First Look With Surveillance: Powell Stays, Oil Slides
Seems like just yesterday we were marvelling about oil being at seven-year highs as OPEC+ defied calls to ramp up output more aggressively. Now, West Texas Intermediate is nearing correction territory as it slumps a little more than nine per cent from its recent high on Oct. 26 as traders brace for a coordinated release from strategic petroleum reserves. And that release landed early this morning, as U.S. President Joe Biden announced the release of 50 million barrels from the Strategic Petroleum Reserve. Biden added that America’s release will happen “in parallel” with moves by China, Japan, India, Korea, and the United Kingdom. All of this begs the question of how OPEC+ will respond – and what it all means for the energy subgroup that’s been the TSX’s star performer this year.
LAURENTIAN BANK KITCHEN SINK
Chief Executive Rania Llewellyn is getting the kitchen sink out of the way before her company reports full quarterly results. Laurentian warned this morning that its fiscal fourth-quarter earnings will be cut by $163 million (after-tax) as a result of findings from a strategic review. The biggest drivers are $93 million in impairment charges due to struggles in the core personal banking business, and a $49-million charge as Laurentian decides to adopt a hybrid work model.
IN CONVERSATION WITH MIKE ROSE
Is there a more widely loved Canadian chief executive? Mike Rose, who is seemingly praised on a daily basis by BNN Bloomberg guests for his stewardship of Tourmaline Oil, joins Commodities this morning. Most recently, Tourmaline reported record quarterly cash flow and hinted at more special dividends in the offing. Don’t miss Rose in conversation with Andy at 11:20 a.m. – great day to have him, in light of the aforementioned backdrop.
B.C. SUPPLY CHAIN RELIEF
While British Columbia’s transportation and infrastructure minister has warned that it could take months for some road infrastructure to be rebuilt, there’s a bit of good news coming today as Canadian Pacific Railway prepares to resume service between Kamloops and Vancouver. “As we move from response to recovery to full service resumption, our focus will be on working with customers to get the supply chain back in sync,” CP CEO Keith Creel said yesterday afternoon. And this morning, Canadian National Rail said it too expects to resume Kamloop-Vancouver service “to limited traffic” tomorrow. We’ll address the importance of that rail link, and balance any optimism against the risk of additional supply chain setbacks. To wit, Parkland Corp. announced it is suspending processing operations at its Burnaby refinery due to the shut down of the Trans Mountain pipeline.
ROGERS-SHAW HEARING, DAY TWO
The main competition is also the main attraction in today’s second round of presentations at the Canadian Radio-television and Telecommunications Commission’s hearing into Rogers’ proposed $20-billion takeover of Shaw. Telus Communications is on the agenda today after a senior Rogers official yesterday stated a combined Rogers-Shaw would provide competition in rural B.C. and Alberta where “consumers do not have a competitive option to Telus.”
OTHER NOTABLE STORIES
- Zoom Video Communications raised its full-year revenue forecast and beat expectations on most major metrics in the third quarter. But its growth is slowing and that doesn’t appear to be sitting well with investors as Zoom shares come under pressure in pre-market trading.
- Lundin Mining shares slumped in European trading after the company released 2022 forecasts late yesterday, including an estimate for $630 million in capital spending, compared to $575 million this year, as well as lower gold and nickel production expectations.
- Organigram’s 22 per cent surge in fiscal fourth-quarter revenue outpaced expectations, and the Moncton, N.B.-based pot producer is forecasting sequential growth in the current quarter as its market share grows. Chief Executive Officer Beena Goldenberg joins us at 10:40 a.m.
- Notable data: Canadian manufacturing sales flash estimate
- Notable earnings: Alimentation Couche-Tard, George Weston, Organigram, Nordstrom, Gap, Best Buy, Dollar Tree, Dell Technologies
- 8:00: Lightspeed holds capital markets day in New York
- 9:30: Canadian Association of Energy Contractors hosts state of the industry event in Calgary, includes release of 2022 drilling forecast
- 11:00: CRTC’s Rogers-Shaw hearing resumes
- 11:00: Conservative Party of Canada Finance Critic Pierre Poilievre holds media avail to discuss inflation and Speech from the Throne
- 14:00: U.S. President Joe Biden delivers remarks on the economy “and lowering prices for the American people”
- 13:00: Bank of Canada Deputy Governor Paul Beaudry delivers speech "Assessment of risks to the stability of the Canadian financial system" to OSC Dialogue conference
- 13:00: Governor General Mary Simon delivers Speech from the Throne
- Newfoundland and Labrador Provincial Court hearing regarding charges against Husky over 2018 spill