Noah Zivitz

Managing Editor, BNN Bloomberg

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Inflation expectations are looking even shakier this morning. The Bank of Canada’s new Business Outlook Survey reveals growing concern about the outlook for prices over the next couple of years: almost one-third of respondents (31.7 per cent) said they think inflation will remain substantially higher than two per cent for two or three years. The survey also shows more companies are reporting labour shortages; no surprise then to see a surge in wage-hike expectations. A separate survey of consumers shows average Canadians are expecting inflation will be close to seven per cent a year from now. None of this is good for the Bank of Canada, which can’t afford to let inflation expectations become unmoored.

MARKET WATCH

…and there won’t be as much to watch as usual, with U.S. markets closed for Independence Day. The major U.S. indices opened the second half of the year with some modest gains on Friday when we were off for Canada Day. No doubt the aforementioned Davids will share their views on what to expect for the balance of the year with the books closed on a first half that saw barely one-quarter of the S&P/TSX Composite Index’s members notch gains.

IN CONVERSATION WITH WHITECAP’S CEO

We often hear these days (forcefully so, in the case of Eric Nuttall) that returning capital to shareholders needs to be prioritized over growth in the energy sector. Whitecap Resources, however, is trying to achieve both. It’s still fresh off last week’s news about paying $1.9 billion to acquire XTO Energy Canada from Imperial Oil and Exxon, while immediately demonstrating the payoff from the deal by hiking its dividend, and laying the groundwork for sharing even more of its wealth over the coming years. CEO Grant Fagerheim joins us at 1:30 p.m. to flesh out the rationale for the deal and perhaps shed some light on what he’s been hearing from institutional investors.

KEEPING AN EYE ON SHAW-ROGERS SAGA

We’ll be on our toes in the days and weeks ahead as Shaw Communications, Rogers Communications, and the Competition Bureau head into mediation today as the two big telcos aim to appease a regulator that has dug in its heels. If you missed it (and you’d be forgiven if you did, seeing as how this was released at 5 p.m. Thursday, heading into the long weekend): Shaw Communications CEO Brad Shaw said his company “remains deeply committed” to the $20-billion takeover by Rogers. However, Shaw (the company, not Brad), acknowledged in its quarterly release that there are risks to getting it all done by the July 31 target.

CRYPTO SUSPENSIONS

Two tough situations, both resulting in users essentially being frozen out. Vauld, a Singapore-based lender whose website pledges to “keep [users’] money safe” and warns that “governments and banks can fall, or change their monetary policies, at any time – and your currency today can literally have no value tomorrow…”, announced yesterday that it suspended withdrawals, trading, and deposits as it works with advisors to navigate a range of shockwaves. Similarly, TSX-listed Voyager Digital announced a trading suspension Friday as it copes with the fallout from its exposure to Three Arrows Capital. It also said it retained Moelis & Co. to help explore strategic alternatives. 

OTHER NOTABLE STORIES

• The European Central Bank is putting more of a premium on climate awareness; saying today it’s planning to “tilt” its corporate bond holdings toward issuers that demonstrate “better climate performance.”
• Amazon.com Founder Jeff Bezos blasted U.S President Joe Biden on Twitter (again) over the weekend, accusing him of either “misdirection or a deep misunderstanding of basic market dynamics” after Biden hectored gas station operators to lower fuel prices.
• Calgary-based Cathedral Energy Services announced it’s paying US$100 million in cash and stock to expand in the U.S. by acquiring Texas-focused Altitude Energy Partners.
• Boralex is cementing its presence in the United Kingdom, announcing this morning it has acquired assets currently held by Infinergy, which has been a joint-venture partner with Boralex since 2017. Those assets include 338 megawatts of wind and solar power and storage capacity.
• Shares in Cowen Inc. spiked in extended trading late Friday after Bloomberg News reported that Toronto-Dominion Bank is “studying a possible” acquisition of the U.S. brokerage. Bloomberg indicated it couldn’t immediately reach TD and Cowen to comment on its reporting. Bloomberg pointed out in its reporting that no final decision has been made and TD may ultimately choose not to pursue a transaction.

NOTABLE RELEASES/EVENTS

• 1030: Bank of Canada releases Business Outlook Survey and Canadian Survey of Consumer Expectations
• -~1400: Calgary Real Estate Board releases June sales data