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Noah Zivitz

Managing Editor, BNN Bloomberg

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Bank of Montreal and Bank of Nova Scotia opened earnings season today with two big profit beats. A common denominator is substantially improved credit quality, as both banks set aside far less cash for loans that could go bad. Divergence, however, is clear outside of Canada as BMO benefitted from substantial profit growth in its U.S. operations, while Scotia was held back by a sharp drop in its international operations. Paul Bagnell is going through all the details for us, and we’re looking forward to having Scotia CEO Brian Porter join Jon Erlichman on The Open at 9:40 a.m.

And it’s not just the Big Six on our radar. Alternative lender Equitable Group last night reported a 24 per cent surge in adjusted fourth-quarter profit, helped in part by a modest release of funds from its loan-loss reserves. HSBC Bank Canada also disclosed a small ($1 million) release from its reserves, albeit while reporting a 10 per cent drop in operating profit.

POWELL IN THE SPOTLIGHT

As inflation fears ripple through markets, U.S. Federal Reserve Chair Jerome Powell will be in position to quell investors’ nerves as he begins two days of congressional testimony this morning. We’ll track how it plays out on a day when we’re seeing tech stocks come under pressure again as the 10-year U.S. Treasury yield inches higher. We’ve also got Bitcoin (down as much as 18 per cent) and copper (extending gains) on our radar.

TRUDEAU-BIDEN MEETING

Prime Minister Justin Trudeau and U.S. President Joe Biden get down to the business of repairing relations between the two countries today in a virtual bilateral meeting that will also be expanded to top cabinet officials. Already this morning, the White Houseunderscored its desire to mend fences with the release of what it’s calling “The U.S.-Canada Partnership Roadmap”, which outline a plan to collaborate on fighting COVID-19, "building back better," addressing racism boosting security efforts, and building global alliances. No mention of the “bilateral energy relationship” that the Prime Minister’s Office touted as a talking point when the meeting was first announced.  

OTHER NOTABLE STORIES

  • Shopify is tapping market demand, announcing it will offer 1.18 million subordinate shares, with an over-allotment option to boost the sale 15 per cent. Pricing was set at US$1,315 per share for a gross haul of US$1.55 billion. Shopify says proceeds will go toward “strengthening its balance sheet, providing flexibility to fund its growth strategies.” 
  • Inter Pipeline last night said an independent committee of its directors will now formally review the unsolicited takeover offer that’s been launched by Brookfield Infrastructure Partners. The release notes the company’s board “remains open to all opportunities that may create shareholder value.”
  • GFL Environmental CEO Patrick Dovigi is talking up the potential for more M&A, saying in a release his company is well positioned for “tuck-ins and potentially larger-sized opportunities.” GFL also reported a 38 per cent surge in fourth-quarter revenue and a larger net loss compared to a year earlier.
  • Home Depot today announced a 10 per cent boost to its quarterly dividend (to US$1.65 per share) while reporting a 24.5 per cent surge in fourth-quarter same-store sales.
  • As anticipated, Score Media and Gaming filed paperwork for an initial public offering of its shares in the United States late yesterday. Proceeds are being earmarked for growing theScore Bet gambling app.
  • Wells Fargo today announced the sale of its asset management division to a pair of private equity firms for US$2.1 billion. It had previously been reported that CI Financial was among the bidders for the business.

NOTABLE RELEASES/EVENTS

  • Notable earnings: Bank of Montreal, Bank of Nova Scotia, B2Gold, Dream Unlimited, Trican Well Service, Secure Energy Services, Thomson Reuters, Home Depot, Macy's, Square
  • 10 a.m. ET: Federal Reserve Chair Jerome Powell addresses U.S. Senate Banking Committee
  • 10:30 a.m. ET: Pfizer, Novavax, Moderna, Johnson & Johnson, AstraZeneca officials address U.S. House Energy & Commerce Committee hearing on COVID-19 vaccine availability
  • 12:30 p.m. ET: Bank of Canada Governor Tiff Macklem addresses Edmonton and Calgary chambers of commerce
  • 4 p.m. ET: U.S. President Joe Biden and Prime Minister Justin Trudeau hold virtual bilateral meeting
  • 4:50 p.m. ET: Trudeau, Biden begin expanded meeting with cabinet members
  • 5:45 p.m. ET: Trudeau, Biden deliver joint statement