Jan 28, 2019
The Daily Chase: Markets brace for busy week; Parliament resumes
By Noah Zivitz
It’s the calm before a storm of market catalysts. Major European indices are little changed and futures are pointing to modest declines at the start of trading as investors brace for what’s ahead this week: another Brexit vote, two days of U.S.-China trade talks, a Fed decision (plus news conference), Canadian GDP, U.S. jobs, and a whole lot of earnings. We’ll pick up where we left off on Friday, setting expectations for potential major market movers in the days ahead.
MPs RETURN TO PARLIAMENT
The House of Commons gets back to business today after a six-week break, with the opposition primed to pounce on the government’s China strategy amid Ambassador John McCallum’s ouster. Basic question is how Prime Minister Justin Trudeau untangles the mess of messaging. To underscore how the PM is caught between two economic giants, here’s The China Daily’s take: “It is high time Trudeau reflected upon whether it is worthwhile allowing the U.S. to lead him by the nose.”
TSX AT HIGHEST SINCE NOVEMBER
The S&P/TSX Composite Index closed on Friday at its highest level since Nov. 7. Top gainer since then is Cronos Group, with its Altria-fuelled 64.2 per cent surge.
VALE DAM DISASTER
Vale is in full damage control mode in the wake of a dam failure on Friday at its Feijao Mine in Brazil that has killed at least 58 people. The company said yesterday it has established two independent board committees with tasks related to the disaster and “deliberated” suspending its dividend (it’s unclear whether the dividend has actually been suspended).
SNC WARNING
SNC-Lavalin warned this morning its fourth-quarter results will be "materially" affected by a "serious problem" at an unidentified project in its mining and metallurgy division. SNC also said it will take a $1.24-billion goodwill impairment charge amid a "deterioration in our near-term prospects which we cannot ignore". The company specifically calls out the impact of souring Canada-Saudi relations.
OTHER NOTABLE STORIES
-BlackBerry beefed up its management team this morning, announcing Bryan Palma is joining the company as president and chief operating officer. Palma most recently served as a senior VP at Cisco Systems. Worth pointing out that CEO John Chen’s contract was extended last year until 2023.
-Fortis announced this morning it will sell its stake in a B.C. hydro project for $1 billion. Proceeds will be steered toward the company’s previously-stated five-year capital plan.
-Descartes Systems is buying Visual Compliance, which helps clients avoid running afoul of international sanctions, for $330 million.
-Ex-Starbucks CEO Howard Schultz told CBS’s 60 Minutes yesterday he’s “seriously thinking” about running for president of the United States.
-From late Friday: looks like a few of the partners who held stakes in the passenger terminal at Toronto’s island airport have cashed out. Details here.
NOTABLE RELEASES/EVENTS
-Notable earnings: Caterpillar
-9:15 a.m. ET: Prime Minister Justin Trudeau delivers remarks at Federation of Canadian Municipalities’ Big City Mayors’ caucus in Ottawa
-9:45 a.m. ET: Ontario Premier Doug Ford delivers remarks at Rural Ontario Municipal Association Conference in Toronto
-10:00 a.m. ET: U.S. Congressional Budget Office releases updated economic and budget projections
-House of Commons resumes sitting
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.
