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Noah Zivitz

Managing Editor, BNN Bloomberg

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Bank of Montreal opened earnings season this morning pretty much exactly as we anticipated, with remarkable headline year-over-year growth thanks to a sharp drop in credit-loss provisions that powered the profit beat. Indeed, the bank set aside just $60 million in total provisions in the latest quarter. Digging under the surface, the story becomes much messier. Take the U.S. banking unit, for example, where profit surged 76 per cent year-over-year, but fell sequentially. We’ll sift through the details, gather reaction, and size up the outlook for deploying robust war chests that are being built up for whenever Canada’s banking regulator lifts its moratorium on share buybacks and dividend hikes (BMO’s key capital ratio jumped to 13 per cent as of April 30).  v

TSX HITS FRESH RECORDS

The S&P/TSX Composite Index climbed to fresh intraday and closing records yesterday thanks to heavyweights like Shopify, Canadian National Railway and Brookfield Asset Management. It was the fifth time this month that the index has closed at an all-time high and leaves it sitting just a couple hundred points away from 20,000.

FINALLY – AMAZON CLINCHES MGM DEAL

After more than a week of speculation, Amazon.com Inc. today announced it reached an agreement to buy the Metro Goldwyn Mayer movie studio for US$8.45 billion. As TD Ameritrade Chief Market Strategist J.J. Kinahan told us in instant analysis, this is part of Amazon’s strategy to be “in your life everywhere you turn.” Which begs the question of how regulators and lawmakers will respond, particularly after D.C.’s attorney general launched an antitrust battle with Amazon yesterday.

SUNCOR INVESTOR DAY

The giant of the oil sands will attempt to win back some favour among investors today who've seen Suncor underperform Canadian Natural Resources and the broader energy group over the last couple years. We already know that paying down debt and positioning Suncor for a greener future are top of mind for CEO Mark Little, but he also hinted the last time we spoke with him that there could be some news on the dividend in the presentation to investors today. We'll keep tabs on it. For the record, of 24 analysts tracked by Bloomberg, 18 have a “Buy” recommendation on Suncor, and the other six rate it as a “Hold.”

OTHER NOTABLE STORIES

  • CN Rail is attempting to address competition concerns today tied to its planned takeover of Kansas City Southern, saying it intends to divest a 70-million line stretching from New Orleans to Baton Rouge. CN said that’s the only overlap in the two companies’ rail maps.
  • Bell said today it’s on track to have its 5G network cover 70% of Canada’s population by the end of this year after announcing coverage has been expanded to 23 more cities and towns. Reminder that BNN Bloomberg is owned by Bell Media, which shares BCE as a parent company with Bell.
  • Transat A.T. announced today that its chief executive officer, Jean-Marc Eustache, is retiring as of tomorrow. He’ll be succeeded by Chief Operating Officer Annick Guérard.
  • Killam Apartment REIT announced a $190.5-million acquisition of properties in Kitchener and Waterloo, Ont. late yesterday. The expansion is being funded in part by a $95-million bought-deal unit sale priced at $18.50 apiece (units closed at $19.02 on the TSX yesterday).
  • Nordstrom is on our radar after the department store chain reported a first-quarter loss that was wider than expected, while sales fell 19 per cent compared to the same period in 2019.

NOTABLE RELEASES/EVENTS

  • Notable earnings: BMO, Nvidia
  • 8 a.m. ET: CN Rail CEO Jean-Jacques Ruest and Kansas City Southern CEO Pat Ottensmeyer address Wolfe Research conference
  • 9:15 a.m.: Ford Motor Co. holds capital markets day
  • 9:45 a.m.: CP Rail CEO Keith Creel addresses Wolfe Research conference
  • 10 a.m.: Suncor Energy holds investor day
  • 10 a.m.: CEOs of JPMorgan Chase & Co., Goldman Sachs, Bank of America, Wells Fargo, Citigroup, and Morgan Stanley address U.S. Senate Banking hearing on oversight of Wall Street firms
  • 10:30 a.m.: ExxonMobil holds annual meeting
  • 1 p.m.: Bank of Canada Deputy Governor Timothy Lane participates in Canadian Chamber of Commerce panel "The Future of Digital Currencies in Canada"
  • 2 p.m. (approx.): Auditor General Karen Hogan delivers two COVID reports (on securing PPEs and support to Indigenous communities)
  • TD Securities hosts telecom conference (Rogers CEO Joe Natale at 9 a.m., BCE CEO Mirko Bibic at 9:50, Telus CFO Doug French at 10:40)