The Big Three: Pot M&A in spotlight; U.S.-Mexico NAFTA deal nears; Musk shelves privatization
Our Diageo scoop lit up pot stocks on Friday; today, we wait to see the next shoe to drop as vulnerable industries hunt for partners in Canada’s soon-to-be-legal recreational cannabis market. Among Friday’s notable movers, Canopy Growth Corp. (WEED.TO) shot up as much as 10 per cent to a record intraday high of $59.80 per share. And that’s even keeping in mind Canopy already hitched its ride to Constellation Brands Inc. Perhaps the most remarkable comment surrounding BNN Bloomberg’s Diageo scoop came courtesy of industry consultant Deepak Anand, who told us he “suspects” Canadians will be shocked by the heavyweight consumer packaged goods companies that are also scouring the sector.
U.S.-MEXICO TRADE TALKS CONTINUE
The Mexican trade delegations will be back at the U.S. Trade Representative’s office in Washington, D.C. as bilateral talks continue. Bloomberg is reporting the two sides have made “significant breakthroughs” on the automotive and energy files, but they’re still not far enough along to invite Canada back to the table. We’re waiting to see if that “handshake” announcement will ever materialize. U.S. President Donald Trump fanned the speculation on Saturday, tweeting “A big Trade Agreement with Mexico could be happening soon!”
MUSK ABANDONS PRIVATIZATION
That didn’t last long. Elon Musk announced late Friday night he was giving up on his controversial attempt to take Tesla Inc. (TSLA.O) private, citing feedback from shareholders and the realization that his campaign “would be even more time-consuming and distracting than initially anticipated.” The abrupt reversal came a few weeks after his bombshell US$420 takeout announcement via tweet on Aug. 7, has sent Tesla shares down 4.5 per cent in pre-market trading, and begs some important questions, like why he didn't do the diligence before going public; whether this spares him from the regulatory scrutiny that seemed to be building as a result of the initial tweet; and what all of this says about Musk’s state, particularly in light of that recent New York Times interview.
POLOZ STICKS TO SCRIPT ON GRADUAL RATE MOVES
Bank of Canada Governor Stephen Poloz laid out the risks surrounding digital disruption in a speech at the Jackson Hole symposium on Saturday. As usual, it was in the last couple paragraphs that he shed some light on his thinking vis-à-vis rates. “Taking a gradual, data-dependent approach to policy is an obvious form of risk management in the face of augmented uncertainty,” he said in reference to technology’s impact on inflation. Implied probability of the bank lifting rates next month is little changed this morning at 24.1 per cent.
OTHER NOTABLE STORIES
-Bloomberg is reporting Apple will unveil three new phones in September, including one with a 6.5-inch screen.
-Aimia announced it hired Deutsche Bank co-head of aviation investment banking Nathaniel Felsher as its new president and chief strategy officer.
-1:55 p.m. ET: U.S. President Donald Trump holds bilateral at White House with Kenya President Margaret Kenyatta
-OPEC and production partners hold joint technical meeting in Vienna to discuss compliance
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.