First Look With Surveillance: Tesla Profit, Dems Split
Today it’s about fundamentals for Rogers Communications after more than a week of being in the news amid leaks about a power struggle pitting the company’s chairman (and son of the founder) against family members, the chief executive, and the rest of the board. The telco has posted flat third-quarter revenue and an adjusted profit per share that matched estimates as the flagship wireless business benefitted from higher roaming revenue and the cable business got a boost from internet customers upgrading their service packages, while the media division saw adjusted EBITDA plunge 63 per cent due to tough year-over-year comparisons. We’ll find out if the performance is more interesting to analysts than the board-level drama when the conference call starts at 8 a.m. (watch for Jameson Berkow’s live coverage on Twitter and at BNNBloomberg.ca), when we should also expect plenty of discussion about the pending acquisition of Shaw Communications. About the board tension: Rogers revealed today that a new executive oversight committee has been tasked with establishing “clear protocols for interactions between the chair and members of management.”
TSX AT ALL-TIME HIGH
The composite index has closed higher in 11 straight sessions, matching its longest winning streak since November 2019, and enters the day at an all-time high of 21,188.19 points. Yesterday it was Canadian National Railway that led the way higher, and that stock is poised for more gains at the start of trading after The Wall Street Journal broke the news that Elliott Management (known for its track record in activism) has amassed a “big stake” in CN. If you missed it, check out our conversation with outgoing CEO Jean-Jacques Ruest, who was emphatic that CN Rail will not get “pushed around by a hedge fund.”
CRAVING BANK DIVIDENDS
It’s been more than a year and a half since the Office of the Superintendent of Financial Institutions blocked Canada’s banks from raising their dividends. There’s plenty of pent-up demand, and clearly plenty of pent-up capacity. Rob Wessel from Hamilton ETFs this week estimated that once OSFI unshackles the banks, there could be immediate hikes of up to 25 per cent. Wessel joins Paul on The Street to elaborate on that prediction and perhaps also weigh in on the remarkable call by Scotia’s Derek Holt that the Bank of Canada might need to raise rates eight times by the end of 2023.
…ABOUT THOSE HIGHER RATES
If Holt is right, the central bank’s benchmark policy rate would rise to the highest level since November 2008 – with profound consequences for borrowers, savers and investors. We’ve already heard mortgage expert Rob McLister warn that going with a variable rate right now is akin to “picking up a penny in front of a steaming locomotive.” We’ll keep chasing insight on what rapid-fire rate hikes would mean for Canadians and their money.
OTHER NOTABLE STORIES
- Against the backdrop of Bitcoin’s march this week into record territory, WealthSimple today announced it’s adding cryptocurrency exposure to its group retirement plan – a first in Canada.
- China Evergrande Group sank as much as 14 per cent overnight as trading resumed for the first time since Sept. 30. Impossible to untangle what the primary driver is, but one new piece of information is that the plan to sell a stake in the company’s property-management business has collapsed.
- Tesla notched record profit in the third quarter as revenue surged 57 per cent year-over-year despite challenges presented by global supply chain problems. Nevertheless, the stock is drifting lower in pre-market trading.
- The road to going public has been treacherous for WeWork; but, at last, the operator of shared office spaces is finally about to hit Wall Street after closing its deal with a SPAC. What lessons have been learned? And how much investor appetite is there for the company? We’ll lean on our Bloomberg partners for insight.
- Stantec said this morning it’s paying US$500 million to acquire Cardno Limited’s engineering and consulting units in North America and the Asia Pacific region, and sees an immediate double-digit boost to its adjusted profit from the deal.
- CI Financial announced yet another U.S. acquisition this morning. It’s buying Seattle-based McCutchen Group, which has US$3.4 billion in assets under management. Terms weren’t disclosed.
- Notable data: U.S. initial jobless claims and existing home sales
- Notable earnings: Rogers Communications (8:00 analyst call), Precision Drilling, AT&T, Intel
- 10:00: Ontario Superior Court resumes hearing Cineworld-Cineplex case
- 10:00: Prime Minister Justin Trudeau and Deputy Prime Minister/Finance Minister Chrystia Freeland hold media avail in Ottawa
- 13:00: Alberta Energy Minister Sonya Savage discusses report on public inquiry in anti-Alberta energy campaigns
- 15:40: Brookfield Asset Management Vice-Chair Mark Carney delivers keynote at Capitalize for Kids conference (1540)
- WeWork shares expected to start trading on NYSE around this date
- EU leaders begin two-day meeting in Brussels (energy prices among agenda items)