Here are five things you need to know this morning
Canadian economy falls into technical recession: The Canadian economy fell into technical recession to start this year. Real gross domestic product unexpectedly fell by 0.1 per cent on an annualized basis during the first quarter. That follows a one per cent contraction in the fourth quarter, a downward revision from a 0.6 per cent decrease previously reported by StatCan. Weak business and government spending is holding back the economy, as Canada deals with tariff restrictions with its largest trading partner, the United States. The last time Canada recorded two consecutive quarters of negative growth was in 2020 during the COVID-19 pandemic. Before that, it was in 2015 amid low oil prices.
Laurentian misses expectations: Laurentian Bank posted weaker-than-expected second-quarter earnings as the bank set aside more money for potentially bad commercial loans. The bank says higher loan-loss provisions weighed on overall profitability, with the banks efficiency ratio also deteriorating significantly. Late last year Laurentian agreed to be split up and sold, with its commercial operations going to Fairstone Bank while National Bank purchased the retail and small business segment.
Apotex files for IPO: Apotex has filed for an initial public offering in Toronto, setting the stage for one of Canada’s largest stock market debuts in recent years. Bloomberg News previously reported the company could raise between $750 million and one billion dollars through the offering. The generic drugmaker says the IPO will include newly issued shares as well as shares sold by controlling shareholder SK Capital Partners. Apotex was founded in 1974 by Barry Sherman. Sherman and his wife were found dead in their Toronto home in 2017 in what police described as a double homicide. The case is still unsolved.
Gap cuts forecast on Old Navy miss: Gap shares are down in pre-market trading as the company cut its full-year sales outlook. The clothing retailer fell short of sales expectations in its first quarter due to challenges in its dress styles at its Old Navy division. The company says it did not have the right fashion and value equation.
The Buffett test: A company’s ability to make money is about more than just quarterly profits. BNN Bloomberg contributor Jon Erlichman speaks to veteran investor David Driscoll about one of his favorite investing tools, which is also a favourite of the Oracle of Omaha.
