100% possible to get eight rate hikes in next five years: Mortgage Expert
The Bank of Canada delivered the stand-pat decision that Bay Street was expecting. The benchmark rate is unchanged at 0.25 per cent and quantitative easing remains at $3 billion per week. The policy announcement was light on new perspective, with only a brief acknowledgment of housing (“expected to moderate but remain elevated”) and a prediction Canada’s economy will “rebound strongly” as COVID is brought under control. As for inflation, it said inflation is expected to ease up later this year. Things should get more interesting in the months ahead, however, as the central bank faces a potential “major explosion” in growth (as predicted by TD’s Derek Burleton in an interview with us this morning).
BIG OIL BANDS TOGETHER ON EMISSIONS
The biggest names in the oil sands are joining forces in an attempt to clean up the sector. Canadian Natural, Suncor, Imperial Oil, MEG and Cenovus this morning announced the partnership, saying they plan to collaborate to achieve net zero emissions from the oil sands by 2050, with carbon capture playing a crucial role. For years (decades?) we’ve heard the Canadian sector has needed to do a better job of getting the message out on its efforts to clean up its footprint. We’ll explore whether this initiative will finally do the trick.
PEMBINA EYES TRANS MOUNTAIN
These are busy days for Pembina Pipeline. First came the Inter Pipeline deal that elbowed Brookfield out of the way. Then came the Cedar LNG partnership. And now it’s Trans Mountain, with multiple reports that Pembina is teaming up with an Indigenous coalition in an attempt to buy the federally-owned Trans Mountain pipeline, putting it in competition with Project Reconciliation. We’ll chase principals.
CATS AND DOGS COMING TO THE TSX
We know the IPO market has been booming in Canada, but it’s not just tech. Pet Valu filed for an initial public offering yesterday afternoon as it seeks to capitalize on what it’s calling the “COVID-pet generation.” The paperwork shows same-store sales growth has recently accelerated to an 11 per cent annual rate, and the retailer is charting a course to nearly double its store count. Proceeds are earmarked for paying down debt and the retailer (which is profitable) said it intends to pay a dividend. Some cautionary context: Shares of Petco in the U.S. have tumbled almost 20 per cent since their post-IPO peak in January.
OTHER NOTABLE STORIES
- Doug Suttles, who was at the helm for the decision to cut a top oil and gas producer’s ties to Canada, is about to retire. He’s being replaced as chief executive of
EncanaOvintiv as of Aug. 1. His eight-year deal-heavy reign was marked by a high-profile name change and an HQ relocation to the States (and a stock that’s lost 65 per cent of its value). He’s being succeeded by company veteran Brendan McCracken.
- Air Products this morning announced plans to build a $1.3-billion hydrogen facility in Edmonton that’s expected to be operational in 2024.
- Lumber’s recent 30 per cent plunge isn’t dissuading West Fraser Timber from rewarding shareholders. It announced a 25 per cent boost to its dividend late yesterday.
- Amazon.com Inc. announced this morning it’s planning to hire 1,800 corporate and tech workers in Canada this year.
- The TSX’s top COVID-era performer is tapping into investor interest. AcuityAds Holdings (whose shares have surged 1,759 per cent since March 23, 2020) said it’s planning to raise US$50 million, including via an initial public offering in the U.S.
- Notable earnings: Dollarama, Transcontinental, GameStop
- 10:00: Bank of Canada releases interest rate decision
- 11:00: GameStop annual meeting
- 11:30: Alberta Premier Jason Kenney makes announcement alongside Industry Minister François-Philippe Champagne, Natural Resources Minister Seamus O’Regan, and Edmonton Mayor Don Iveson.
- 12:00: Colonial Pipeline CEO Joseph Blount addresses U.S. Homeland Security Committee hearing on defending critical infrastructure