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Noah Zivitz

Managing Editor, BNN Bloomberg

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After more than a decade of talking about it, BHP gave its Jansen potash project in Saskatchewan the green light today. The decision is being framed as a play on “key global mega-trends” and involves a $7.5-billion capital investment ahead of first production in 2027. It comes the same day that BHP announced it’ll combine its oil and gas business with Woodside Petroleum, which tells us all we need to know about the direction that CEO Mike Henry (a Canadian) is taking the mining giant – which also tossed investors a US$2 per share dividend today.

The back story on Jansen is as fascinating as the sanctioning decision, after the project proposal became a key talking point in BHP’s hostile attempt to buy Potash Corporation of Saskatchewan in 2010. Today we’ll focus on the long-term need for Jansen and what the green light means for incumbent potash giants (like Nutrien). Have to point out that BHP this morning also booked a US$2.1-billion impairment on the carrying value of its potash assets.  

MARKET WATCH

It looks like U.S. stocks will be giving up some of the gains that lifted the S&P 500 to a new milestone yesterday when the index doubled from the pandemic-era low that was set on March 23, 2020. If you bought the index back then, you’re sitting pretty – but not in comparison to its top gainers. Like Moderna, which leads the way with a surge of 1,307.08 per cent over the same timeframe.

KEY DAY IN CN-KCS TAKEOVER SAGA

We’re likely going to find out today if Kansas City Southern will stick to its scheduled shareholder meeting on Thursday for a vote on the railway’s proposed sale to CN Rail. KCS previously warned that it’ll postpone the meeting if the U.S. Surface Transportation Board doesn’t decide on CN’s request for a voting trust by today at 7 p.m. No doubt that Canadian Pacific Railway – which is trying to bust up that friendly arrangement – is eagerly waiting to see how things play out.

OTHER NOTABLE STORIES

  • Home Depot is getting punished by investors this morning for reporting a sharp slowdown in same-stores sales growth as year-over-year comparisons become increasingly difficult for the retailer that benefitted massively from a home-reno boom. Sales at stores that were open for at least a year in the second quarter rose just 4.5 per cent, compared to 31 per cent in the first quarter. Analysts were expecting 5.6 per cent. Shares have been down almost five per cent in pre-market trading.
  • Walmart’s growth also slowed in the second quarter, but not as dramatically. Same-store sales in the U.S. rose 5.5 per cent (ex-fuel), compared to a 6.0 per cent gain in the prior quarter. The retailer also raised some of its full-year forecasts.
  • Back to Jansen for one moment. Westshore Terminals confirmed this morning that it will proceed with building the necessary port infrastructure to handle shipments from the potash mine. Westshore shares surged 28 per cent on July 23 with it announced a tentative agreement to service Jansen.
  • We’ll see how shares of cemetery operator Park Lawn Corporation fare once trading resumes. The stock was halted yesterday afternoon ahead of news that the company is raising $135 million in a bought deal share.
  • Yesterday was the deadline for institutional investors to report their holdings to the U.S. Securities and Exchange Commission. As always, lots of interest in Warren Buffett’s Berkshire Hathaway, which revealed smaller stakes General Motors, Chevron and pharma names including AbbVie and Bristol-Myers Squibb.

NOTABLE RELEASES/EVENTS

  • Notable data: Canadian housing starts and international securities transactions; U.S. retail sales
  • Notable earnings: Walmart, Home Depot
  • 10:00: Liberal Party Leader Justin Trudeau makes announcement in Markham, Ont. (plus avail)
  • 12:00: NDP Leader Jagmeet Singh makes announcement in Coquitlam, B.C. (plus avail)
  • 13:00: Conservative Party Leader Erin O’Toole makes announcement in Toronto (plus avail)
  • 13:30: U.S. Federal Reserve Chair Jerome Powell hosts town hall with educators and students
  • 14:30: Green Party Leader Annamie Paul makes announcement in Toronto
  • 19:00: Kansas City Southern’s deadline for U.S. Surface Transportation Board to decide on CN’s voting trust in time for shareholder vote this week