First Look With Surveillance: Debt Limit, Evergrande
Momentum is still on the market’s side this morning, as futures point to more gains at the start of trading in New York after yesterday’s snap-back session. Fear about the Omicron strain of COVID-19 is moving to the backburner and apparently so is unease about central bank policy. Potentially also contributing to positive sentiment this morning: China’s exports and imports in November rose more than expected to record highs.
COVID sidebar: Quebec City-based Medicago and its partner GlaxoSmithKline this morning announced their COVID-19 vaccine achieved 71 per cent overall efficacy in Phase 3 trials. As such, Medicago said it will “imminently” seek Health Canada’s regulatory approval. Canada has agreed to purchase up to 76 million doses of the vaccine pending authorization.
CIBC CLASS ACTION SETTLEMENT
Some memories from dark days leading up to the financial crisis are being resurfaced after class action specialists Rochon Genova LLP announced last night that a settlement has been reached with Canadian Imperial Bank of Commerce stemming from disclosures made from mid-2007 to early 2008. Under the terms of the settlement (pending court approval) CIBC will pay $125 million to resolve the claims, which relate to disclosures made about the bank’s exposure to U.S. residential mortgage-backed securities.
The second day of our special coverage begins with a look at pain at the pumps. Gasbuddy's head of petroleum analysis joins The Street at 8:30am to discuss the inflationary forces that drivers are encountering as the average national gas price sits almost 40 per cent above year-ago levels. And on the eve of the Bank of Canada’s policy announcement, BNNBloomberg.ca is setting the scene with a roundup of some economists’ expectations for the timing of a rate hike.
GEAR ENERGY HAS A BONE TO PICK WITH LENDERS
While other Canadian oil and gas producers have showered their shareholders with dividend hikes and share buyback announcements in the last couple of weeks (including today from Enbridge – more on that below), one name was conspicuous by its absence from that trend. Gear Energy told investors last month that it was delaying the return of capital because of restrictions imposed by what it called an "unsupportive lender" that will soon be out of the picture, as well as the heat it's feeling from banks going net-zero. Gear's chief executive, Ingram Gillmore, will provide an update on cash flow plans in Commodities at 11:20 a.m.
RECORD CANADIAN EXPORTS
That’s the high level takeaway from this morning’s trade data, showing exports rose 6.4 per cent to a record of $56.2 billion in October. Those gains were powered by the auto sector, as shipments rose 30.8 per cent thanks to an easing of supply chain pressures. Overall, Canada’s trade international trade surplus climbed to $2.1 billion from a downwardly revised $1.4 billion in September.
OTHER NOTABLE STORIES
- Enbridge delivered a ton of news this morning ahead of its investor day presentation. The pipeline operator said it’ll raise its quarterly dividend three per cent to $0.86 per share and will repurchase up to $1.5 billion of its shares. It also announced $1.1 billion in newly-sanctioned projects and set its financial forecasts for next year, including an outlook for up to $15.6 billion in adjusted EBITDA, compared to this year’s range of $13.9 billion to $14.3 billion.
- Dye & Durham’s shares will remain on our radar today after the cloud-based software firm said it expects to post at least $350 million in adjusted EBITDA in fiscal 2023. Analysts tracked by Bloomberg are expecting $311.2 million in EBITDA for that year.
- Intel shares have been up almost 10 per cent in pre-market trading after the company said it’s planning to take its Mobileye self-driving vehicle division public in an initial offering next year. Intel bought Mobileye in 2017 for US$15.3 billion.
- Six thousand bags of Prince Edward Island potatoes are on their way to downtown Ottawa as the province’s potato farmers try to get the word out about the damage being done by a trade dispute with the United States. The potatoes will be handed out in downtown Ottawa tomorrow in a bid to “highlight the reciprocal affection between farmers and their supporters,” according to a media advisory.
- Gibson Energy has set its 2022 capital budget at $150 million compared to this year’s budget of up to $170 million. The oil infrastructure company’s chief financial officer also said in a release after yesterday’s closing bell that Gibson “sees the potential” to return capital to shareholders next year. Gibson currently pays a quarterly dividend of $0.35 per share.
- Advantage Energy also released its 2022 capital budget after yesterday’s closing bell, and set the range at $170 million to $200 million, compared to this year’s forecast for up to $150 million. The company said in a release it’s putting an “escalating emphasis” on boosting revenue from liquids, and it expects to have “significant free cash flow available” as it moves toward eliminating its bank indebtedness in the second half of next year.
- Onex announced this morning it’s buying education software firm Tes Global from Providence Equity Partners. Terms weren’t disclosed. According to the release, 17,000 schools in 117 countries use Tes’ technology.
- Notable data: Canadian trade balance, U.S. trade balance, China trade balance
- 8:30: Dye & Durham management holds conference call to discuss acquisition of Telus’ Financial Solutions Business
- 9:00: Financial Accountability Office of Ontario releases reports on cost of climate change impacts on public infrastructure
- 9:30: Centre for International Governance Innovation hosts virtual conversation with China Ambassador to Canada Cong Peiwu (NOTE: I previously had this in the lookahead for Thursday, it is very much happening today)
- 1000: U.S. President Joe Biden holds secure video call with Russia President Vladimir Putin
- 12:00: CP Rail Chief Financial Officer Nadeem Velani addresses BMO conference
- 14:00: New U.S. Ambassador to Canada David Cohen presents credentials to Governor General Mary Simon in ceremony at Rideau Hall
- Industry Minister François-Philippe Champagne in Detroit for meetings with automotive industry executives