Noah Zivitz

Managing Editor, BNN Bloomberg

Archive

It’s been one year since markets bottomed out on March 23, 2020 after going into a tailspin when the world woke up to the magnitude of the novel coronavirus’s threat to the economy. Since then, the S&P/TSX Composite Index has rallied almost 68 per cent as every subgroup moved significantly higher, with consumer discretionary and info tech notching gains of more than 100 per cent as investors piled into names like BRP (+409.5 per cent), Sleep Country Canada (+283 per cent) and Magna International (+221.9 per cent). This morning we’ll go in-depth on the anatomy of the rally and gather perspective from investment professionals on lessons learned and what might come next. Have to note that just one index member is in the red over the last year: Aurinia Pharmaceuticals (-8.5 per cent)

MARKET WATCH

U.S. futures are pointing to a lower open ahead of Day One in congressional testimony by U.S. Federal Reserve Chair Jerome Powell and U.S. Treasury Secretary Janet Yellen. They’re addressing a House Financial Services Committee hearing on the CARES Act pandemic response; we shouldn’t be surprised if lawmakers bring up the numerous reports today that Biden administration officials are planning a US$3-trillion stimulus campaign to deliver on some of the American president’s campaign pledges.

ASTRA VACCINE CONCERNS

The narrative surrounding AstraZeneca’s COVID-19 vaccine has changed significantly after a U.S. regulator flagged concerns today about the accuracy of data that captured the world’s attention yesterday. In a short statement, the U.S. Data and Safety Monitoring Board said it notified Astra and other regulatory bodies late yesterday that it was concerned about information that had been released about the clinical trial, including possibly “outdated information…which may have provided an incomplete view of the efficacy.” While the market’s reaction is muted (AZN shares down 1 per cent in London), this definitely underscores how Canada and the United States are moving at radically different speeds on the product.

LOTS OF MOVING PARTS AT THE WESTON EMPIRE

George Weston announced this morning it’s starting a formal process to sell its Weston Foods bakery division, which is home to some of Canada’s best known bread brands. In a separate release, we learned Galen G. Weston is returning to a role he knows well as he prepares to re-assume the role of president at Loblaw as a result of Sarah Davis’s upcoming retirement. He’ll have new support in the management ranks, as retail industry veteran Robert Sawyer (who sits on George Weston’s board) becomes Loblaw’s chief operating officer.

BACK TO FUNDAMENTALS FOR GAMESTOP

After getting taken for a ride by the Reddit army, Gamestop’s stock will soon get put to the test with the release of quarterly results after the closing bell. Analysts are expecting flat revenue. Will it even matter? We’ll find out during The Close. And we have some news ahead of the results, after the company disclosed that Chief Customer Officer Frank Hamlin is leaving his role next week.

OTHER NOTABLE STORIES

• We hear endlessly about the need for more supply in the country’s hottest housing markets. This morning, Canada Pension Plan Investment Board unveiled a joint venture with Tricon Residential to develop up to 3,000 rental units in the Greater Toronto Area. CPP will inject $350 million for a 70 per cent stake in the JV.
• Toronto-Dominion Bank announced a tuck-in acquisition today, with the purchase of Chicago-based quantitative fixed income firm Headlands Tech Global Markets. Terms weren’t disclosed, though TD said the purchase will have a minimal impact on its capital. As a point of reference, Headland has 15 employees, including its two co-CEOs.
• Sierra Wireless will be a stock to watch today after the internet-of-things specialist yanked its forecasts after being targeted in a ransomware attack, which forced it to halt manufacturing activity.
• We’ll also watch Mogo after it said it’s moving into the wealth management space with the all-stock purchase of Montreal-based Moka, which has half a million active members and $250 million in assets under management.
• Microsoft is reportedly in talks to buy Discord, which operates a platform for virtual communities, for more than US$10 billion. However, our Bloomberg News partners cite one source who says Discord – which has built a strong following in the gaming community – is more likely to go public than be sold.  
• In today’s non-fungible token (NFT) files: Jack Dorsey’s first tweet has been sold for US$2.9 million. The buyer, a Malaysian blockchain executive named Sina Estavi, compared “just setting up my twttr” to the Mona Lisa.  

NOTABLE RELEASES/EVENTS

• Notable data: U.S. new home sales -Notable earnings: GameStop
• 12 p.m.: U.S. Federal Reserve Chair Jerome Powell and U.S. Treasury Secretary Janet Yellen address U.S. House Financial Services Committee hearing on pandemic response
• 1 p.m.: BMO CEO Darryl White, Suncor Energy CEO Mark Little, Industry Strategy Council Chair Monique Leroux participate in Canadian Club of Toronto virtual panel on rebuilding Canada's economy
• 3:15 p.m.: Bank of Canada Deputy Governor Toni Gravelle delivers speech (“The role of the Bank of Canada in responding to market-wide stress”) to CFA Society of Toronto (1315, plus audience Q&A – no media avail)
• Telus CFO Doug French, CN Rail CFO Ghislain Houle and Rail Centric Supply Chain SVP James Cairns, Cogeco CEO Philippe Jetté, TBD Rogers executive address Desjardins conference (900, 1000, 1300, 1400 respectively)