First Look With Surveillance: New Variant, Black Friday
The new COVID-19 variant is shaking global markets. Major European indices have been down more than three per cent, futures are pointing to a sharp drop at the start of trading in this shortened session in New York, West Texas Intermediate crude was down more than six per cent at one point, airline and cruise stocks are sliding, the U.S. 10-year Treasury yield is falling, and Bitcoin has slid seven per cent into bear market territory. All of this as South African health officials sound the alarm on the B.1.1.529 variant (and plead with billionaires like Warren Buffett and Jeff Bezos to help with the giant financial burden), which will be the subject of a World Health Organization meeting today. We’ll have plenty of insight on the market reaction, and the threat to a global economic recovery, throughout the day.
29% OF MORTGAGE HOLDERS UNPREPARED FOR HIGHER RATES
That’s the key takeaway from the latest Leger survey done for BNN Bloomberg and RATESDOTCA. Those nearly one-in-three respondents to the survey (who either have or are planning to get a mortgage) said they either don’t know or aren’t familiar with the impact of rate increases on monthly mortgage payments. Which is alarming ahead of the rate-hiking cycle that’s expected to start early next year. More details at BNNBloomberg.ca and we’ll dig into this with RATESDOTCA Managing Editor John Shmuel in The Close.
AWAITING CRUCIAL PIPELINE DECISION
The Canada Energy Regulator will announce its decision today on Enbridge’s application to change its tolling system for the Canadian Mainline pipeline system, which is this country’s largest conduit of crude oil. In short, Enbridge wants customers to sign up for long-term contracts that would account for 90 per cent of the Mainline capacity. That plan sparked an uproar from some industry heavyweights, including Canadian Natural Resources which in January 2020 blasted the proposal as “an abuse of market power by Enbridge and unjustly discriminatory, and not in the public interest.” The CER’s ruling is due to land at 4:30 p.m. We’ll be ready.
B.C. STORM RECOVERY
We’ll be watching for any updates on the setbacks that surfaced yesterday. Canadian National Railway originally aimed to resume Kamloops-Vancouver service overnight into Thursday, but we learned yesterday afternoon that didn’t happen due to bad weather. And late yesterday afternoon, Trans Mountain abandoned its previously stated timeline for resuming the pipeline’s service by the end of this week.
ROGERS, SHAW RESPOND TO CRITICS
The Canadian Radio-television and Telecommunications’ hearing into Rogers’ planned $20-billion takeover of Shaw is expected to conclude today with the two principals getting an opportunity to respond after days of presentations by a wide range of industry stakeholders. Over the last couple of days, we’ve heard Rogers’ competitors caution the CRTC about allowing the deal to proceed, and criticize Rogers for what it has and hasn’t disclosed. We’ll monitor developments.
BANK EARNINGS AHEAD
Nevermind the quarterly performance, let’s be honest – this round from Canada’s Big Six is all about the expectation for a “tsunami” of dividends. That’s the way at least on Bay Street analyst is framing what’s shaping up to be a flurry of shareholder-friendly news as the banks take advantage of being freed from the pandemic-era prohibition on dividend hikes and share buybacks. As usual, Paul has a preview at BNNBloomberg.ca
OTHER NOTABLE STORIES
- It’s Black Friday. So we’ll of course watch it as a barometer of consumer confidence and supply chain resilience.
- Shares in Didi Global are coming under pressure on the New York Stock Exchange this morning as Bloomberg News reports Beijing is asserting its power by pushing the ride-hailing company to delist in the States.
- Canadian Pacific Railway and Kansas City Southern scored a regulatory win today as they announced Mexico officials have approved the planned takeover. The big hurdle is still ahead, with the U.S. Surface Transportation Board set to scrutinize the tie-up in a process that isn’t expected to wrap until the fourth quarter of next year.
- 8:45: Prime Minister Justin Trudeau meets with Montreal Mayor Valérie Plante in Montreal
- 11:00: CRTC’s Rogers-Shaw hearing resumes
- 13:00: Deputy Prime Minister and Finance Minister Chrystia Freeland meets with private sector economists
- 16:30: Canada Energy Regulator releases decision in Enbridge's Canadian Mainline contracting application
- 19:30: Prime Minister Justin Trudeau meets with British Columbia Premier John Horgan in Victoria (plus avail at 8:30 p.m.)