Noah Zivitz

Managing Editor, BNN Bloomberg

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The S&P/TSX Composite Index will play catch-up today after the Dow and S&P 500 rallied yesterday by the most since early April. Investors were clearly not shaken by U.S. Federal Reserve Chair Jerome Powell’s warning in a 60 Minutes interview that the economic recovery could drag into late next year. Instead, sentiment appeared to have been lifted by encouraging interim Phase 1 results from Moderna Inc.’s experimental COVID-19 vaccine and by hope surrounding the gradual reopening of economies – which also propelled WTI prices higher. Should point out some big dual-listed Canadian names participated in the rally, including Bank of Nova Scotia (+eight per cent), Canadian Natural Resources (+10 per cent), and Canadian Pacific Railway (+five per cent). Should also point out that Moderna shares abruptly turned sharply lower in afternoon trading today after an online industry publication poked holes in yesterday’s euphoria.

BIDEN WOULD BLOCK KEYSTONE XL 'FOR GOOD'

Joe Biden is prepared to pull the rug out from under Canada’s beat-down energy sector. His campaign policy director said in a statement yesterday the presumptive Democratic nominee would “proudly … stop it for good by rescinding the Keystone XL pipeline permit” as part of his strategy to combat climate change if he’s elected U.S. President. It’s a dramatic change in course from the Trump administration, which gave KXL its blessing shortly after Donald Trump took office; and it comes less than two months since TC Energy finally signed off on building the controversy-plagued pipeline thanks to an investment and backstop from the Alberta government. We’ll gather reaction to the Biden camp’s pledge to kill KXL.

RETAIL IN THE COVID-19 ERA

Ontario, Saskatchewan and British Columbia are loosening their restrictions on retailers today. The biggest questions are what the experience will look like for customers, and how soon shoppers will feel comfortable going back into stores. And what about the stakes for retailers as another month of rent payments looms?  We’ll aim to address those issues today.

KEEPING AN EYE ON AIR CANADA

We’ll watch for any market reaction this morning to the airline’s announcement late Friday that it will lay off up to 60 per cent of its workforce as customer traffic collapses, and we’ll hunt for answers on what else Air Canada might have to do to survive the pandemic.  

OTHER NOTABLE STORIES

-Walmart shares are up around four per cent in pre-market trading after the giant retailer posted blowout sales in the first quarter, including an 8.6 per cent gain in total revenue and a 74 per cent surge in U.S. online sales. It is, however, withdrawing its full-year outlook as a result of the great unknown of how the pandemic and economic recovery will unfold.

-Hexo will be a stock to watch after the pot producer said late yesterday it intends to launch an offering of units, led by Canaccord Genuity. This morning, it confirmed the details: 55.6 million units priced at $0.90 apiece, for total proceeds of $50.04 million. Each unit includes one common share and a purchase warrant for half of a common share.

-CBOE Global Markets is expanding in Canada. It announced today it has agreed to buy MATCHNow from Virtu Financial. MATCHNow is billed as the largest alternative equities trading system in this country, accounting for about seven per cent of total tading volume.

-Shares of Home Depot are slipping in pre-market trading this morning. The home improvement retailer’s total first-quarter sales jumped 7.1 per cent, while same-store sales in the U.S. rose even more. However, the company has suspended its full-year forecast and said it faced US$850 million in pre-tax expenses tied to its COVID-19 strategy.

-Back to Moderna for a moment. Late last night it priced an offering of 17.6 million common shares at US$76 apiece – a four-dollar discount to yesterday’s closing price.

-From yesterday: Silvercorp Metals sweetened its takeover offer for Guyana Goldfields in an attempt to seal the deal after facing competing interest from Gran Colombia. Under the terms of the new, friendly arrangement, Guyana Goldfields shareholders will receive $1.30 per share in cash and stock, up from the initial offer of $0.60/share in cash or stock.

-Toronto-based Chesswood Group, a financier catering to small- and medium-sized businesses, today suspended dividend payments to help it resume funding activities in the United States.

PROGRAMMING NOTE: We’re adding another hour to our live COVID-19 Impact coverage today, with Amanda Lang guiding coverage from 2-3 p.m. ET. Greg Bonnell and Catherine Murray will take over from 3-4 p.m. ET to cover the last hour of trading activity, and Amanda will close things out from 4-5 p.m. ET.

NOTABLE RELEASES/EVENTS

-Notable data: U.S. housing starts and building permits

-Notable earnings: Walmart, Home Depot

-10:00 a.m. ET: U.S. Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin address U.S. Senate Banking Committee hearing on COVID-19 spending measures

-11:00 a.m. ET: Prime Minister Justin Trudeau addresses Canadians from Ottawa

-11:00 a.m. ET: U.S. President Donald Trump delivers remarks at the White House on supporting farmers, ranchers and food supply chain

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