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Noah Zivitz

Managing Editor, BNN Bloomberg

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There’s no relief in sight for stranded goods as the disaster in British Columbia exacerbates supply chain problems. The Port of Vancouver is dealing with rail line outages and highway shutdowns. And the government-owned Trans Mountain made it clear that not only is access to the pipeline compromised right now, but even when crews arrive on scene, repair work is waiting for them. We’ll keep chasing insight on the challenges ahead for shippers and consumers.

AIR CANADA CUTS LOOSE FROM GOVERNMENT AID

After lining up almost $6 billion in support from the feds as it navigated the pandemic, Canada’s largest airline is walking away without tapping even half of that amount. Air Canada said today it was exiting the federal support program after having only availed itself of $1.2 billion that was specifically intended to refund tickets that were originally non-refundable.

MARKETS ON EDGE

Major European markets are in the red, futures are pointing to a drop at the start of trading in New York, and crude oil futures have been down more than three per cent amid renewed concern about COVID-19 as some major European nations put lockdowns on the front burner. Austria is shutting things down on Monday and mandating vaccination as of Feb. 1; meanwhile, Germany has raised the prospect of also going into lockdown.

HOW CONSUMERS ARE COPING WITH INFLATION

Retail sales fell 0.6 per cent in September. While that was a sharp downturn compared to August’s 2.1 per cent rise, it was far less severe than the 1.7 per cent estimate. Interestingly, StatsCan said sales fell 1.1 per cent in volume terms – which speaks to the pricing story. As for the outlook, the data agency delivered a flash estimate for a 1.0 per cent uptick in October.

IN CONVERSATION WITH FORMER FED VICE-CHAIR

This one promotes itself. Alan Blinder, who was second in command at the U.S. Federal Reserve from June of 1994 until January of 1996, joins us at 2:30pm for an assessment of the inflation outlook and how the Fed is managing the uncertainty. If you missed it, check out this great piece from our Bloomberg partners on the dangers for investors if they make the wrong call on inflation. 

DEPLOYING THE ENERGY SECTOR’S CASH BONANZA

We’ve seen lots of interest in BMO’s thesis that surging cash flows will lead not just to dividends and buybacks, but possibly also outright buyouts. This morning we’ll find out what Birchcliff Energy’s plans are when CEO Jeff Tonken joins Commodities. In the latest quarter, Birchcliff’s adjusted funds flow nearly tripled to a record $168 million, and the company was pinpointed by BMO’s Randy Ollenberger as being on track for top-of-the-pack surplus cash flow in 2022 and 2023.

OTHER NOTABLE STORIES

  • Canopy Growth announced some changes near the top of its management team this morning. President Rade Kovacevic and Chief Financial Officer Mike Lee are stepping down from their roles immediately and will leave the company at the end of the year. For now, they’ll help with the transition as insiders fill the two jobs on an interim basis while an external search unfolds.
  • Some vaccine-based movers: Shares in Moderna and Pfizer both rallied in pre-market trading after the U.S. Food and Drug and Administration approved them for COVID boosters in adults aged 18+.
  • GFL Environmental came under some pressure in after-hours trading after the Vaughan, Ont.-based trash hauler announced a secondary offering of 12.7 million shares by some of its investors.
  • Applied Materials shares have been falling in pre-market trading as the semiconductor maker suffers through supply chain problems. Profit and revenue in the latest quarter missed estimates, and the outlook for earnings in its fiscal first quarter is light compared to analyst estimates.   
  • Here’s a potential Canadian mover of note, particularly for those with ties to Quebec: Sportscene Group (operator of the Cage chain of sports bars/restos) is going private at $7.25 per share. Its Venture-listed shares closed yesterday at $3.95. The deal is led by the company’s chief executive, who says privatization will allow Sportscene to simplify its operations after dealing with the rigours of navigating the pandemic.
  • Remember when there was some speculation that WestJet might take a run at Transat? That didn’t come to fruition, but clearly there’s a desire to cooperate. The two airlines announced a codeshare agreement this morning for their transatlantic service.

NOTABLE RELEASES/EVENTS

  • Notable data: Canadian retail sales
  • 1000: Federal government officials hold technical briefing on regulatory authorization for Pfizer-BioNTech COVID-19 vaccine
  • 1300: Federal ministers make announcement in Ottawa on border measures and other COVID-19 matters