Amber Kanwar

Anchor, Reporter

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Here are five things you need to know this morning:

Macro files: The Canadian dollar is flat as we have some macro factors to contend with. Canada’s economy returned to growth toward the end of 2023 according to the latest read of GDP. Economic activity picked up 0.2 per cent in November from October, boosted by manufacturing, wholesale trade and transportation. Most economists this morning are not placing too much comfort in this number. Capital Economics says that while it points to better than expected Q4 growth, business surveys point to a bleaker outlook. “With the business surveys all consistent in their message that GDP will fall, we doubt that the economy has already turned a corner,” they said in a note to clients. CIBC says the upcoming employment and inflation data will be more important when it comes to determining when the Bank of Canada will start cutting rates. Speaking of rate cuts, today is the first U.S. Federal Reserve interest rate decision of the year. Cuts are not on the table today, but are for the year. When? We will parse through the statement and the press conference for clues. I’ll break the decision live at 2 p.m. ET and get instant reaction from Claudia Sahm, former Federal Reserve economist. Until then, it’s all about earnings. More below.

Magnificent headaches: Shares of Alphabet, Microsoft and Tesla were under pressure this morning, though, Microsoft might turn things around as the trading day advances. Microsoft and Alphabet both reported quarterly results last night. Microsoft grew sales to a fresh record and had slightly better growth in its all-important cloud group. To be honest there isn’t a lot to quibble with here, so the lacklustre reaction could just be on the back of very high hopes and an even higher stock. Dan Ives at Wedbush gushed about the results, calling it “A Masterpiece Quarter and Guidance from Redmond Should be Hung in the Louvre.” He’ll be on with me today 11 a.m. ET, don’t miss it! Alphabet, on the other hand, is weaker because ad revenue was weaker than expected. As much as everyone is excited about cloud, ads are still their bread and butter. And then there is Tesla. A judge ruled that Musk’s US$55 billion pay package is illegal after shareholders challenged the package as “excessive” (which happens to be the largest in U.S. corporate history). Anyway, the stock is down on fears that this could force Musk to sell shares, which has been a piggy bank to fund other ventures.

Double-shot: Shares of Starbucks are moving higher even though the coffee chain missed earnings and growth estimates. The stock is down 12 per cent over the past year, so hardly bid up in anticipation of results. Investors are glass half full, focusing on more realistic profit goals for the year and higher spend per order for U.S. customers. Seems like a weak excuse for a rally, so we will see if the shares hold their gains.

Choo-choo: We will watch shares of CP Rail. Earnings, sales and operating ratio all came in better than expected. For 2024 the company says it can grow earnings by double digits, which is in line with what the street was looking for.

Gibby A: Shares of CGI Group will be in focus. The stock hit an all-time high before reporting earnings this morning. They beat on earnings but BMO points out that organic growth decelerated, reflecting a softer demand environment. Investors may use this as an excuse to sell, even as CGI still delivered earnings per share growth of 10 per cent in the quarter.