Global stocks and U.S. futures are slipping this morning as investors await Jerome Powell’s opportunity today to quell their inflation fears. The U.S. Federal Reserve chair will participate in a noon-hour moderated conversation dubbed “What’s Up With the Economy?” at The Wall Street Journal’s virtual jobs summit. We’ll be listening for any indication that he’s growing uneasy with the message emanating from the bond market.
'POCKETS OF FINANCIAL STRESS' FOR CANADIANS
That’s the framing from Equifax this morning in its latest quarterly report on consumer credit conditions in this country. While the headline figure shows average consumer debt levels (ex-mortgages) fell in the fourth quarter, the early warning signs are there if you look hard enough. Indeed, Equifax said there was a 31 per cent jump in 30-day (or more) delinquencies on mortgages, while early-stage delinquencies on instalment loans surged 76 per cent compared to the third quarter.
OPEC+ DECIDES ON OUTPUT
West Texas Intermediate and Brent crude prices are little changed in early trading ahead of today’s meeting of OPEC+ ministers. It’s unclear when precisely we’ll find out if the group will go ahead and raise output in a bid to keep the market in check; also remains to be seen if Saudi Arabia will maintain, abandon or taper its voluntary cuts of 1 million barrels per day. The consequences could be profound, including in Canada – where energy stocks are the second-best performing group on the TSX so far this year, with a gain of 16.2 per cent heading into today. Amazingly, just one member of the group is in the red this year (Parkland, down 1.04 per cent).
BOMBARDIER MAKES ITS CASE TO INVESTORS
It hasn't been easy investing in Bombardier. The former Canadian champion that was once source of industrial pride is languishing in penny stock territory, and it’s fresh off yet another retrenchment after announcing last month it will cut 1,600 jobs and end production of its Learjet. Today, CEO Eric Martel will attempt to woo investors in a presentation; already this morning, Bombardier released financial targets for 2025, including a goal of generating at least $500 million in fresh cash flow that year.
OTHER NOTABLE STORIES
- Kinaxis shares were down as much as 22 per cent in early trading after the Ottawa-based software company reported a sharp drop in fourth-quarter profit and forecast revenue for this year that trails the average estimate
- Unifor National President Jerry Dias is being quoted in other media outlets as saying Air Canada has agreed to refund passengers in exchange for direct government aid. A spokesperson for Air Canada made it clear to us this morning, however, that the airline has nothing new to add to its comments from Feb. 12, when then-CEO Calin Rovinescu said he was “very encouraged” by conversations with the feds.
- Canadian Natural Resources asserted its financial strength this morning by raising its dividend 11 per cent even as it booked a $143-million reserve relating to the Keystone XL pipeline. Production climbed to a record of 1.2 million barrels of oil equivalent per day in the fourth quarter, while its cash flow was cut in half compared to a year earlier.
- Granite could be a stock to watch today after the industrial-focused real estate investment trust announced $364 million in U.S. and European acquisitions alongside an increase in fourth-quarter funds from operations.
NOTABLE RELEASES/EVENTS
- Notable data: Canadian labour productivity, U.S. initial jobless claims
- Notable earnings: Martinrea, NFI Group, Chartwell Retirement Residence, Parkland, Algonquin Power & Utilities, Costco, Gap
- 8 a.m. ET: OPEC+ ministerial meeting
- 9 a.m. ET: Bombardier holds investor day (plus media teleconference with CEO Eric Martel at 12:30 p.m.)
- 10 a.m. ET: Canada Mortgage and Housing Corporation releases “Housing Market Insight: The Relationship Between Migration and House Prices”
- 11 a.m. ET: Infrastructure Minister Catherine McKenna makes announcement alongside Canada Infrastructure Bank CEO Ehren Cory, Ottawa Mayor Jim Watson, Industry Minister François-Philippe Champagne
- 12:05 p.m. ET: U.S. Federal Reserve Chair Jerome Powell addresses The Wall Street Journal jobs summit
- 1 p.m. ET: Premiers hold virtual news conference after meeting of the Council of the Federation
- 3:30 p.m. ET: Natural Resources Minister Seamus O’Regan addresses House Special Committee on the Economic Relationship between Canada and the United States
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