Nov 16, 2017
BNN's Daily Chase: Wal-Mart earnings; Alberta, Quebec to present cannabis legislation
By Noah Zivitz
We’re getting a look this morning at how Wal-Mart, the world’s former undisputed retail leader, is faring in the face of intense competition. And make no mistake about it, as far as Wal-Mart is concerned, digital growth is crucial as it tries to fend off Amazon. Indeed, e-commerce sales surged 50 per cent in the third quarter. Overall revenue rose to US$123.2 billion, profit narrowly topped estimates, and the company is raising its full-year profit forecast. If there’s a wrinkle, check out Wal-Mart’s performance in Canada: Net sales rose 1.9 per cent and same-store sales rose one per cent. Both those figures are significantly below second-quarter growth rates (of 3.4 per cent and 2.5 per cent, respectively).
'MONETARY POLICY CAN’T DO EVERYTHING': WILKINS
The Bank of Canada’s second-in-command addressed a New York audience last night and mapped out how the central bank is dealing with the uncertainty that she and her global peers are facing. Senior Deputy Governor Carolyn Wilkins said the Bank of Canada is “following [NAFTA] developments very closely”. She also argued caution is still warranted because the bank is unsure how recent rate increases will flow through a highly-indebted economy at a time when consumers face stricter mortgage rules. “Monetary policy can’t do everything,” she said, “and its goal is primarily to target inflation.”
PROVINCIAL CANNABIS LEGISLATION
Alberta and Quebec are set to present their respective cannabis legislation today. Alberta’s plan will be tabled around 5:00 p.m. ET. Timing in Quebec is less clear at this point. Advance reporting by The Montreal Gazette indicates Quebec will set the minimum age at 18, and a crown corporation will be tasked with managing retail sales.
DA VINCI RECORD AUCTION
Leonardo da Vinci’s “Salvator Mundi” sold for a record US$450 million at a Christie’s auction in New York last night. The purchase price includes the US$400-million bid, plus fees – and far surpassed the pre-auction US$100-million estimate. The seller was Dmitry Rybolovlev, who made his riches at potash producer Uralkali. The buyer is unknown at this time. We’ll chase some perspective on the auction and general state of art market.
ACKMAN ON TIM HORTONS' WEAKNESS
Bill Ackman is weighing in on Tim Hortons' recent challenges. The renowned activist investor and hedge fund manager said in a letter to his Pershing Square shareholders the iconic chain's same-store sales weakness can be partly attributed to slow uptake of Tims' espresso-based drinks and new lunch items. "We believe sales in recent quarters have also been negatively impacted by the recent public dispute with a group of franchisees," he added. Nonetheless, Ackman says Tims' parent company, Restaurant Brands International, "remains a compelling value".
OTHER NOTABLE STORIES:
-HBC said late yesterday it will not close the planned US$500-million investment by Rhone Capital until after Land & Buildings’ appeal to the OSC is heard.
-Suncor CEO Steve Williams says his company is “well-positioned to return more free cash flow to shareholders through dividends and share buybacks” next year with production expected to rise 10 per cent and capital spending seen falling approximately $750 million to ~$4.75 billion.
-Bloomberg is reporting Boeing sent a letter to U.S. Commerce Secretary Wilbur Ross this week questioning the likelihood of Airbus and Bombardier ever building a CSeries assembly line in Alabama.
-U.S. President Donald Trump is expected to meet with House Republicans early this afternoon ahead of the vote on tax reform.
NOTABLE RELEASES/EVENTS
-Notable earnings: Wal-Mart, Best Buy, Gap
-Notable data: Canadian international securities transactions, Canadian manufacturing sales, ADP launches Canadian employment report
-6:00 a.m. ET: Environment and Climate Change Minister Catherine McKenna announces “power past coal” plan at COP23 with U.K. Climate Change Minister Claire Perry (plus media call at 7:00 a.m. ET)
-8:00 a.m. ET: eBay CEO Devin Wenig and Shopify COO Harley Finkelstein speak at Rotman School of Management panel in Toronto
-10:00 a.m. ET: Conservative Party Leader Andrew Scheer delivers remarks at Vancouver Board of Trade da vinci
-10:30 a.m. ET: Bank of Canada publishes semi-annual Review
-1:45 p.m. ET: Alberta Premier Rachel Notley delivers remarks and holds media avail in Edmonton at Association of Municipal Districts and Counties convention
-2:20 p.m. ET: Justin Trudeau meets with B.C. Premier John Horgan in Vancouver
-~5:00 p.m. ET: Alberta government tables cannabis legislation
-6:00 p.m. ET: Enbridge CEO Al Monaco receives Energy Person of the Year award in Toronto
-11:00 p.m. ET: Tesla to unveil semi truck
-NAFTA talks continue in Mexico City
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.
