The Big Three: Oil under pressure; no sell ratings on Bombardier; Keystone XL dealt another blow
Whether you look at Canadian heavy oil, the North American benchmark, or the global gauge — there’s no escaping oil is under pressure. Let’s start with West Texas Intermediate, which is in a bear market amid 10 straight losing sessions. And this morning it fell below US$60/barrel for the first time since March. Brent oil, meanwhile, fell below US$70/barrel today. And beat-up Western Canada Select was last seen at US$17.67/barrel. This morning we’ll address what’s driving crude and revisit those whispers of US$100 oil that were swirling not too long ago.
ANOTHER KEYSTONE XL SETBACK
TransCanada’s controversial pipeline hit another hurdle yesterday — this time in Montana, where judge Brian Morris ordered a halt to work on KXL to allow more time for the U.S. State Department to assess the pipeline’s environmental impact. See the full decision here. Should be pointed out this isn’t coming out of left field. TransCanada’s latest quarterly report included a detailed rundown of all the legal wild cards.
IN CONVERSATION WITH CANADIAN CAPITAL MARKET POWER PLAYERS
We’re looking forward to getting perspective on market sentiment from two heavy hitters this morning on The Open. TMX Group CEO Lou Eccleston joins Jon at 9:45 a.m. ET on the back of a third quarter showing double-digit revenue and profit growth at the exchange operator (have to point out both metrics missed estimates). And GMP Capital CEO Harris Fricker is on at 9:10 a.m. ET, fresh off reporting a 72-per-cent surge in revenue and a reinstated dividend (with a special payout to boot). Cannabis will be a common denominator in those conversations.
OUR FIRST CHAT WITH MICHAEL MEDLINE
Paul nabbed our first interview with Medline since he took the helm at Empire Company, the parent of Sobeys. Watch for that interview at 7:30 a.m. ET to hear what Medline has to say about cannabis, the recent Farm Boy takeover and lessons learned from the company’s infamous Safeway purchase.
Still plenty to be said about the Montreal-based transportation company’s latest step back from grace. The stock closed 24.45 per cent lower yesterday, for the biggest single-day drop since January 2015. The slow burn was best contextualized when Amanda called for a 10-year graph yesterday on Bloomberg Markets to illustrate the point, only to immediately notice we actually have to go back 20 years to really capture the magnitude of the narrative. Of the 23 analysts who cover the stock, 22 have a buy recommendation (Cormark joined the crowd this morning, citing valuation), with just one analyst saying it’s a hold. We’ll chase the case for buying Bombardier — and stress test it.
COURT WEIGHS IN ON NATIONAL SECURITIES REGULATOR
Many years ago, Howard Green told me softwood and Canada’s dance with a national securities regulator are the two Canadian business files that won’t ever go away. Today, the country’s top court weighed in on Quebec’s multi-year battle with the feds over the constitutionality of the Cooperative Capital Markets Regulatory System. And the SCC has ruled Ottawa is within its constitutional right to go ahead with a single (opt-in) regulator.
OTHER NOTABLE STORIES
-The U.S. Federal Reserve’s ongoing mantra of “further gradual” rate increases will be a market driver today. The U.S. dollar is trading higher against every major counterpart other than the yen this morning.
-Once the dust settled, Freshii closed yesterday at the lowest level ($2.63) since going public in January 2017, with trading volume near an all-time high for FRII. We’ll continue to seek a request with CEO Matthew Corrin.
-Newstrike notched a milestone in its latest quarterly report by posting some revenue ($3.4 million). Even so, The Tragically Hip-backed pot producer still suffered an $8.15-million net loss in the third quarter.
-Bloomberg is reporting BHP has signed some non-binding contracts for potash deliveries from its Jansen mine in Saskatchewan.
-Notable earnings: Onex, GMP Capital
-Notable data: University of Michigan consumer sentiment index
-10:00 a.m. ET: Economic Development Minister Navdeep Bains makes announcement in Gaspé, Quebec.
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.