May 22, 2019
The Daily Chase: CIBC opens bank earnings with flat profit; Barrick proposes Acacia buyout
By Noah Zivitz
The Big Three: CIBC profit barely misses; Horizons debuts new pot ETFs; U.S. retailers hurt by tariffs
VIDEO SIGN OUT
CIBC has opened earnings season with a flat profit that was held back by pressure in core Canadian banking. Loan loss provisions rose in that unit, and the bank’s mortgage book shrank to $201 billion. Performance was stronger in the other divisions, including double-digit gains in U.S. banking and capital markets. We’ll address how this will go over with the skeptics.
CHINA-U.S. LATEST
A lot of threads to pull on. Perhaps most interesting: We’re seeing more analysts ponder the possibility of Apple falling victim to retaliatory measures in China. Bloomberg notes Goldman Sachs is estimating Apple’s earnings could plunge 29 per cent in the event of an outright ban. Production restrictions and unofficial boycotts are also being weighed as risks. Meanwhile, there are reports the U.S. is considering choking off Chinese surveillance companies in a similar fashion as Huawei.
BARRICK SEEKS ACACIA BUYOUT
The giant gold miner wants to take matters into its own hands in Tanzania. Barrick Gold announced overnight it’s offering to acquire full control of Acacia in a US$285-million stock swap. Barrick says it has designed a framework to resolve a long-standing dispute in Tanzania, but the government is refusing to deal directly with Acacia. Thus the buyout offer – which comes at a discount. And so Acacia shares have been down as much as 8.4 per cent in London.
ON LOCATION AT COLLISION
Our team is back for another day of interviews at the big tech conference in Toronto. We’re looking forward to conversations with the likes of Twitter co-founder Ev Williams, ex-Cisco CEO John Chambers, McAfee CEO Chris Young, and Sidewalk Labs CEO Dan Doctoroff.
OTHER NOTABLE STORIES
-Horizons ETF Management is betting the standard volatility of pot stocks isn’t enough for some investors: it’s launching leveraged and inverse cannabis exchange traded funds. We’ll address what you need to know before investing in these new products.
-A whole lot of retail movers today: Lowe’s is down almost 10 per cent in pre-market trading after the home reno retailer slashed its full-year profit forecast. Nordstrom is also sliding after reporting lower first-quarter profit and sales and a weaker outlook as President Erik Nordstrom is owning up to “executional misses”. Target is up eight per cent after profit and same-store sales beat estimates.
-BHP CFO Peter Beaven touted the company’s Jansen potash project today, saying it “makes sense on a strategic level”, while acknowledging there’s excess industry supply that likely won’t be worked through until the middle of next decade.
-Shares of Avon Products are surging in pre-market trading amid reports the cosmetics company is close to announcing a sale to Natura Cosmeticos.
-Canopy Growth, meanwhile, announced it’s buying skincare product-maker This Works for $73.8 million.
-Qualcomm shares are sliding in pre-market trading on a U.S. antitrust ruling.
-From yesterday afternoon: Bloomberg is reporting Hudbay Minerals is gearing up to shop a 30 per cent stake in its Rosemont copper mine.
NOTABLE RELEASES/EVENTS
-Notable earnings: CIBC, Lowe's, Target
-Notable data: Canadian retail sales
-8:30 a.m. ET: U.S. Treasury Secretary Steven Mnuchin addresses House Financial Services Committee
-10:00 a.m. ET: CMHC releases report on mortgage and consumer credit trends
-10:00 a.m. ET: Ontario Financial Accountability Officer releases economic and budget outlook report
-11:15 a.m. ET: Organized Crime Reduction Minister Bill Blair makes announcement in Calgary regarding cannabis research and public awareness
-12:00 p.m. ET: Assembly of First Nations Chief Perry Bellegarde delivers speech in Toronto
-12:00 p.m. ET: Amazon.com holds annual meeting in Seattle
-12:30 p.m. ET: Prime Minister Justin Trudeau makes announcement in Vancouver on future of Canadian Coast Guard
-2:00 p.m. ET: U.S. Federal Reserve releases minutes from last meeting
-2:15 p.m. ET: Foreign Affairs Minister Chrystia Freeland visits Evraz plant in Regina (plus avail)
-3:30 p.m. ET: Ontario Premier Doug Ford meets with New Brunswick Premier Blaine Higgs in Toronto
-5:00 p.m. ET: Alberta lieutenant governor delivers throne speech
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.
