Global stocks and U.S. futures were fighting to cling onto gains in early trading on this final day of a first quarter that’s seen the S&P/TSX composite index sink 23.6 per cent thus far. Encouraging manufacturing data out of China and an oil-price rally are helping to set the backdrop this morning as investors continue navigating the COVID-19 crisis. And if you dig deep enough, there’s hope to be found in the annual letter from BlackRock’s CEO, who is indisputably one of the most revered figures in global finance. “The world will get through this crisis. The economy will recover. And for those investors who keep their eyes not on the shaky ground at our feet, but on the horizon ahead, there are tremendous opportunities to be had in today’s markets,” Larry Fink wrote, while acknowledging it’s “impossible” to say if markets have bottomed.
ALBERTA INVESTS IN KEYSTONE XL
The big news came six paragraphs deep in a press release today from TC Energy confirming that it’s planning to proceed with the Keystone XL pipeline: Alberta is investing US$1.1 billion in the project. If we pause to reflect on Alberta Premier Jason Kenney’s comments in the last couple months, it’s not a complete surprise. But it’s definitely a sign he’s putting his province’s money where his mouth is. We’re chasing reaction.
IN CONVERSATION WITH 40% OF THE BIG FIVE CEOs
What a day for BNN Bloomberg, with interviews on deck with two of Canada’s Big Five bank CEOs. CIBC’s Victor Dodig joins Jon Erlichman at 10 a.m. ET. BMO’s Darryl White joins Amanda Lang shortly after 1 p.m ET. We’ll explore their strategies for managing the current state of turmoil and get insight on the remarkable coordination being displayed by banks to provide relief to borrowers.
West Texas Intermediate crude was up as much as 8.3 per cent overnight after three straight days of losses that saw the American benchmark briefly trade below US$20/barrel yesterday. Take your pick of catalysts: China’s official purchasing managers’ index unexpectedly surged back into expansion territory this month, according to data released last night; meanwhile, U.S. President Donald Trump spoke yesterday with Russia President Vladimir Putin about the price war with Saudi Arabia.
NOTABLE CORPORATE COVID-19 DEVELOPMENTS:
-Imperial Oil today joined the long list of spending cuts in the oil patch. The big Canadian integrated producer is reducing this year’s capital budget by 30 per cent to a range of $1.1-$1.2 billion. It’s also cutting operating expenses by $5000 million. CEO Brad Corson said in a release the pandemic and current commodity price environment pose “many challenges”.
-Air Canada is temporarily letting go 16,500 staff members and slashing its second-quarter capacity as much as 90 per cent in a pair of moves that CEO Calin Rovinescu says “will help ensure that Air Canada can manage through this crisis.” He’s also giving up all of his base pay this year. We’re chasing reaction from Air Canada’s union and will continue assessing stakeholder wish lists for targeted aid from the federal government.
-A new survey released by the Canadian Federation for Independent Business shows 32 per cent of small businesses that have been forced to close are unsure if they’ll re-open their doors on the other side of the crisis.
-Restaurant Brands International is making US$70 million in cash advances available to its restaurant owners in North America, as well as offering rent relief for Burger King and Tim Hortons operators. It’s a goodwill gesture for the fast-food conglomerate that not too long ago was in the news because of friction with its franchisees. We’ll speak with CEO Jose Cil about the strategy, and the company’s liquidity, around 1020 ET.
-Royal Bank of Canada CEO Dave McKay vowed in a memo to staff yesterday that his bank won’t cut any jobs this year as a result of the virus.
-Aecon Group withdrew its 2020 forecasts late yesterday afternoon due to the current state of uncertainty. The company also said it’s pausing share buybacks and considering options to cut costs
-Gap announced yesterday afternoon it will temporarily lay off the majority of its store staff in Canada and the U.S., pause their pay, and continue to offer applicable benefits. The retailer is also cutting an unspecified number of corporate positions.
-BRP said it’s slowing or suspending work at its manufacturing facilities as well as reducing hours for office staff.
-Visa has once again warned on the virus’s impact. In a filing, the credit card company said it has seen a “rapid deterioration” in cross-border travel spending as well as a “meaningful deterioration” in spending on domestic travel, restaurants, entertainment and fuel.
-Notable data: Canadian GDP, Caixin China PMI
-Notable earnings: BlackBerry (after hours)
-9:30 a.m. ET: BMO annual meeting
-11:15 a.m. ET: Prime Minister Justin Trudeau addresses Canadians from Ottawa
-12:00 p.m. ET: Alberta government house leader Jason Nixon discusses legislation to respond to pandemic and energy sector downturn at avail in Edmonton (Note also an embargoed technical briefing at 2:00 p.m. ET re. Liability Management Statutes Amendment Act)
-1:00 p.m. ET: Ontario Premier Doug Ford leads provincial update on COVID-19
-5:00 p.m. ET: U.S. Coronavirus Task Force holds briefing at the White House
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.