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Noah Zivitz

Managing Editor, BNN Bloomberg

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Today’s the day that so many business owners in Ontario have been waiting for. Restaurants can resume indoor dining. Movie theatres can welcome back patrons. Gyms can reopen their doors. Concert venues can bring back bands and their fans. It’s still not a full reopening, but it’s a giant step forward in the country’s most populous province. Throughout the day we’ll be checking in with some of those business owners to find out how they’ve been coping and learn more about the opportunities and challenges ahead. And we’re also getting some new reminders of the risks ahead: Singapore just announced a clampdown on certain venues after an outbreak tied to a karaoke bar, and L.A. County is mandating indoor masking after a spike in COVID cases.

TRUDEAU SETS BORDER TIMELINES

And here’s the news Canada’s hospitality and travel industry has been waiting for. According to a readout from Prime Minister Justin Trudeau’s meeting with premiers last night, he said fully vaccinated Americans could be allowed back into Canada in a month, and that if vaccination rates remain on their “current positive path”, the feds could allow fully vaccinated travelers from all countries to enter Canada by early September. We’re chasing reaction from some of the sectors that have the most at stake.

CANADA’S TWO-TIERED HOUSING LANDSCAPE

We’ve got another exclusive poll with RATESDOTCA today, this time focused on housing market fundamentals. What it reveals is a disturbing proportion of new homeowners who may have bit off more than they can chew. Watch for details on this at BNNBloomberg.ca.                                                                                           

RBC DEBT RATING CUT

…But rather than being a specific call on Canada’s largest bank, Fitch was forced to take RBC’s rating down one notch to AA- as a result of the ratings agency’s decision to lower its view of the broader operating environment to the same level due to high government and household debt levels. We’ll go deep into the rationale with a Fitch analyst in Bloomberg Markets.

LOONIE NEAR THREE-MONTH LOW

How quickly the Canadian dollar has fallen out of favour. It’s closed below 80 cents U.S. in three straight sessions and this morning is trading near its lowest level since late April. The most recent move lower coincides with West Texas Intermediate crude’s pullback amid the OPEC+ impasse. Though surely other forces are at play.

OTHER NOTABLE STORIES AND STOCKS TO WATCH

  • Our Bloomberg partners are reporting U.S. Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell are convening a meeting with American regulators today to discuss risks posed by hot housing markets and to ensure the economy isn’t vulnerable to another episode like the one that precipitated the financial crisis.
  • Topaz Energy announced late yesterday that it’s paying $145 million to pick up royalty rights on some Montney assets owned by Tourmaline Oil. Topaz said the deal will boost its per share EBITDA and free cash flow eight per cent.
  • SIR Royalty Income Fund (which is built on restaurant brands including Jack Astor’s and Reds) said it will resume distribution payments, at $0.07/unit, at the end of this month after halting payments in early 2020 as a result of the pandemic. This announcement comes just a few days after another major restaurant royalty fund, The Keg, announced a doubling of its distribution.
  • Moderna shares have been up almost 10 per cent in pre-market trading after S&P Dow Jones Indices announced the biotech that rose to prominence during the pandemic is being added to the S&P 500 next Wednesday.
  • Methanex is on our radar after announcing it’s selling a 40 per cent stake in its shipping subsidiary to Mitsui O.S.K. Lines for US$145 million.
  • The Wall Street Journal is reporting Intel is exploring the possibility of acquiring GlobalFoundaries for approximately US$30 billion in a move that would align with the strategy that was mapped out by Intel’s new chief executive earlier this year.
  • Methanex is on our radar after announcing it’s selling a 40 per cent stake in its shipping subsidiary to Mitsui O.S.K. Lines for US$145 million. And new this morning, the company said it will more than triple its quarterly dividend to $0.125 per share and plans to resume construction of its Geismar 3 project. 

NOTABLE RELEASES/EVENTS

  • Notable data: Canadian housing starts, wholesale trade, and international securities transactions
  • Notable earnings: Kansas City Southern
  • 9:00: Deputy Prime Minister and Finance Minister Chrystia Freeland makes infrastructure announcement in Scarborough, Ont.
  • 13:00: Employment Minister Carla Qualtrough makes clean energy announcement in British Columbia alongside Premier John Horgan and Shell Canada President Susannah Pierce