Dec 11, 2018
The Daily Chase: Canada Goose stung by Huawei fallout; oil producers set 2019 budgets
By Noah Zivitz
Huawei CFO Meng Wanzhou’s bail hearing will resume at 1:00 p.m. ET in Vancouver amid ongoing protest in China. Bloomberg is reporting there’s an online push to boycott Canadian goods, including Canada Goose. Meanwhile, the state-backed Global Times is warning “Canada can’t fool China”. We’ll continue tracking developments and gathering perspective on the Canadian companies that have the most at stake in the international dispute.
And, in a sign that Meng’s arrest hasn’t derailed the China-U.S. trade standstill, China Vice Premier Liu He spoke by phone late yesterday with U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer about next steps in their negotiations.
TSX LOSING STREAK
The TSX Composite Index narrowly avoided closing at its lowest level of the year yesterday after posting a third straight losing session. Over that span, the TSX has dropped almost three per cent. Worth pointing out Canada Goose is the worst-performing stock during that stretch, with a 17.9 per cent decline.
BUDGET SEASON IN THE OIL PATCH
Cenovus Energy has set its 2019 capital budget at $1.2-$1.4 billion, with the bottom end of the range falling slightly from this year's spending target. The company says it's too early to calculate the full-year impact of mandated production cuts in Alberta and it's warning there's no set timeline for additional asset sales due to "the challenging commodity price environment." Meanwhile, Athabasca Oil says it will slash one-quarter of head office jobs and cut executive/director salaries by 10 per cent, while setting next year’s budget at $95-$110 million. Athabasca also announced late yesterday it's selling some pipeline and storage assets to Enbridge for $265 million.
IN CONVERSATION WITH BRUCE LINTON
From the bumpy early days of legal recreational cannabis, to a peer’s battle against shorts, to the latest cross-over blockbuster – lots of ground to cover today in a feature interview with Canopy Growth CEO Bruce Linton at 8:45 a.m. ET. If ever there was doubt about his refusal to mince words, be sure to scroll to the bottom of David George-Cosh's weekend feature on the Altria-Cronos deal.
NOTE: If you missed it, check out Ontario Finance Minister Vic Fedeli venting about pot supply shortages in the interview we conducted with him yesterday afternoon:
OTHER NOTABLE STORIES
-Royal LePage says home prices will rise at a "snail's pace" next year, with Montreal (+3.0 per cent) seen outpacing Vancouver (+0.6 per cent) and Toronto (+1.3 per cent).
-The latest ManpowerGroup Employment Outlook Survey shows 14 per cent of Canadian employers are planning to increase their headcount next year, while 79 per cent intend to main current staffing levels. Of all sectors, Transportation & Public Utilities has the strongest outlook for hirings.
-Hydro One isn’t throwing in the towel on its $6.7-billion takeover of Avista, with the two companies saying they will ask the Washington Utilities and Transportation Commission to reconsider its decision to block their deal.
NOTABLE RELEASES/EVENTS
-8:30 a.m. ET: Enbridge holds investor conference in New York
-10:00 a.m. ET: Senate Committee on Agriculture and Forestry releases report on effects of climate change and potential effect of carbon pricing
-10:00 a.m. ET: Google CEO Sundar Pichai addresses U.S. House Judiciary Committee
-10:00 a.m. ET: Parliamentary Budget Officer releases report “Fall Economic Statement 2018: Issues for Parliamentarians”
-5:30 p.m. ET: Foreign Affairs Minister Chrystia Freeland speaks at Rotman School of Management fireside chat in Toronto
-Four-day Toronto Global Forum continues
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.
