First Look With Surveillance: Ruble High, China Growth
There’s no one-size-fits-all way to frame the start of earnings season for Canada’s Big Six. Sure, Bank of Montreal and Bank of Nova Scotia both announced dividend hikes this morning. But from there, the primary storylines are distinct. Take BMO, where revenue got a huge boost in the fiscal second quarter because of accounting tied to the pending takeover of Bank of the West. Strip that away, and adjusted earnings barely met expectations. Over at Scotia, it was a clear-cut beat as the bank’s international profit engine revved back up. We’ve sifted through plenty of details — including credit quality and, shall we say, tepid mortgage growth — at BNNBloomberg.ca, and we’ll have in-depth analysis on air throughout the day, starting with Rob Wessel from Hamilton ETFs at 8 a.m. Plus, keep an eye out for Jon’s interview with Scotia CEO Brian Porter.
MARKETS ON EDGE
U.S. futures haven’t given us a solid indication of what to expect this morning. That’s no surprise seeing as how minutes from U.S. Federal Reserve’s last meeting will be released this afternoon; no doubt that investors/traders/algorithms will take their cues from that. If you missed it, check out Bill Ackman’s Twitter feed. He’s had plenty to say about the Fed in the last 18 hours or so, including an emphatic call for the central bank to hike rates aggressively (and soon) to subdue inflation. In an earlier thread yesterday afternoon, Ackman painstakingly mapped out why he thinks “there are no buyers for stocks” presently. Another worry facing investors is the outlook for China’s economy as that country grapples with COVID; today, the uncertainty was underscored by Premier Li Keqiang, who said “difficulties in some aspects” are worse than at the onset of the pandemic.
TWITTER FACES INVESTORS
Who knows what to expect at Twitter’s annual meeting today. While Elon Musk’s takeover attempt isn’t formally on the agenda, we can only imagine it will emerge as a talking point or the subject of a shareholder question. Who knows, maybe Musk will make a cameo appearance. We’ll lean on our Bloomberg partners, who are on the ground at the meeting today.
OTHER NOTABLE STORIES
- Enthusiast Gaming responded to its activist investor after markets closed yesterday. The gaming company’s release largely focused on highlighting its recent financial performance and raising questions about the motives and background of its activist (Greywood LLC).
- Nordstrom dodged the cost-induced margin compression that has dogged so many other retailers that’ve reported in the last week or so. The department store operator said in a release after markets closed that it merchandise margins improved thanks to “favourable pricing impacts and lower markdown rates.” It also raised its sales and profit forecasts for this year. Its shares are up almost 10 per cent in pre-market trading.
- Wendy’s shares have similarly been up about 10 per cent in early trading after Nelson Peltz’s Trian Partners (one of the better known U.S. activist investors) put the burger chain on notice that it might attempt to orchestrate a takeover of the company. In response, Wendy’s late yesterday said it will review any proposal submitted by Trian (which has an 11.8 per cent stake in Wendy’s).
- Manulife Financial announced some senior leadership changes last night. They include new CEOs (Naveed Irshad and Damien Green, respectively) for the company’s Canadian and Asian units. The former head of the Asian division (Anil Wadhwani) left Manulife to become CEO of Prudential Plc.
- Premium Brands Holdings announced after markets closed yesterday it’s raising $150 million in a bought-deal offering of convertible debentures maturing in 2029 with an annual interest rate of 5.4 per cent. Proceeds are for reducing debt, and thus freeing up capacity for future takeovers and capital projects. The conversion price for the debentures is $160.25 per common share.
- Notable data: U.S. durable goods orders
- Notable earnings: Bank of Nova Scotia, BMO Financial Group, Nvidia
- 245: Brookfield Asset Management Vice-Chairman Mark Carney participates in Davos panel "Financing Net Zero: Moving from Commitment to Action"
- 800: Pfizer CEO Alberta Bourla feature conversation at Davos
- 920: Restaurant Brands International Chief Operating Officer Joshua Kobza addresses Cowen conference
- 1000: Prime Minister Justin Trudeau makes long-term care announcement in Saskatoon (plus avail)
- 1030: Exxon Mobil annual meeting
- 1130: Ray Dalio participates in Davos panel "An Economic Iron Curtain: Scenarios and Their Implications"
- 1200: Transport Minister Omar Alghabra, J.D. Irving co-CEO James D. Irving announce funding for port of Saint John and New Brunswick railway system
- 1200: Amazon.com annual meeting
- 1230: Canadian Pacific CEO Keith Creel addresses Wolfe Research conference
- 1300: Twitter annual meeting
- 1300: Apple annual meeting
- 1400: U.S. Federal Reserve releases minutes from last meeting