Here are five things you need to know this morning
U.S. government shutdown hits markets: The U.S. government has entered a shutdown for the first time in nearly seven years, after lawmakers failed to reach a funding deal. Essential government services will continue, but workers may not be paid until the shutdown ends. Non-essential services will also likely be suspended. Investors are bracing for a blackout in economic data, as the shutdown means the September jobs report will be delayed. The economic fallout is expected to ripple nationwide. The shutdown is impacting financial markets as well, with U.S. stock futures trading lower and the price of safe-haven gold rising.
Lithium Americas gets U.S. government investment: One stock trading higher in the pre-market is Lithium Americas. That’s after the U.S. government agreed to acquire a stake in the Vancouver-based company. The U.S. will take a five per cent stake in Lithium Americas, as well as a five per cent stake in the company’s Nevada mining project. That project is forecast to become a major lithium source for the U.S. domestic supply-chain.
Nike sprints ahead: Shares of Nike also traded higher in the premarket after revenue in the company’s most-recent quarter rose by one per cent. Profit also topped expectations. Analysts say the results show the sneaker and sportswear giant’s efforts to turn things around are starting to pay off. Nike’s CEO says efforts to roll out new products, boost marketing and clear inventory contributed to the better-than-expected results.
Buffett going shopping: There are multiple reports that Warren Buffett’s Berkshire Hathaway is nearing a deal to acquire Occidental Petroleum Corp.’s petrochemical business for about US$10 billion. It would be Berkshire’s largest deal since its acquisition of Alleghany in 2022 for US$13.7 billion. After years spent refraining from large deals and progressively unwinding big holdings like his stake in Apple, Buffett appears to be back on the offensive. The 95-year-old chief executive officer, set to leave that role at the end of the year, placed a US$1.6 billion bet on UnitedHealth Group this summer.
Business Council calls for deficit reduction: The Business Council of Canada says the country is in an “investment crisis” but warns prosperity can’t be achieved by taking on more debt. In a letter to Prime Minister Mark Carney, the council’s president and CEO Goldy Hyder said if the federal government intends on financing investment by incurring more debt, then it better have a plan to bring it down. “We recognize the difficult starting point and the need for upfront investments, but that should be underwritten by meaningful year-over-year reductions in the absolute deficit,” Hyder wrote, saying at the very least the government should halve this year’s deficit within three years. The council’s submission is one of nearly one thousand the government received in recent weeks, ahead of the Liberals’ budget tabling on November 4.
