller Tabak + Co. “We just don’t know yet if last week’s decline was that ‘head fake’ or if yesterday’s bounce was it. Thankfully, the battle lines are very well drawn and we’ll know which situation was the head fake once one of two lines is broken in a meaningful manner.”

In Toronto, the S&P/TSX composite index was down 0.68 per cent on broad-based sector declines.

Bloomberg

9:34 a.m.

Canada’s trade surplus halves in November

Statistics Canada says the country’s merchandise trade surplus narrowed to $1.6 billion in November as imports rose and exports fell.

The result compared with a revised surplus of $3.2 billion in October. The initial reading for October released last month had been for a surplus of $3.0 billion.

For November, total imports rose 1.9 per cent, helped by an 11.6 per cent increase in imports of energy products, boosted by imports of uranium from Kazakhstan.

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Imports of refined petroleum energy products also rose 18.8 per cent, on higher imports of gasoline and aviation fuel from the United States.

Meanwhile, total exports fell 0.6 per cent in November as exports of metal and non-metallic mineral products dropped 6.5 per cent, mainly on lower exports of unwrought gold, silver, and platinum group metals. Exports of aircraft and other transportation equipment and parts fell 16.8 per cent.

In volume terms, total imports in November were up 1.6 per cent, while exports were down 0.1 per cent.

The Canadian Press

8:30 a.m.

Stantec to buy engineering firm Morrison Hershfield

Stantec Inc. has signed an deal to buy engineering and management firm Morrison Hershfield.

Financial terms of the deal were not disclosed.

Stantec said the deal expands its presence in most major Canadian markets and strengthens its U.S. presence in buildings engineering.

Morrison Hershfield, based in Markham, Ont., is a 1,150-person company with offices in 22 cities in Canada and the United States, and one office in India.

The acquisition is subject to court, regulatory and Morrison Hershfield shareholder approvals.

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The deal is expected to close in the first quarter of 2024.

The Canadian Press

7:30 a.m.

Stock markets before the opening bell

Stocks and bonds retreated before a key United States inflation reading this week and under a wave of heavy government and corporate debt supply.

U.S. stock futures dropped with Europe’s Stoxx 600 benchmark as investors shrugged off tech-led gains that rolled across global markets.

As Monday’s bounce proves short-lived, investors are back to worrying about risks from inflation to bond volatility as a tsunami of corporate and government debt washes over the market.

In Canada, the S&P/TSX composite index closed up 137.36 points at 21,074.91 on Monday.

Bloomberg

What to watch today

RBC Capital Markets holds its Canadian bank CEO conference in Toronto.

Data on Canadian merchandise trade balance and building permits for November will be released this morning. In the United States, expect the NFIB small business economic trends survey for December and the goods and services trade balance for November.

Cannabis company Tilray Brands Inc. reports earnings today.

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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