Noah Zivitz

Managing Editor, BNN Bloomberg

Archive

America’s best-known banker is touting his institution’s resilience in the face of COVID-19. “We are prepared for all eventualities as our fortress balance sheet allows us to remain a port in the storm,” Jamie Dimon said alongside second-quarter results showing JPMorgan Chase & Co. generated record revenue of US$33.8 billion while net income was cut in half as provisions for credit losses jumped to US$10.5 billion. The details are where it gets really interesting: while core banking operations suffered, JP Morgan’s trading desk was a money-making machine – notably with fixed income markets revenue soaring 99 per cent. But not all banks are created equal. To wit: Wells Fargo shares are sliding in pre-market trading after the embattled lender slashed its dividend (as previously telegraphed) as it swung to a second-quarter loss amid a sharp increase in credit loss provisions.

EXTENDING BORDER RESTRICTIONS

The Globe and Mail and Politico are reporting the restrictions against non-essential travel across the Canada-U.S. border will be extended by at least another month to August 21. That’s despite a recent plea from dozens of U.S. lawmakers to develop “a plan to safely allow for reasonable travel taking into account public health considerations but acknowledging our unique interconnected economies.” We’ll chase reaction from the travel and hospitality industries.          

WILD SWINGS

The intraday moves yesterday were remarkable as all of the major North American markets fizzled out through the afternoon, most notably as the Nasdaq tumbled four percent from peak to trough. The selling accelerated around 3 p.m. ET as California’s governor rolled back the state’s reopening by halting indoor operations at restaurants and hair salons, among other venues. But there are other dynamics at play; check out this piece from our Bloomberg partners on Robinhood traders being taken for a ride on Tesla.

LOOSENING ONTARIO’S RESTRICTIONS

Perhaps California’s shift into reverse will serve as a cautionary tale as Canada’s most populous province prepares to enter the next stage of reopening its economy. Stage 3 begins in most Ontario regions on Friday, albeit with Toronto and other large cities held back. Restaurants will be one of the most closely-watched sectors as the next stage allows for as many as 50 people in indoor venues so long as physical distancing can be maintained (or, in the case of restaurants, if there’s plexiglass or another barrier between tables). We’ll hear from the head of the SIR Corp. restaurant-chain conglomerate this afternoon.

OTHER NOTABLE STORIES

-The United Kingdom unveiled a phased plan to ban Huawei from the country’s 5G networks today in a move that renews focus on how Canada will handle the delicate decision-making process.

-The aviation industry’s tremendous challenges in dealing with COVID-19 are being framed through a different lens today as the Greater Toronto Airports Authority said it’s slashing 27 per cent of its headcount. The GTAA is responsible for Toronto Pearson International Airport

-Calfrac Well Services announced plans for an elaborate recapitalization today while initiating proceedings under the Canada Business Corporations Act. The strategy includes a significant debt-for-equity swap that will result in existing common shareholders diluted to the point of only holding eight per cent of the company.

-Another sign today of tough times facing the liquefied natural gas market: Woodside Petroleum disclosed it’s preparing to book US$3.92 billion in impairments, including US$810 million tied to the Kitimat LNG project in British Columbia.

-China is imposing sanctions on Lockheed Martin in response to the company’s potential deal to sell missile parts to Taiwan.

-China also posted surprise growth in June imports and exports. All told, the country’s trade surplus narrowed to US$46.4 billion last month.

NOTABLE RELEASES/EVENTS

-Notable data: U.S. CPI

-Notable earnings: JPMorgan Chase & Co., Citigroup, Wells Fargo, Delta Air Lines

-9:30 a.m. ET: Senate Committee on National Finance releases interim report on government's COVID-19 response

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