Noah Zivitz

Managing Editor, BNN Bloomberg

Archive

What will OPEC+ do as oil hovers near a seven-year high and as the cartel and its allies get an earful from the U.S. about pumping more oil? That was the big question heading into today. Late this morning, we found out: the group of oil-producing nations are staying the course, with another output hike of 400,000 barrels per day in December. The consequences are far reaching as the world grapples with inflation, while oil producers and their investors reap the reward of high oil prices (more on that below).

FED FALLOUT

U.S. Federal Reserve Chair Jerome Powell addressed those consumer-level inflation pressures yesterday after his central bank laid out its roadmap for tapering asset purchases. “We understand completely what [households are] going through and we will use our tools over time to make sure that [high inflation] doesn't become a permanent feature of life,” he said. Investors seemed to like what they read and heard from the Fed yesterday, as the major U.S. markets closed at all-time highs (for the Nasdaq, it was an eighth straight day of gains). Enthusiasm is fading this morning, with futures pointing to a flat open.

AWAITING OSFI’S GREEN LIGHT

Can only imagine bank executives and investors across the country are eagerly waiting for the Office of the Superintendent of Financial Institutions’ announcement this afternoon. All we know for sure is that Superintendent Peter Routledge will provide an update on capital distributions. Those capital distribution options have been limited since March of last year when banks were blocked from raising their dividends and buying back shares. We’ll break the news when it happens and look forward to speaking with Routledge at 4:10 p.m.

EARNINGS BONANZA

Way too many to dissect here from A-Z. Here are some of the notables since after yesterday’s closing bell:

• Canadian Natural Resources reported third-quarter cash flow from operating activities that doubled from a year earlier. Naturally, it announced a 25 per cent increase to the quarterly dividend (putting the payout at 58.75 cents per share). The company also said it’s now aiming for sub-$15 billion in debt (net debt was $15.9 billion at quarter-end).
• Tourmaline Oil, a darling among our guests, reported a 172 per cent year-over-year surge in cash flow. And management said it’s planning additional special dividends after recently dishing out a one-time payment that was greater than the total annual dividend.
• Paramount Resources announced a tripling of its monthly dividend (to six cents per share) and raised its full-year free cash flow forecast while reporting a 73 per cent sequential climb in adjusted funds flow.
• Three of Canada’s insurance giants reported late yesterday. Manulife Financial narrowly missed profit expectations amid weakness in its Asia operations as COVID restrictions intensified. Sun Life Financial narrowly beat expectations thanks entirely to surging profitability in its asset management business. Great-West Lifeco said its third-quarter performance was hampered by claims tied to catastrophic weather events and life insurance claims in the U.S. resulting from the pandemic.
• The third quarter was a messy one for Barrick Gold. Revenue down 20 per cent year-over-year, adjusted profit down 42 per cent, and free cash flow tumbled 63 per cent. Looking at the operations: production slipped, while realized gold prices fell eight per cent and all-in sustaining costs rose. So, basically everything heading the wrong direction.
• BCE (which owns BNN Bloomberg via Bell Media) said it’s on track to hit its full-year financial forecasts and reported third-quarter revenue that nearly returned to pre-pandemic levels two years prior. Notably, wireless service revenue climbed five per cent thanks in part to perked-up roaming activity and the addition of 114,821 net new postpaid subscribers. We’re looking forward to speaking with CEO Mirko Bibic this afternoon.  
• Quebecor said it added 40,900 wireless subscribers in the third quarter and saw revenue surge 21.3 per cent in its media division, helping it outpace profit expectations.
• Maple Leaf Foods CEO Michael McCain warned this morning his company is “seeing a marked slowdown” in its plant-based protein business and said his team is currently reviewing the “investment thesis” for that division. On the upside, adjusted profit per share surged 112 per cent in the third quarter thanks to Maple Leaf’s flagship meat operations.
• Lightspeed reported fiscal second quarter that nearly tripled; however, the point of sale service provider warned its full-year adjusted loss will be wider than previously anticipated. In its release, the company noted that supply chain problems are hurting its customers and itself (as it relates to hardware availability). CEO Dax Dasilva joins us shortly after 9 a.m.
• Spin Master is a standout mover after its earnings. The toy maker’s shares topped the TSX leaders board in early trading after reporting a 25 per cent surge in third-quarter revenue and raised its forecasts. Its CEO also championed his company’s supply chain team, who he said “expertly managed the market disruptions.”

NOTABLE U.S. MOVERS

• Moderna shares have been down more than 10 per cent in pre-market trading after the company cut its forecasts for full-year COVID-19 vaccine deliveries and product sales.
• Qualcomm shares have been up almost 10 per cent in early trading after the semiconductor maker forecast profit that’s well ahead of the average analyst estimate.

NOTABLE RELEASES/EVENTS

• Notable data: Canadian trade balance, U.S. trade balance and initial jobless claims
• Notable earnings: Canadian Natural Resources, BCE, Quebecor, Barrick Gold, Lightspeed, Constellation Software, Kinaxis, Open Text, Arc Resources, Enerplus, Pembina Pipeline, Fairfax Financial, Saputo, Maple Leaf Foods, Gildan Activewear, Uber Technologies, Peloton Interactive, Airbnb, Expedia Group 
• 8:00: Bank of England releases interest rate decision
• 9:45: Supreme Court of Canada judgment in whether to hear Mosten Investment’s appeal of lower court ruling in dispute with Manulife Financial 
• 11:15: Former Bank of Canada Governor Stephen Poloz addresses ULI Toronto ESG Symposium
• 11:30: Environment and Climate Change Minister Steven Guilbault makes announcement at COP26 (plus avail)
• 12:10: Innovation, Science and Industry Minister François-Philippe Champagne holds media avail in Washington, D.C.
• Approx. 13:00: Ontario Finance Minister releases economic outlook and fiscal update (1415 media avail)
• 14:00: OSFI Superintendent Peter Routledge delivers remarks on future priorities, policy agenda, and capital distributions for federally regulated financial institutions (media call at 15:00)
• 14:00: Housing Minister Ahmed Hussen and Vancouver Mayor Kennedy Stewart make “major housing-related announcement” in Vancouver
• OPEC+ ministerial meeting https://www.opec.org/opec_web/en/press_room/6647.htm