THE RIPPLE EFFECT FROM OIL IN BEAR MARKET TERRITORY
The ripple effect from oil’s slump into bear market territory is being felt far and wide. Today we’ve got investable, economic and geopolitical angles to consider amid fallout from crude’s 20 per cent+ plunge since February.
On the actionable front, we’re chasing the best and worst performers from the February 23 peak. Not only is Cenovus the energy group’s laggard, it’s also the TSX’s worst overall performer during the period with its 46.6 per cent negative return. At the other end of the spectrum, I’d like to hear more about how a name like Paramount Resources (+6 per cent) has managed to outperform. We’ll get some industry perspective with Birchcliff Energy CEO Jeff Tonken at 8:30 a.m. ET.
How about the ripple effect for Canada’s economy? Less than a month ago, the Bank of Canada declared the adjustment to lower oil prices was “largely complete”; and, more recently, Senior Deputy Governor Carolyn Wilkins stirred up expectations for a rate hike. Now we’ve got the loonie drifting back toward 75 cents US and BMO Chief Economist Doug Porter warned clients late yesterday the domino effect from sagging oil prices could force the central bank to “stay on the sidelines for a while longer yet.”
Regionally, what about the stakes for Alberta? Worth remembering that Alberta’s latest fiscal plan is based on US$55-oil in the 2017-18 fiscal year, US$59 in 2018-19, and US$68 in 2019-20.
From a geopolitical standpoint, there’s been a shakeup in the Saudi royal palace. King Salman has appointed his son, Mohammed Bin Salman, crown prince – putting him next in line for the throne. Also should be noted oil has tumbled almost 12 per cent from May 25, when OPEC extended the Saudi-led production cuts.
KALANICK GIVES UP AS UBER CEO
As controversy snowballed at Uber over the last couple months, we’ve wondered how long investors would put up with the turmoil. Seems like they reached their breaking point. Travis Kalanick has resigned as Uber’s CEO, with The New York Times reporting his exit was triggered by a “shareholder revolt”, with five of Uber’s investors apparently calling for his head on Tuesday. Now the most important question is who the board chooses as the next chief executive officer.
BNN Advisor
Vancouver: Housing concerns cross generations
Winnipeg and Saskatchewan: The loonie and U.S. protectionism weigh on Central Canada
Yellowknife and Whitehorse: The hurdles of northern living and aboriginal issues
HOME CAPITAL DEPOSITS SPIKE
That’s something we haven’t been able to say lately. The lender disclosed late yesterday its high interest savings account deposit base rose to $112.3 million on Monday from $98.5 million at the end of last week. Could this be a sign that confidence in the firm is at least stabilizing? Or just a blip?
CONCORDIA ENLISTS ADVISOR FOR FINANCIAL ADVICE
Concordia International has enlisted an advisor to evaluate its options. The drugmaker said today it’s tapped Perella Weinberg Partners to provide financial advice to “optimize its capital structure.” Perella will also help “explore and evaluate potential transactional alternatives.” Keep in mind, Concordia had a protracted review of strategic alternatives last year, which culminated in October with a debt offering.
SEARS’ FUTURE IN DOUBT
Sears Canada is reportedly preparing to file for creditor protection within weeks. This shouldn’t come as a shock to anyone who read the company’s warning last week, or heard our conversation with ex-CEO Mark Cohen (who predicted Sears could be forced to file, and might not even exist by the end of the year). Sears Canada has not returned our request for comment. At this point, I mostly want to hear about the stakes for landlords and the broader commercial real estate industry – particularly when you pair it with uncertainty about Hudson’s Bay Company’s next moves.
NOTABLE GUESTS:
11:20 a.m. ET: Former Goldcorp CEO Chuck Jeannes on how the Canada Infrastructure Bank could benefit the mining industry
NOTABLE RELEASES/EVENTS
-Notable earnings: Oracle
-Notable data: U.S. existing home sales
-6:30 a.m. ET: Natural Resources Minister Jim Carr scrums in St. John’s after keynote at Oil and Gas Industries Association conference
-9:30 a.m. ET: Groundbreaking ceremony for CIBC’s new HQ, Bay Park Centre, in Toronto
-10:00 a.m. ET: BlackBerry holds AGM in Waterloo, Ontario
-11:00 a.m. ET: Agriculture Minister Lawrence MacAulay holds media call after meeting with Mexican and U.S. counterparts
-11:00 a.m. ET: Conservative Party Leader Andrew Scheer delivers end of session remarks and holds media avail in Ottawa
-12:00 p.m. ET: Toronto Mayor delivers annual luncheon speech at Toronto Board of Trade
-12:00 p.m. ET: Justin Trudeau makes announcement in Ottawa
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.
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