Auto & Transport Roundup: Market Talk

The latest Market Talks covering the Auto and Transport sector. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

1124 ET – Canadian Pacific Kansas City’s maintained guidance helped offset a light 1Q miss, with Scotiabank analyst Konark Gupta noting results were modestly below expectations due to several headwinds. Still, he says fundamentals “have already turned the corner in April,” with traffic, pricing and operating trends improving enough for management to reaffirm its full-year outlook. CP expects double digit EPS growth to resume in 2Q and strengthen into the back half as yields rebound, volumes accelerate and most segments improve. (adriano.marchese@wsj.com)

0932 ET – A rebound in the auto sector helped lift Canada GDP in February, and early estimates indicate output rose 1.7% annualized in 1Q—or a tad above the Bank of Canada’s estimate. CIBC Capital Markets economist Andrew Grantham points out that, overall, the GDP report was a mixed bag, with manufacturing-sector strength offsetting weakness elsewhere. Nine of 16 components tracked recorded declines, led by construction and the public sector. Even with this week’s jump in crude-oil prices, Grantham says there’s enough slack in the economy to keep core inflation fairly muted, and that underpins CIBC’s call for the Bank of Canada to hold the policy rate steady through 2026. (Paul.Vieira@wsj.com; @paulvieira)

0723 ET – Brent crude’s front-month price will appear to drop on Friday due to a futures-contract rollover, even though there is no change in underlying fundamentals. The June Brent futures contract expires Thursday, meaning that from Friday the July contract becomes the new front-month contract. The market is currently in backwardation, where near-term oil is priced higher than later-dated barrels. As a result, June is trading above July, so the switch in reference contract mechanically lowers the displayed front-month price. However, this doesn’t reflect any shift in physical supply, demand, or market conditions. The physical Dated Brent benchmark, which reflects real cargo pricing, won’t be impacted by the contract roll in the futures market. In afternoon European trading, Brent for June delivery is down 2.6% to $114.97 a barrel, while the July contract falls 1.1% to $109.18 a barrel. (giulia.petroni@wsj.com)