Aug 17, 2018
The Daily Chase: Canadian inflation hits 3% in July; Air Canada losing a top exec to Air France
By Noah Zivitz
Canada's inflation rate has hit the highest level since September 2011. Statistics Canda's Consumer Price Index spiked three per cent year-over-year in July, with rising price pressure in every single categor tracked by StatsCan. Pain at the pump was prominent, with gasoline prices surging 25 per cent from the same time last year. Hot inflation helped drive up the dollar this morning and got Bay Street thinking about when rates will rise in this country.
AIR CANADA LOSES A TOP EXEC
Air Canada is sending off its second in command with a 137-word statement that lacks detail on the airline’s plan to fill the void left behind. Ben Smith proved weeks of speculation to be true yesterday by jumping ship (err, plane) to Air France KLM, where he’ll become CEO by Sept. 30. His last day at Canada’s largest airline is Aug. 31, meaning it’s just two weeks’ notice. So who steps in to build on Smith’s operational achievements at Air Canada at a time when the company is facing competition from WestJet on international routes, new challenges from ultra-low-cost carriers, and shall we say a hot potato with Aeroplan? We’ll consider all of that.
TESLA VS ONTARIO
We’ll aim to bring in informed voices on what happens next as a result of Tesla’s legal faceoff with Ontario. The electric vehicle maker claims Doug Ford’s government “deliberately and arbitrarily” structured the wind down of its rebate program for green vehicles to exclude Tesla because its cars aren’t sold through franchised dealerships. Would like to hear more about the competitive dynamics this creates, the economics of going green, and the outlook for the electric vehicle market.
A DIFFERENT SIDE OF MUSK
The New York Times’ interview with Elon Musk is a must-read for unique insight on the “excruciating” distress he’s endured in what he calls “the most difficult and painful” year of his career. It also takes us behind the scenes of his now infamous tweet, which it turns out was typed while en route to an airport.
TRUMP EYES BREAKING QUARTERLY CYCLE
We've heard more and more business leaders decry the short-termism of quarterly reporting cycles. Now the U.S. president is chiming in, saying in a tweet today he's asked the Securities and Exchange Commission to study a switch to semi-annual reporting. We're chasing reaction.
NAFTA OUTLOOK
Bunch of interviews to watch on BNN Bloomberg today for insight on how/if NAFTA can be salvaged amid the Trump administration’s strategy of freezing out Canada. Ex-ambassador Derek Burney joins The Open, then Bloomberg Markets catches up with James Blanchard. And the broader trade narrative will factor into our conversation with ex-TransCanada CEO Hal Kvisle on The Close. You won’t want to miss his thoughts on what could be Trump’s next tariff target.
OTHER NOTABLE STORIES
-The National Energy Board late yesterday announced a go-ahead for construction of certain portions of the Trans Mountain expansion project.
-Nordstrom shares are spiking in pre-market trading (last seen up 9 per cent+) after the retailer raised its full-year profit and same-store sales forecasts on the back of a slew of second-quarter beats. Much like with Walmart, ecommerce is a key theme with Nordstrom’s online sales surging 23 per cent in Q2.
-Nvidia’s revenue surged 40 per cent year-over-year in the second quarter, but that kind of growth isn’t enough to satisfy investors. NVDA is falling in pre-market trading. CFO Colette Kress warned on an earnings call Nvidia now expects a “negligible contribution going forward” from crypto-specific revenue.
NOTABLE RELEASES/EVENTS
-Notable earnings: Deere & Co.
-Notable data: Canadian CPI, Canadian international securities transactions, University of Michigan consumer sentiment index
-1:00 p.m. ET: Natural Resources Minister Amarjeet Sohi holds avail in Edmonton (after announcement re. “sustainable aviation sector”)
Every morning BNN Bloomberg's Managing Editor Noah Zivitz writes a ‘chase note’ to BNN Bloomberg's editorial staff listing the stories and events that will be in the spotlight that day. Have it delivered to your inbox before the trading day begins by heading to www.bnnbloomberg.ca/subscribe.
