Apr 7, 2020
The Daily Chase: Global stocks extend gains; Trump, 3M resolve mask dispute
By Noah Zivitz
Global stocks and U.S. futures are extending gains that propelled the TSX into bull market territory yesterday as the composite index closed 21 per cent above its March 23 low. Somewhat amazingly, only six* TSX-listed stocks have failed to post gains since then. We’ll keep gathering insight from investment professionals on the risks of buying into less bad news surrounding COVID-19 growth. And perspective remains key: the TSX is still down 24 per cent from the February 20 record high.
*Those six TSX stocks that have been left behind in the bull market run: Mag Silver, Bombardier, BlackBerry, Fairfax Financial, MTY Food Group, Pason Systems
3M, TRUMP RESOLVE MASK DISPUTE
N95 masks will keep flowing into Canada after 3M announced late yesterday it had reached an agreement with the Trump administration to import 166.5 million respirators from its plant in China over the next three months to help address surging demand from front line healthcare workers in the United States. “The plan will also enable 3M to continue sending U.S. produced respirators to Canada and Latin America, where 3M is the primary source of supply,” 3M said in its announcement, which elicited quick praise on Twitter from Ontario Premier Doug Ford.
ALBERTA’S SEAT AT THE TABLE
Premier Jason Kenney said late yesterday the province’s energy minister, Sonya Savage, will be involved in the OPEC++ virtual meeting that’s currently expected to take place Thursday. “We will clearly state our position that the decision by OPEC to surge supply in the face of an unprecedented collapse in energy demand has been grossly irresponsible in creating chaos in energy markets and jeopardizes millions of jobs,” Kenney told reporters.
TD CEO COUNTS ON ECONOMIC RECOVERY
Toronto-Dominion Bank CEO Bharat Masrani struck a decidedly optimistic tone when we caught up with him yesterday. While he acknowledged it’s hard to know when the economy will get back on its feet, he said there’s no doubt a recovery is coming. “Without a doubt, you can see some recovery, and some meaningful recovery, to come because we will not have a forced lockdown [forever].” It’s those government-mandated lockdowns that he said will result in some “pretty bad” economic data in the near term before “good growth” emerges on the other side of the crisis. If you missed the interview, check it out here.
BORIS JOHNSON IN ICU
The U.K. prime minister remains in an intensive care unit at St. Thomas’ Hospital in London after his COVID-19 symptoms worsened. Our Bloomberg News partners are citing a source who says Johnson’s condition didn’t change overnight. We’ll monitor developments as Foreign Secretary Dominic Raab inherits more responsibility.
OTHER NOTABLE STORIES
-ExxonMobil this morning announced it's slashing this year's capital spending budget by 30 per cent (to approx. US$23 billion) and reducing operating expenses by 15 per cent. "The long-term fundamentals that underpin the company’s business plans have not changed -- population and energy demand will grow, and the economy will rebound," CEO Darren Woods said in the release.
-TransAlta is pointing to $1.7 billion in liquidity as a sign it's "in a strong financial position", while noting it will be able to meet a debt maturity coming up in November. The power company also said it's confident that it can continue to fund dividends.
-Cineworld is suspending its dividend as part of its strategy to conserve cash, while simply stating in its filing with the London Stock Exchange that it “continues to monitor progress of [its] proposed acquisition of Cineplex.” Cineplex shares have tumbled almost 67 per cent since the end of February, and closed yesterday at less than one-third of the agreed-upon $34/share takeover price.
-Organigram Holdings is temporarily laying off 400 employees, representing 45% of its workforce, with the “primary” reason being virus containment. The Moncton-based pot producer said it believes it has enough inventory to meet demand as harvesting slows as a result of the furloughs.
-Air Canada delivered some relief to its Altitude loyalty members late yesterday, announcing their status will be extended to the end of 2021.
-Torstar's CEO informed staff yesterday of 85 job cuts designed to "address the serious impact of COVID-19" as advertising revenue dries up.
-Kraft Heinz has raised its first-quarter sales forecast; however, it cautioned that won't necessary lift profit as a result of higher expenses incurred to keep up with demand. Nonetheless, shares are moving higher in pre-market trading.
-Maple Leaf Foods disclosed today that two of its plant workers (one in Hamilton, Ont; the other at Brampton, Ont.) tested positive for COVID-19 yesterday. The meat processor said normal operations resumed at those facilities today.
NOTABLE RELEASES/EVENTS
-Notable earnings: Cogeco
-9:00 a.m. ET: Bank of Nova Scotia annual meeting
-11:15 a.m. ET: Prime Minister Justin Trudeau addresses Canadians from Ottawa
-1:00 p.m. ET: Former U.S. Federal Reserve Chair Ben Bernanke discusses economic response to COVID-19 at Brookings Institution webinar
-3:00 p.m. ET: U.S. President Donald Trump participates in Small Business Relief Update at the White House
-5:00 p.m. ET: U.S. Coronavirus Task Force holds briefing at the White House
-Canadian Association of Petroleum Producers begins two-day virtual symposium
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.
