Hertz to sell 20,000 EVs in shift back to gas-powered cars
The sales of 20,000 EVs began last month and will continue over the course of 2024, the rental giant said Thursday in a regulatory filing. Hertz expects to record a non-cash charge in its fourth-quarter results of US$245 million related to incremental net depreciation expense.
“The company expects to reinvest a portion of the proceeds from the sale of EVs into the purchase of internal combustion engine vehicles to meet customer demand,” Hertz said. “The company expects this action to better balance supply against expected demand of EVs.”
In October, Hertz chief executive Stephen Scherr said the company would scale back on EVs, which had made up 11 per cent of its total fleet. Teslas represented 80 per cent of that. He said EVs come with higher repair costs compared to the rest of its cars, which has hurt its bottom line. “EV’s will be slower than our prior expectations,” he said during the company’s third-quarter earnings call.
Hertz’s shares fell 4.3 per cent to US$8.95 as of 10:01 a.m. in New York.
Richard Clough, Bloomberg
Bitcoin pushes past US$49,000 as trading of U.S. spot ETFs begins
Bitcoin pushed past US$49,000 for the first time since December 2021 with trading commencing on the first U.S. exchange-traded funds that invest directly in the biggest cryptocurrency.
The token’s price advanced as much as 6.7 per cent to $49,021, the highest since December 2021, buoyed by the approval of 11 spot Bitcoin ETFs by the United States Securities and Exchange Commission after markets closed on Wednesday.
“A much wider audience of investors can now buy into Bitcoin in an easy and reliable way,” said Michael Safai, founding partner at Dexterity Capital.
“The ETF is effectively a watershed moment for financial advisers who now must have an opinion on this asset-class,” said Sui Chung, chief executive of data provider CF Benchmarks, which supplies indexes for several of the approved ETFs. “They might still not recommend it to their clients, but the fact it’s now available through a regulated product means they must at least have a viewpoint. This could open the door to a much more steady flow of interest and flows into the asset-class.”
Oil climbs as tanker seizure by Iran adds fuel to Middle East volatility
Oil climbed after Iran seized a tanker in the Gulf of Oman, the latest in a run of incidents involving merchant shipping that could threaten key shipping lanes.
Global benchmark Brent advanced above US$78 a barrel on Thursday. Iran said it seized an oil tanker near the Gulf of Oman that was at the centre of a contentious sanctions dispute between the Persian Gulf state and the United States. It adds a fresh dose of volatility to a region in which the U.S. and allies are weighing options for retaliating against Yemen-based Houthi militants for attacks on Red Sea shipping.
“The more widespread the retaliation against the Houthis, the more likely the Houthis are to escalate their attacks against civilian ships in the Red Sea, against coalition warships and even potentially against targets in Yemen and the Gulf Cooperation Council,” Ryan Bohl, a Middle East analyst at risk intelligence consultancy RANE Network, said on Bloomberg Television.
Markets open: Stocks drop on U.S. inflation miss
Wall Street was down after a report showed U.S. inflation came in warmer than expected.
The S&P 500 fell 0.06 per cent early Thursday, after initially touching the record high it reached two years ago in initial trading. The Dow was down 0.31 per cent, and the Nasdaq composite was down 0.19 per cent.
In Canada, the S&P/TSX composite index was down 0.21 per cent with almost all the sectors registering losses.
Stocks roared higher late last year on expectations that cooling inflation would prompt the United States Federal Reserve to cut rates sharply. Altogether the report will likely cause traders to push back forecasts for the timing of the first cut to rates, analysts said.
The Associated Press
U.S. inflation comes in higher than expected in December
Thursday’s report from the Labor Department showed that overall prices rose 0.3 per cent from November and 3.4 per cent from 12 months earlier. Those gains exceeded the previous 0.1 per cent monthly rise and the 3.1 per cent annual inflation in November.
Excluding volatile food and energy costs, so-called core prices rose just 0.3 per cent month over month, unchanged from November’s increase. Core prices were up 3.9 per cent from a year earlier, down a tick from November’s four per cent year-over year gain. Economists pay particular attention to core prices because, by excluding costs that typically jump around from month to month, they are seen as a better guide to the likely path of inflation.
Overall inflation has cooled more or less steadily since hitting a four-decade high of 9.1 per cent in mid-2022. Still, the persistence of still-elevated inflation helps explain why, despite steady economic growth, low unemployment and healthy hiring, polls show many Americans are dissatisfied with the economy — a likely key issue in the 2024 elections.
The Federal Reserve, which began aggressively raising interest rates in March 2022 to try to slow the pace of price increases, wants to reduce year-over-year inflation to its two per cent target level.
The Associated Press
Aritizia sales rise unexpectedly on new styles, higher markdowns
Aritzia Inc. reported an unexpected increase in sales for the third quarter as new inventory and higher markdowns drew in customers.
The Vancouver-based retailer’s revenue came in at $653.5 million, beating the average analyst estimate of $621.9 million. Sales rose 4.6 per cent from a year earlier, while analysts expected a decline.
Adjusted earnings came in at 47 cents per share compared with the average estimate of 41 cents.
“Although the consumer environment remains mixed, we generated sales growth across all of our geographies and channels, as clients responded well to our new styles and outerwear offering,” chief executive Jennifer Wong said in a statement after market close Jan. 10.
Management also said it expects to introduce new styles for the spring, which could further draw in customers and boost sales. The retailer also expects its inventory issues to improve by then.
Aritzia shares lost almost half their value over 2023 after the hype surrounding the company at the time failed to translate into financial success. Much of the hope for growth rests on its long-term plan to expand in the United States.
For the current quarter, the company sees sales of $670 million to $690 million, compared with the estimate of $677.6 million. Gilbert said seasonal contribution from the brand’s famous Super Puff jacket gives it a “strong franchise.”
Lara Sanli, Bloomberg
Stock markets before the opening bell
United States equity futures and European stocks ticked higher as investors prepared for inflation data that will help clarify the path for U.S. Federal Reserve policy.
Contracts for the S&P 500 pointed to small gains after the gauge wiped out all losses from the start of the year and closed just short of an all-time high set two years ago. Cryptocurrency stocks extended an advance in premarket trading after regulators approved exchange-traded funds that invest directly in bitcoin.
The U.S. inflation report is top of mind for traders Thursday. More evidence of cooling price pressures will support optimism around expectations for Fed interest rate cuts, but a hot reading could spur volatility. Economists tracked by Bloomberg expect year-over-year core inflation to fall to 3.8 per cent in the December data from four per cent in the prior month.
In Canada, the S&P/TSX composite index closed up up 18.44 points at 20,989.42 on Wednesday.
What to watch today
The Economic Club of Canada hosts their annual Economic Outlook Breakfast with chief economists from Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, Canadian Imperial Bank of Commerce and Royal Bank of Canada.
The United States consumer price index for December will be released this morning.
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Additional reporting by The Canadian Press, Associated Press and Bloomberg