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Noah Zivitz

Managing Editor, BNN Bloomberg

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A “perfect storm” is brewing for retirement security in this country as inflation runs wild, according to a senior vice-president at the Healthcare of Ontario Pension Plan (HOOPP), which is out with a survey today that underscores the shaky financial ground that many Canadians are standing on. We know saving for retirement has been a vulnerability for a while; now matters are being made worse by inflation and a more fragile housing market. Some numbers from the survey: 55 per cent of respondents said they’re worried about having enough in retirement, yet 32 per cent said they haven't saved anything for retirement. Meanwhile, 45 per cent said they're planning to rely on a home sale to set themselves up for retirement, and 66 per cent said the cost of living is their top concern (up 11 points from last year). The CEO of Abacus Data (which conducted the survey) joins us at 8:45 a.m.

MARKET WATCH

Global equity markets are mixed this morning and U.S. futures are pointing to a higher open, at least for now. Same old themes dominating everyone’s attention. And recession fears are evident when we look at base metals that are major economic indicators; notably, the price of copper on the London Metal Exchange fell today to the lowest level since February 2021. U.S. Federal Reserve Chair Jerome Powell has another round of testimony this morning that has the potential to flip sentiment in an instant. 

INFLATION FUELS LABOUR STRIFE

There’s much more to be said about the outlook for labour relations as unions ramp up pressure on employers to enhance wages as inflation runs wild. Unifor said more than 300 HBC warehouse workers walked off the job yesterday; the union accused the retailer of “cynically exploiting the goodwill of its employees.” Meanwhile, Bombardier announced last night that it managed to avert a strike by almost 2,000 workers after a deal with the International Association of Machinists and Aerospace Workers was ratified by its members. Sticking with Bombardier: National Bank of Canada Financial Markets Analyst Cameron Doerksen said in a note last night he’s maintaining his outperform rating on the stock with a price target than implies a potential total return of 181 per cent over the next year, notwithstanding recession fears. That commentary was included in a re-examination of his top investing ideas for this year, which now also includes Air Canada.  

TOUGH TIMES FOR BLACKBERRY

Its stock is down 43 per cent this year alone. Its shareholders gave a thumbs down to the company’s executive pay structure. And Prem Watsa — one of Canada’s best-known business leaders and investors, a long-time backer of BlackBerry, and up until recently the head of its compensation committee — barely received 50 per cent support from shareholders in being re-elected to the company’s board yesterday. A five-year chart shows long-term investors have basically been treading water (unless they bailed in last year’s blink-and-you-miss-it meme stock boom/bust). This afternoon, BlackBerry gets a chance to bolster sentiment with the release of its first-quarter results. In a preview note this week, however, RBC Capital Markets Analyst Paul Treiber said he’s expecting a “lackluster” quarter.

 U.S. BANK STRESS TESTS

The U.S. Federal Reserve will release the results of its latest stress tests this afternoon after markets close. Thirty-four banks were subjected to the exercise, including the U.S. divisions of BMO, RBC, and TD. This round’s severely adverse scenario included U.S. unemployment peaking at 10 per cent, and a 40 per cent collapse in commercial real estate prices.                                                                                           

OTHER NOTABLE STORIES

  • Imperial Oil announced this morning it’s teaming up with E3 Lithium to explore the possibility of redeveloping the Leduc oil field to extract lithium. Imperial is also paying $6.35 million for warrants representing 3.4 million E3 common shares at a price of $1.86 per warrant.
  • Neighbourly Pharmacy reported a 34.9 per cent surge in its fiscal fourth-quarter revenue this morning, and swung to adjusted profit. This is a growth-by-acquisition story that hasn’t played out well in the market: Neighbourly shares have plunged 42.4 per cent year-to-date.
  • Artis Real Estate Investment Trust said after markets closed yesterday that it raised its stake in Dream Office Real Estate Investment Trust to 14.32 per cent from 12 per cent in May. Artis said this is for investment purposes. Let’s be mindful though that Artis is working in concert with Sandpiper Group, which has a track record in activism.

NOTABLE RELEASES/EVENTS

  • Notable data: Canadian manufacturing sales (May flash estimate) and wholesale trade (May early indicator), U.S. initial jobless claims
  • Notable earnings: Neighbourly Pharmacy, BlackBerry, FedEx, Rite Aid, Smith & Wesson
  • 945: Supreme Court of Canada releases judgment in leave applications in matter of Rubinson-Huron treaties (background here; could be financially consequential for Ontario) 
  • 1000: U.S. Federal Reserve Chair Jerome Powell addresses U.S. House Financial Services Committee Hearing "Monetary Policy and the State of the Economy"
  • 1030: Alberta Premier Jason Kenney, Cenovus Energy CEO Alex Pourbaix, and a slew of other Canadian energy officials speak at Wilson Centre event “Pathways to net Zero for Canada’s Oil Sands: A New Approach” in Washington, D.C.
  • 1115: Mayor John Tory addresses Toronto Board of Trade
  • 1200: CPPIB CEO John Graham addresses Canadian Club in Toronto
  • 1200: RBC Chair Kathleen Taylor participates in Economic Club panel "Women in Leadership: A Fresh Outlook for the New Economy" in Toronto
  • 1630: U.S. Federal Reserve releases bank stress tests 
  • Alberta Premier Jason Kenney meets with representatives from the U.S. Congress in Washington, D.C.  
  • European Union leaders begin two-day meeting 
  • Deadline for Shaw and Rogers to notify the Competition Tribunal if they plan to seek mediation