Dec 5, 2017
BNN's Daily Chase: BMO closes big bank earnings; Trudeau meets Chinese president
By Noah Zivitz
Bank earnings season came to a close today with BMO Financial Group rounding out the Big Six’s quarter. Total profit slipped nine per cent to $1.23 billion. As for whether the bank beat or missed, that seems open to some interpretation. Adjusted EPS was $1.94. Analysts, on average, expected $1.99. BMO, however, points out it took at 17-cent hit from mortgage reinsurance claims. Either way, investors are being rewarded in the form of a sweeter dividend as the quarterly payout rises three cents to $0.93 per share. As for actual storylines, we’re seeing BMO post steady growth in its core Canadian banking division. Profit also picked up in its U.S. division, where BMO says it’s looking for “continued growth opportunities. BNN'S Paul Bagnell will sift through those details (and more), and frame BMO’s quarter against what we’ve seen from its peers.
TORONTO HOME SALES RISE AHEAD OF NEW MORTGAGE RULES
Buyers and sellers are jockeying for position in Canada's largest housing market ahead of tough new mortgage rules. Home sales across the Greater Toronto Area rose more than three per cent in November, and active listings more than doubled. Prices are still well below the April peak. But the regional real estate board says looming stress tests could be pushing buyers off the sidelines.
KINDER MORGAN PUTS CANADA ON NOTICE
Suffice to say Kinder Morgan Canada is growing increasingly frustrated with delays and regulatory uncertainty holding back its controversial Trans Mountain Expansion project. “[Kinder Morgan] must have a clear line of sight on the timely conclusion of the permitting and approvals process before we will commit to full construction spending,” Canadian President Ian Anderson said in a press release late yesterday. And that was a more muted version of the warning issued last month in a filing with the NEB (IE, “[if] faced with unreasonable regulatory risks due to a lack of clear processes to secure necessary permits … it may become untenable for Trans Mountain’s shareholders … to proceed.” We’ll need to assess how much political capital the federal government is willing to expend to ensure TMEP sees the light of day.
TRUDEAU IN CHINA
The Prime Minister is dining with Chinese President Xi Jinping in the aftermath of yesterday’s bumpy start to his visit. Speaking with reporters today, Trudeau underscored Canada is a trading nation – while pointing out it’s not free trade or bust. “We will continue to deal with multiple different ways of benefiting our two economies,” he said.
MARKETS DEFY TRUMP
Just about 24 hours ago, U.S. President Donald Trump predicted in a tweet it “could be a big day for the Stock Market – and YOU!” For a while, it looked that way – with the Dow Jones Industrial Average surging as much as 302 points before it swooned into the close with just a 58-point gain on the day amid concern about fine print in the Senate’s tax bill. We’ll establish why there’s such a fuss over the Alternative Minimum Tax rate.
JIMMY PATTISON’S VIEW OF THE WORLD
Canadian billionaire Jimmy Pattison joins BNN's Jon Erlichman for a rare interview today on BDAM. They touch on a ton of topics: outlook for the lumber industry (“good possibility” of consolidation), Amazon (“we’ll have to see what it does” in the grocery industry), rising minimum wages (he predicts layoffs), and Bitcoin (“never invested in it”), among others. Watch for the interview at 8:40 a.m. ET, or any time afterward on BNN.ca.
OTHER NOTABLE STORIES:
-TSX record high watch: 16,131.79 is the all-time high set on Nov. 7.
-Bank of Nova Scotia has firmed up its agreement with Banco Bilbao Vizcaya Argentaria to buy 68.19 per cent of BBVA Chile for $2.9 billion. But it won’t be an outright takeover. Scotia says the minority shareholder Said family “has indicated their willingness to potentially remain in the business.”
-Shoppers Drug Mart has signed up Aphria as its medical cannabis supplier.
-A new survey by Sotheby's International Realty Canada and Mustel Group shows one-third of baby boomers in Vancouver, Toronto, Calgary and Montreal say they plan on giving a living inheritance to help beneficiaries buy a home, with a median gift range of $25,000 to $49,999.
NOTABLE RELEASES/EVENTS
-Notable earnings: BMO, Laurentian Bank, Roots
-Notable data: Canadian trade balance, U.S. trade balance
-7:00 a.m. ET: Toronto Real Estate Board releases November sales data
-8:30 a.m. ET: Scotia conference call on BBVA Chile deal
-11:00 a.m. ET: Supreme Court of Canada nominee Sheilah Martin takes questions from lawmakers in Ottawa
-Prime Minister Justin Trudeau in China (through Dec. 7)
Every morning BNN's Managing Editor Noah Zivitz writes a ‘chase note’ to BNN's editorial staff listing the stories and events that will be in the spotlight that day. Have it delivered to your inbox before the trading day begins by heading to www.bnn.ca/subscribe.
