Noah Zivitz

Managing Editor, BNN Bloomberg

Archive

Brookfield Infrastructure Partners is facing a higher hurdle in its hostile attempt to wrestle Inter Pipeline away from Pembina Pipeline. The Alberta Securities Commission late yesterday hiked the tender requirement for Brookfield’s offer to 55 per cent of Inter Pipe shares that it doesn’t currently own from the original threshold of a simple majority. The regulator also admonished Brookfield’s “abusive” use of total return swaps to enhance its economic interest in Inter Pipe. In a release this morning, Brookfield said it will adjust its offer to comply with the regulator’s decision. It also extended the offer to Aug. 6 and said it is considering “further enhancements”.

LUMBER CRASH

Credit to our Bloomberg partners for pointing out that all of this year’s gains that propelled lumber above US$1,700 per thousand board feet in May were wiped out as of the close of trading yesterday in Chicago after four straight losing sessions. Is this the ultimately story of transitory inflation? Or a classic case of high prices being the cure for high prices? On the topic of inflation, the U.S. consumer price index nearly doubled expectations in June with a rise of 0.9 per cent. We’ll follow up on the consequences for consumers and investors. And maybe it’s time to check back with this memorable lumber yard owner.

EARNINGS SEASON UNDERWAY

JPMorgan Chase & Co. set the bar this morning, with second-quarter net income that surged 155 per cent year-over-year. That's despite a drop in revenue. How do we square that circle? Check out the US$2.3-billion release of funds that had been set aside for credit losses. Meanwhile, JPM's core banking unit saw deposits surge 25 per cent year-over-year while loans slipped three per cent. Which tells us plenty about what's happening on Main Street in the U.S. economy. As for the Wall Street operations: investment banking fees surged to a record high of US$3.6 billion and the closely watched Fixed Income, Currency and Commodities (FICC) revenue sank 44 per cent from a year earlier. Though it was still in line with estimates. Add it all up and the company’s shares are slipping a bit in pre-market trading. 

CANADIANS DIVIDED OVER ENERGY POLICY

No surprise there, but the magnitude of the divide is remarkable -- and makes for potentially messy campaign fodder. According to a new Angus Reid Institute poll, more than half of Canadians say investing in alternative energy sources should be Canada's top priority for addressing supply, and when asked what the key aim of energy policy should be, the most popular option (31 per cent) was energy independence. But those are the headlines; the subtext is far more complicated. Shachi Kurl from ARI joins Bloomberg Markets today shortly after 1 p.m.

DIVIDEND ENVY

U.K. banks today have been freed from the “extraordinary guardrails” on dividend payment that were imposed last year. In an announcement this morning, the Prudential Regulatory Authority said those constraints, which tied dividends to financial results, “are no longer necessary” as vaccinations curb COVID-19. It comes just a few weeks after the U.S. Federal Reserve similarly unshackled American banks. And yet Canadian lenders continue to be barred from raising their dividends and buying back shares.

OTHER NOTABLE STORIES

• The International Energy Agency today warned that global oil markets “will tighten significantly” so long as OPEC+ remains at loggerheads over production. The watchdog also predicted that stockpiles could fall in the third quarter of this year by the most in at least a decade.
• Royal Dutch Shell this morning announced a proposal for a carbon capture and storage project – with a lifetime capacity to store 300 million tonnes of carbon dioxide -- at its Scotford complex in Alberta. The proposal is subject to a final investment decision in 2023.
• The Keg Royalties Income Fund will be on our radar today after it announced a doubling of its monthly distribution to seven cents per unit amid the loosening of COVID-19 public health restrictions.
• Great-West Lifeco announced this morning that its Irish Life subsidiary is buying Ark Life Assurance Company for 230-million euros. 
• Organigram shares are rising in New York pre-market trading after the New Brunswick-based pot producer reported a 39 per cent sequential jump in revenue and said sales are trending higher in the current quarter. Even so, the company’s adjusted loss widened to $10.2 million in the fiscal third quarter. 

NOTABLE RELEASES/EVENTS

• Notable data: U.S. consumer price index
• Notable earnings: Aritzia, Score Media and Gaming, Organigram, JP Morgan Chase & Co., Goldman Sachs, PepsiCo
• 9:20: Prime Minister Justin Trudeau virtually joins Nova Scotia premier Iain Rankin for child care announcement (plus avail)
• 11:00: Industry Minister François-Philippe Champagne announces support for mining sector
• Brookfield Infrastructure's proposal to acquire Inter Pipeline scheduled to expire