All of a sudden there are hints of optimism about NAFTA 2.0. Canadian ambassador David MacNaughton told us Canada is “prepared to show some flexibility” and that “we’re well on our way to modernization” if the U.S. and Mexico can resolve their differences on “the auto thing”. And on that front, Mexico Economy Minister Ildefonso Guajardo said yesterday the two sides are “doing our best to do it as fast as possible.” We’ll assess the thorniest issues that all three sides will have to address if the “auto thing” can be put to bed.
IN CONVERSATION WITH MARK MACHIN
Jon Erlichman will speak with the CEO of Canada Pension Plan Investment Board this morning. We’ll go around this world with him and get his perspective on the hot button macro issues that have dominated our editorial agenda lately. Watch for it at 10:30 a.m. ET.
BARRICK “WAS ALMOST DEAD”
John Thornton delivered a state of the company address to Barrick Gold staff on Wednesday. And he didn’t mince words. “This company was almost dead because it had so much debt,” he said according to prepared remarks. He also shot down Detour Gold takeover speculation (“The answer is no”), payouts (“my fantasy … [would be] when every year we’re increasing the dividend a little bit”), and the most infamous deal in Barrick history (“the acquisition of Equinox might have been if not the worse, one of the five worst acquisitions in [mining] history”).
TURKEY WATCH
We’ll monitor the latest developments in Turkey, where the country’s currency is into another day of significant losses (down 11 per cent against the USD at one point). Key catalyst will come this morning with President Erdogan delivers a public address where investors will be listening for any indication he’s prepared to ease financial crisis fears.
ANOTHER CENOVUS ASSET SALE
Alex Pourbaix’s pruning of Cenovus continues, with a $625-million sale of Alberta Montney assets announced late yesterday. NuVista raised its hand as the buyer, calling it a “rare and compelling” acquisition opportunity. Back to Cenovus: Proceeds will go toward balance sheet relief. The company also says there’s “high level of interest” in other assets being shopped but that it will only accept “fair value” for its holdings.
ACKMAN’S ASSESSMENT OF TIM HORTONS
Bill Ackman is calling out Tim Hortons’ “muted” performance in the latest quarter. The U.S. hedge fund manager opined on Tims’ performance in a letter to Pershing Square Holdings investors late yesterday, saying the flat second-quarter same-store sales at Tims can be pinned on its bread and butter menu offerings. Ackman noted recent announcements like all-day breakfast, as well as a kids’ menu and loyalty program should help turn Tim Hortons around. See the full letter here.
OTHER NOTABLE STORIES
-We expect Ellis Jacob will be thrilled to discuss his company’s performance with us at 1:10 p.m. ET. Cineplex just reported a record second-quarter with profit surging 1671 per cent on the back of double-digit revenue growth. Avengers, Deadpool and The Incredibles get the credit. As do pricey concessions, with food revenue surging to $114 million in the quarter.
-AutoCanada’s CEO and CFO have resigned in an overhaul of the auto dealership owner’s senior ranks announced late yesterday. It’s been a tumultuous couple of months since an activist shareholder spoke out in June and ACQ shares have tumbled 35 per cent this year. We’ll chase the company’s executive chair.
-Tesla shares are up more than two per cent in pre-market trading after CNBC reported the company’s board is preparing to advance its review of Elon Musk’s privatization gambit next week.
-If you missed it, late yesterday the Alberta Securities Commission said it will hold a hearing next Wednesday to decide whether Marc Cohodes should be blocked from trading shares of Badger Daylighting and spreading misleading or false statements about the company (one of his prominent short targets).
-Freshii’s same-store sales growth decelerated to 0.9 per cent in the second quarter (from 1.6 per cent in Q1 and 4.2 per cent in Q2 ’17).
NOTABLE RELEASES/EVENTS
-Notable earnings: Cineplex, Freshii
-Notable data: Canadian labour force survey, U.S. CPI
-2:00 p.m. ET: Infrastructure Minister François-Philippe Champagne holds media avail in Toronto
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.
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