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Noah Zivitz

Managing Editor, BNN Bloomberg

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Alberta’s energy minister has blasted Total after the global energy giant took US$7 billion in writedowns on its oil sands assets, largely based on climate considerations. Sonya Savage lambasted Total in a release, calling the company’s announcement “highly-hypocritical” while pointing to its footprint in countries Myanmar, Nigeria and Russia. Total, which holds stakes in the Fort Hills and Surmont projects, said it won’t sign off on any expansion projects in the oil sands and also cut ties with the Canadian Association of Petroleum Producers. Where does this lead? We’re chasing reaction.

 

WORST U.S. GDP EVER

The economic contraction south of the border lived up to the advance-billing as being the worst ever, as output shrank 32.9 per cent. Sure, that wasn’t quite as miserable as Wall Street expected (ie, 34.5 per cent), but that’s hardly something to be reassured about. On top of that, the latest initial jobless claims in the U.S. rose to 1.43 million.

GOLD EARNINGS

We’re looking forward to hearing from Agnico Eagle Mines CEO Sean Boyd this morning, fresh off reporting a second quarter when COVID-19 limited the company’s production. Nonetheless, Agnico raised its full-year production forecast and Boyd said in a statement he’s expecting to generate “significant” free cash flow in the second half of the year. Kinross Gold also reported late yesterday, delivering a near-tripling of second-quarter profit.

TRUDEAU, TELFORD TESTIFY         

Prime Minister Justin Trudeau and Katie Telford, his chief of staff, will give their side of the story in the controversy surrounding WE and the federal government’s ill-fated decision to hand the charity a sole-sourced contract to administer the Canadian Student Service Grant program. Testimony earlier this week put the spotlight on the charity’s governance. Today, Trudeau’s greatest challenge will be taking back control of the message and allowing the government, and public, to turn their focus back to COVID-19 emergency programs that have pushed the feds toward a $343-billion deficit. That will be challenging so long as everyone’s waiting for the ethics commissioner to wrap up his probes of the matter.

MANAGING OFFICE SPACE

We’ll get good insight into the future of office buildings this morning when Allied Properties REIT CEO Michael Emory joins Jon fresh off reporting second-quarter results that showed 94.5 per cent of rent was collected and net profit was relatively stable. The company also pointed out that not a single user of its workspace “failed as a result of the pandemic.” Nonetheless, the WFH trend is clear (with Shopify as the highest-profile example of there being no turning back). We look forward to discussing that with Michael.

OTHER NOTABLE STORIES

-Yet another sign of the times in the energy sector: Chevron announced today it will co-develop renewable power projects with Algonquin Power & Utilities. The four-year pact seeks to generate at least 500 megawatts of electricity

-Husky Energy swung to a net loss of $304 million in the second quarter, while funds from operations collapsed to just $18 million. The company said it's continuing to seek additional cost savings.

-Maple Leaf Foods' diversification strategy is on full display in its second-quarter earnings, with sales from plant protein operations surging 41.4 per cent (compared to 5.8 per cent growth in its core meat business). The company also swung to a net profit of $25.7 million. That said, the plant-based boom is still a drag on profit with that unit posting an operating loss in the quarter.

-The pressure on Big Oil is evident beyond Total. Royal Dutch Shell today swung to an US$18-billion quarterly net loss amid almost US$17 billion in impairment charges. The global supermajor’s adjusted profit collapsed to just US$638 million, with its trading operations standing out as star performer in an otherwise challenging environment.

-Johnson & Johnson said today it’s aiming to start Phase 3 trials of its COVID-19 vaccine in September. To underscore just how fast the process is moving, the company also released results from pre-clinical studies, showing encouraging results. Phase 1/2a trials are currently underway. This is a good time for us to point out we’re speaking with Health Minister Patty Hajdu at 2pm about Health Canada’s decision to conditionally approve use of Gilead Sciences’ remdesivir and the outlook for a more universal vaccine or treatment.

-Some mining M&A: Auryn Resources announced late yesterday it’s buying Eastmain Resources in a stock-based deal that will see the combined company renamed Fury Gold, with a spin-off of Peruvian assets allowing the entity to focus on operations in Canada.

-Torstar late yesterday abandoned its previously-stated goal of closing the privatization arrangement with NordStar “on or about” today as a result of the appeal process launched by jilted rival bidder Canadian Modern Media Holdings.

NOTABLE RELEASES/EVENTS

-Notable data: U.S. GDP (second quarter), U.S. initial jobless claims

-Notable earnings: TC Energy, Husky Energy, Crescent Point Energy, Fortis, Newmont, Fairfax Financial, Maple Leaf Foods, ARC Resources, Gildan Activewear, Real Matters, Amazon.com Inc., Apple, Alphabet, ConocoPhillips, Ford, United Parcel Service, MasterCard, Kraft Heinz, Procter & Gamble, Molson Coors, Eli Lilly, Expedia Group

-1:00 p.m. ET: Conservative Party of Canada Leader Andrew Scheer holds media avail in Regina to discuss WE scandal

-Prime Minister Justin Trudeau and chief of staff Katie Telford address House Finance Committee (3:00 p.m. ET and 4:15 p.m. ET, respectively)

Every morning BNN Bloomberg's Managing Editor Noah Zivitz writes a ‘chase note’ to BNN Bloomberg'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.bnnbloomberg.ca/subscribe