Dec 10, 2018
The Daily Chase: Huawei CFO back in court; stocks under pressure
By Noah Zivitz
Huawei CFO Meng Wanzhou will be back in court today for a bail hearing in Vancouver; meanwhile, her arrest on Canadian soil has triggered an increasingly ominous response from Beijing. Canadian Ambassador John McCallum reportedly got an earful from China Vice Foreign Affairs Minister Le Yucheng over the weekend, and here’s a sampling of how Chinese state media is framing the situation:
-“If Meng is refused bail and extradited to the U.S., Canada will get minimal gratitude from the U.S., but maximum opposition from China. … Canadian public interest will definitely be impaired if Sino-Canadian relations are put at a risk of major retrogression.” (source: http://www.globaltimes.cn/content/1130954.shtml)
-"Canada has set a dangerous precedent by acting in this manner. Canada's misdeeds, which are lawless, unreasonable and callous, have caused serious damage to its relations with China. ... We here give a piece of advice that Canada should not be wrong-headed any longer but immediately release the senior executive and effectively protect her legitimate rights and interests, otherwise there will be serious consequences and Canada is to take all responsibility." (source: http://www.xinhuanet.com/english/2018-12/09/c_137660091.htm)
Would be good to gather informed perspective today on whether Chinese investments in Canada could be at risk if Meng ends up being extradited to the U.S.
TOP GLOBAL EXECS IN TORONTO
“Navigating a World in Disruption” is the official theme for this year’s Toronto Global Forum. But it’s probably not unreasonable to think China’s clash with Canada and the U.S. over the arrest of Huawei’s CFO will disrupt the agenda. We’re looking forward to interviews at the Forum today with the likes of Dominic Barton, Navdeep Bains, and John Chen.
STOCKS SLUMP
Futures, for now, are pointing to more losses when trading begins in New York amid spillover from Meng’s arrest and uncertainty ahead of a Brexit vote tomorrow in the U.K. Parliament. The Dow Jones Industrial Average has shed 1,437.48 points over its three-session losing streak; meanwhile, the TSX is just 73 points above its lowest close of the year.
BREXIT VOTE IN DOUBT
U.K. Prime Minister Theresa May has reportedly decided to postpone a key vote in Parliament on her Brexit plan to avoid a potentially devastating rejection by lawmakers. We’ll await official word and keep our eye on market reaction.
FINANCE MINISTERS MEET
Bill Morneau is meeting with his provincial counterparts today in Ottawa to discuss the state of the economy, and Ontario’s Vic Fedeli is making it clear he’s none too pleased with the feds over their equalization formula (which has shut out Ontario for the first time in a decade) and the bumpy early days of legal pot.
MUSK MUSES ABOUT GM PLANTS
Who knows how much can be read into it, but Tesla CEO Elon Musk isn’t ruling out the possibility of scooping up plants that General Motors has put on the chopping block. “It’s possible that we would be interested if they were going to sell a plant or not use it … that we would take it over,” Musk said in an interview with 60 Minutes, in which he also reiterated he’s under “insane stress”, declared he doesn’t respect the SEC, and disclosed he was “almost beaten to death” in school. Back to his comment about GM: we’ll chase reaction from Oshawa’s mayor.
OTHER NOTABLE STORIES
-Detour Gold is postponing a special shareholders' meeting by 48 hours to give investors more time to vote on the miner's proxy fight with Paulson & Co. Detour said in a release today the preliminary tally suggests votes are tilting in Paulson's favour as a result of dispersion and a "significant" bloc siding with the activist. The meeting is now scheduled for Thursday at 10:00 a.m. ET.
-Don’t look now, but the discount on Western Canadian Select oil has narrowed to US$15 per barrel.
-The union representing Flair Airlines’ flight attendants has called off its strike threat and will instead lodge a complaint against the airline with the Canada Industrial Relations Board.
-If you missed it, multiple reports surfaced Friday evening indicating Uber Technologies has made a confidential filing for an initial public offering.
NOTABLE RELEASES/EVENTS
-Notable data: Canadian building permits, Canadian housing starts
-10:00 a.m. ET: Ontario Financial Accountability Officer releases economic and budget outlook
-3:45 p.m. ET: Finance Minister Bill Morneau holds closing news conference at finance ministers’ meeting in Ottawa
-Four-day Toronto Global Forum begins
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.
