First Look With Surveillance: Vaccine Backed, Deutsche Bank Optimism
Edward Rogers will have his day in court next Monday, when the B.C. Supreme Court will hear the case pitting him against his family and incumbent directors in a power struggle that’s led to two boards of directors claiming to be overseeing Canada’s largest wireless operator. Court documents released yesterday included bombshell revelations (with supporting paperwork) that a plan was hatched to oust Rogers Communications Chief Executive Joe Natale from his role, only for that plan to collapse after Loretta Rogers and Martha Rogers reconsidered their positions. The deeper you go into the court documents and exhibits, the more incredible the story becomes. All of which raises significant questions about investor confidence, regardless of how this dispute plays out next week. Important to point out that none of the claims have been tested or proven in court -- and that Loretta Rogers admonished her son’s framing of the story and John MacDonald (who Rogers Communications maintains is its rightful chair) similarly blasted Mr. Rogers’ portrayal as “utterly false.”
BANK OF CANADA DECISION DAY
It’s not so much the decision as the tone about inflation that will be the story today. With Canada’s consumer price index running at the hottest level since early 2003, and the country having recently recouped all jobs lost during the pandemic, will the central bank change its tune? Or will it continue to signal that rates won’t rise until the second half of next year? One decision we’re watching for is a further tapering of emergency stimulus by way of reducing the quantitative easing program that’s currently running at a rate of $2 billion per week. Exciting news for us: Greg Bonnell is in Ottawa to lead our coverage.
OTHER NOTABLE STORIES
- We’ll watch shares of Algonquin Power & Utilities today after the Oakville. Ont.-based utility announced it’s buying Kentucky Power Company in a deal worth US$2.85 billion (including US$1.22 billion in assumed debt). To help finance the purchase, Algonquin is raising $920 million in a bought-deal share sale priced at $18.15 apiece. Beyond the transaction, Algonquin also warned this year’s adjusted profit is expected to be near the low end of its forecast range. (NOTE: chase is assigned for CEO)
- Teck Resources sailed past third-quarter profit expectations. It was a record performance, in fact, amid what CEO Don Lindsay called “the extremely favourable commodity price environment.” On the downside, there’s ongoing cost pressures, and Teck is warning of further “upward pressure…through the balance of 2021 and into 2022.” In an encouraging sign ahead of Suncor’s results, Teck said there have been “signs of improvement” in productivity at the Fort Hills oil sands mine that it has a stake in.
- Canfor’s profit suffered a sharp sequential drop in the third quarter, with the blame being pinned on a sharp downturn in the company’s lumber segment as a result of slumping prices and reduced output in Western Canada due to the wildfires.
- General Motors raised its full-year adjusted profit forecast range this morning despite significant year-over-year drops in third-quarter revenue and earnings amid what Chair and CEO Mary Barra called “challenging due to continuing semiconductor pressures.” Electric vehicles clearly are the future for GM: Barra said her company is aiming for EV revenue to hit US$90 billion by the 2030, compared to a goal of US$10 billion in 2023.
- Alphabet's advertising revenue surged almost 50 per cent year-over-year in the latest quarter, driving a top line performance that edge past expectations. Chief Executive Officer Sundar Pichai also highlighted how hybrid work is driving demand for Alphabet's cloud services; indeed, revenue from that unit increased almost 45 per cent.
- Cloud was the clear driver for Microsoft in its latest quarter, with revenue from Azure and other cloud services surging 50 per cent year-over-year. The only division to post greater revenue growth was LinkedIn's advertising unit, and the only clunker at Microsoft was Surface, where revenue slid. Overall, revenue and profit exceeded the average analyst estimate.
- Twitter attempted to assuage concerns that are running rampant about the impact of Apple's changes to its iOS privacy settings. In a letter to investors, the company said the impact on revenue in the latest quest was lower than expected, and a "modest impact" has been incorporated into the fourth-quarter forecast. The company's shares are up modestly in pre-market trading amid a 41 per cent year-over-year increase in ad revenue and a daily active user base that was in line with expectations.
- Shares in Robinhood Markets are sliding in pre-market trading after the app operator that brought investing to the masses saw its losses balloon in the third quarter as revenue from cryptocurrency trading activity collapsed to just US$51 million, compared to US$233 million in the second quarter.
- Notable data: U.S. durable goods orders
- Notable earnings: Suncor Energy, Teck Resources, Agnico Eagle Mines, West Fraser Timber, Mullen Group, The Coca-Cola Co., McDonald's, Boeing, General Motors, Ford
- 10:00: Bank of Canada releases interest rate decision and monetary policy report (plus 11:00 news conference)
- 10:15: Deputy Prime Minister and Finance Minister Chrystia Freeland addresses Canadian Chamber of Commerce’s annual meeting and convention