Noah Zivitz

Managing Editor, BNN Bloomberg

Archive

We’re still about a month away from the next earnings season, but FedEx set a nasty tone after the markets closed yesterday. The parcel shipper yanked its full-year forecast and warned on the quarter that it’s scheduled to report next week (as well as fiscal Q2) after activity spiraled “as macroeconomic trends significantly worsened later in the quarter (which ended Aug. 31),” according to its chief executive. The company’s shares are getting thrashed in pre-market trading and this is surely one of the reasons for the broadly sour mood across U.S. futures contracts. While there was no mention of outright job cuts in the release, FedEx did state it’s deferring some hirings and closing 95 offices and service locations as part of its plan to reduce costs.

Another bellwether is adding to the sour sentiment this morning after General Electric’s chief financial officer flagged persistent supply-chain challenges. GE shares have been down about five per cent in pre-market trading.

IT’S ALL ABOUT THE U.S. DOLLAR

The Canadian dollar is extending the losses that saw it slip to the lowest level since November 2020 yesterday. But this isn’t really about loonie weakness. We’re at the mercy of the U.S. dollar, which is again rallying against almost every major global currency this morning, and has put the DXY (ie, the dollar index) within about half a point of the all-time high it registered earlier this month. Let’s keep in mind what Bank of Canada Senior Deputy Governor said during a Q&A last week (IE, “It would be nice” for the loonie to be trading higher, to serve as a “buffer” against inflation.)

WHITE HOUSE FLESHES OUT VIEW ON CRYPTO

While it basically amounts to jawboning for now, we’re getting a better sense this morning of what could be ahead for crypto in the United States. The White House released a bullet-point summary of a framework that could be in store for the nascent industry. Among the measures, regulators including the Securities and Exchange Commission and Commodity Futures Trading Commission are being urged to “aggressively pursue investigations and enforcement actions against unlawful practices in the digital assets space.” As well, the U.S. Federal Reserve is being encouraged to accelerate its work on a potential central bank digital currency. Perhaps we’ll fold this into our conversation with ex-Atlanta Fed President Dennis Lockhart shortly after 3 p.m. EDT.       

OTHER NOTABLE STORIES

• China’s overnight data dump surprised to the upside. Industrial production, retail sales and fixed-asset investment all accelerated and rose more than expected. The retail number looks particularly impressive, as the 5.4 per cent year-over-year jump in August doubled July’s reading.
• Pentwater Capital Management is buying itself more clout for its fight against Rio Tinto’s planned takeover of Turquoise Hill Resources. Pentwater said last night it scooped up an additional 2.5 million Turquoise Hill shares, and has a total stake of 13.77 per cent.
• Shawcor, which recently announced a strategic review that could see it back away from its energy-services work, announced a buyback this morning that could see it repurchase up to 10 per cent of its common shares.
• New Gold attracted a positive review from an analyst at National Bank of Canada Financial Markets (NBF) after the miner said it produced 41,000 gold equivalent ounces in July and August at its Rainy River mine that was flooded earlier this year. It also said production has started at the underground Intrepid zone. Mike Parkin at NBF said he expects New Gold shares will outperform peers today.
• Iamgold has replaced its chief financial officer. No reason was given for Daniella Dimitrov’s departure — she was simply thanked and wished well in the news release. The company’s finance vice-president will serve as interim CFO.
• The Canadian Union of Postal Workers said it filed a formal complaint against Uber before the Ontario Labour Board. This appears to stem from The Globe and Mail’s recent reporting on the ride-hailing company’s arrangement with the United Food and Commercial Workers union.

• Foreign investors piled back into Canada in July. Statistics Canada data show $14.8 billion of securities were acquired by foreigners in that month. That’s a big swing compared to the $17.6-billion in divestments in June. Foreign investors were attracted mostly to debt instruments; StatsCan highlighted the appeal of U.S. dollar-denominated issuances by Canadian banks.

• Dye & Durham will be a stock to watch today, and this time it has nothing to do with the Link takeover. The Toronto-based software consolidator released preliminary fiscal fourth-quarter revenue that looks light compared to the average analyst estimate. Its outlook for Q4 adjusted earnings before interest, taxes, depreciation, and amortization is roughly in line. Same story for the full-year forecasts that were also released this morning.

NOTABLE RELEASES/EVENTS

• Notable data: Canadian housing starts, international securities transactions, and wholesale trade; University of Michigan U.S. consumer sentiment index; China retail sales, industrial production, and fixed-asset investment