OPEC+ Agrees to Boost Production Into 2022
Global stocks and U.S. futures are under pressure today amid continued concern about the COVID-19 Delta variant and its potential impact on global growth. But don’t tell that to U.K. Prime Minister Boris Johnson, who labelled today as Freedom Day for his country as pandemic restrictions are lifted. We’ll have plenty of market insight on the outlook for stocks, including with David Rosenberg shortly after 10am. And domestic reopening issues are on our radar with the likes of Goodlife Fitness President Jane Riddell at 2:40 p.m. and Cowen’s airline analyst, Helane Becker, at 3:15 p.m. Great timing for that discussion: Canadian government officials are delivering an update on border measures early this afternoon.
OPEC+ BREAKS THE IMPASSE
The cartel and its allies finally reached consensus yesterday, announcing a plan for monthly oil output hikes of 400,000 per day, starting next month. They’ve also agreed to extend their cooperation until December 2022. Nevertheless, on a day when the market is being shaken by growth fears, we’ve seen the price of West Texas Intermediate crude dip below US$70 per barrel for the first time in a month – and that’s presumably factoring into the loonie’s plunge today, which at one point was down more than a full cent against the U.S. dollar.
The latest quarterly survey from MNP is looking like a continuation of the narrative we established with RATESDOTCA on Friday, as 20 per cent of respondents who are homeowners said they regret how much debt they took on to acquire their property. Meanwhile, 57 per cent of respondents said they’ve made purchases during the pandemic that they might not have otherwise thanks to cheap money. And that’s not sitting well with CTV Chief Financial Commentator Pattie Lovett-Reid. Check out her analysis at BNNBloomberg.ca.
INTER PIPELINE LATEST
There’s plenty more for the pipeline operator’s shareholders to consider after developments over the weekend. Institutional Shareholder Services told clients that IPL holders “appear to be better off at this time” siding with the hostile approach from Brookfield Infrastructure Partners, “absent materially improved terms” from Pembina Pipeline, which late Friday said it’s standing by the offer that Inter Pipe agreed to.
OTHER NOTABLE STORIES
- Zoom Video Communications is buying cloud-based contact centre business Five9 in an all-stock deal worth US$14.7 billion based on Friday’s closing price. It’s a sign that after a pandemic-based boom in demand for its namesake business, Zoom is betting some of its future on improving the customer service experience for brands across the globe.
- Bill Ackman has switched gears on Universal Music Group. Rather than using his SPAC as the vehicle to pick up a stake in the record label, he’ll instead do so via his hedge fund.
- TSX-listed Tricon Residential said this morning it will contribute US$450 million to a US$1.4 billion joint-venture that’s going to scoop up rental homes in the U.S. Sun Belt. Tricon said the JV’s purchasing power spikes to US$5 billion when leverage is taken into account.
- The U.S. joined allies today in publicly calling out China's cyber tactics, including an allegation that Beijing has used criminal hackers to conduct ransomware, cyber extortion and crypto-jacking. The White House also said it has a "high degree of confidence" that China is responsible for cyber espionage using so-called zero-day vulnerabilities in Microsoft's Exchange Server.
- The book hasn’t closed on last month’s decision by the Joint Review Panel to block Benga Mining’s proposed Grassy Mountain coal project in Alberta. In a release this morning, Benga said it’s launching a legal challenge in the provincial court of appeal. The CEO of Benga said the regulator’s decision was based on “material errors of law and contraventions of procedural fairness.”
- Notable earnings: PrairieSky Royalty, IBM
- 11:30: U.S. President Joe Biden delivers remarks at the White House on economic recovery
- 13:00: Deputy Prime Minister and Finance Minister Chrystia Freeland holds media avail in Mirabel, Que.
- 13:30: Ministers and federal government officials announce updates to border measures (technical briefing at 11:00)
- 14:30: Prime Minister Justin Trudeau leads housing announcement in Brampton, Ont. (plus avail)