Here are five things you need to know this morning:
Investors increase bets on Trump after weekend attack: It’s hard to tell what the long term impact of the dramatic events this weekend in Pennsylvania will be, but one clear short term impact is that markets are gaining conviction that there’s going to be a second Trump Presidency. The so-called “Trump trade” has been gaining steam ever since Joe Biden’s performance in the presidential debate last month, but following the assassination attempt this weekend, investors increased their bets that Trump is likely to prevail in the November vote. U.S. Treasuries fell on Monday, with long-dated bonds selling off on bets that Trump’s fiscal and trade policies will spur growth. The yield on 30-year bonds hit 4.44 per cent this morning. That’s higher than the yield on two-year bonds for the first time since January, and a clear directional sign. “You are seeing the favourite trade of a Trump presidency which is a curve steepener,” Bloomberg quoted Fredrik Repton, senior portfolio manager with Neuberger Berman, as saying. Shares in Trump media jumped more than 50 per cent in premarket trading on Monday morning.
Steelmaker Cleveland-Cliffs offers 87% premium to buy Stelco: U.S. steelmaker Cleveland-Cliffs has signed a deal to buy Canada’s Stelco Holdings in a cash-and-stock takeover worth more than $3.85 billion. Under the terms of the deal, which still requires shareholder and regulatory approval, Cleveland will pay $60 and 0.454 of its own shares for every share of Stelco. That values Stelco at about $70 per share, an 87 per cent premium to where it was on Friday. Stelco’s main assets are two steel-making facilities in Ontario, including its iconic Hamilton steelworks, and a newer facility on Lake Erie. The deal is the first major move by Cleveland-Cliffs since its plan to buy rival U.S. Steel fell apart last year.
Corus swings to loss, warns of ‘material risk’ of breaking debt covenant: Canadian media company Corus Entertainment posted quarterly results this morning, and the numbers showed a worsening financial picture for the company. The company swung to a 10-cent-per-share loss, worse than the expected EPS of 7 cents. Revenue fell by 16 per cent from last year to $331 million, worse than expected, and the company generated $18.4 million of free cash flow. That’s down 29 per cent from last year. The company says there is a “material risk” that it may soon be in breach of the terms of some debt covenants, and adds that various uncertainties may cast “significant doubt about the company’s ability to continue as a going concern.”
CAP REIT sells manufacturing home unit to TPG: TSX-listed Canadian Apartment Properties REIT is selling its manufacturing home community business to TPG Real Estate for $740 million. The business consists of 12,138 residential lots across 75 locations across Canada and CAP says it will use the proceeds in part to pay down debt. Bloomberg first reported on discussions between the two sides back in March.
U.S. bank earnings continue with Goldman Sachs: Goldman Sachs trading unit powered a surge in profit at the investment bank last quarter. Net revenue rose by 17 per cent to more than US$12 billion, beating expectations. And provisions for credit losses fell by 54 per cent to $282 million. Earnings came in 2.5 times higher than the same period a year ago, when the company was plagued by losses in real estate and consumer banking.
