The Big Three: In search of CannTrust's saviour; drop in key rate used for stress tests; Boeing's US$5B charge
CannTrust shares went on a wild ride yesterday after our scoop on the early hunt for a white knight that could potentially shield the beleaguered cannabis producer from a worst-case enforcement scenario stemming from the unlicensed production scandal. We’ll see where the story leads us today, and we’re looking forward to analyst reaction this morning on The Open.
CANADIAN CONSUMERS DISAPPOINT
At least based on Statistics Canada's latest retail sales report, which shows a surprise 0.1 per cent drop in total purchases in May. There were notable declines in activity at supermarkets as well as clothing and alcohol stores. The loonie fell sharply in the immediate aftermath of the data.
The benchmark posted five-year mortgage rate has dipped to 5.19 per cent from 5.34 per cent in the first downward move since September 2016, according to RateSpy.com, which acknowledges this is merely “an incremental psychological boost for buyers.” We’ll dive into the implications for purchasing power with RateSpy’s Rob McLister on The Open.
737 MAX LATEST
Boeing says it will book a US$4.9-billion charge in its second quarter to cover liabilities tied to the grounding of its embattled jet program. The company also warned Max production costs will jump and thus eat into margins. In a bit of perceived positive news, Boeing said it expects the jet will start returning to service in the fourth quarter of this year.
FRUGAL OR CHEAP?
If you’re inclined to give someone a stink-eye for not even attempting to reach for the bill, or know someone who fakes a family member’s age (!) to get discounts, you won’t want to miss CTV Chief Financial Commentator Pattie Lovett-Reid's blog and on-air reporting today.
OTHER NOTABLE STORIES
-Barrick Gold has finally struck a deal to buy full control of Acacia Mining in an all-stock offer valued at US$428 million. Now Barrick will aim to resolve long-standing friction with Tanzania’s government.
-Canfor announced another round of curtailments in B.C. last night, including the permanent elimination of a shift at one of its sawmills, with a senior executive citing “very significant challenges”.
-Shares of Microsoft are rallying in pre-market trading after a booming cloud business helped drive a 21 per cent surge in fiscal fourth-quarter profit.
-PepsiCo is targeting expansion in Africa with a friendly agreement to buy Pioneer Foods, whose shares are surging in Johannesburg.
-Fresh off shelving the initial public offering of its Asian unit, Anheuser-Busch InBev is selling its Australian unit for US$11.3 billion (and keeping hope for the Asia IPO alive). The beermaker’s ADR is up more than four per cent in New York pre-market trading.
-Notable earnings: Schlumberger
-Notable data: Canadian retail sales
-9:00 a.m. ET: Ontario Securities Commission hearing regarding proposed settlement with Caldwell Investment Management
-10:15 a.m. ET: Justice Minister David Lametti announces support for steel industry in Montreal
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.