Noah Zivitz

Managing Editor, BNN Bloomberg

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Canada’s largest securities regulator has opened an investigation into CannTrust Holdings, in a sign the pot producer’s unlicensed production scandal could result in punishing consequences beyond Health Canada’s enforcement powers. The Ontario Securities Commission isn’t providing any details on precisely who or what is the focus of the probe. So all we know is that it involves “matters and parties” related to the company, and that it’s being handled by the Joint Serious Offences Team of the OSC’s enforcement branch. JSOT is a partnership between the OSC, RCMP and Ontario Provincial Police that “investigates and prosecutes serious violations of the law using provisions of the Securities Act and Criminal Code,” according to background on the OSC’s site. We’ll dig for more details.

…APHRIA ON THE OTHER HAND…

Not that long ago, Aphria was in the headlines for all the wrong reasons. Different story today, with the Canadian cannabis producer’s stock surging after swinging to a fiscal fourth-quarter profit as revenue soared 969 per cent year-over-year. In an interview on The Open this morning, Aphria Chairman and Interim CEO Irwin Simon hinted at interest in some of CannTrust’s “great” assets and said he thinks Health Canada will “figure out what to do” with that company.

TRUMP VS CHINA

The self-professed Tariff Man was back at it yesterday, threatening 10-per-cent levies on US$300 billion worth of Chinese exports. Beijing retaliated (verbally) overnight, vowing “necessary countermeasures” if U.S. President Donald Trump makes good on his plan as of Sept. 1. And he gave no sign of relenting at a rally last night, saying the U.S. “will be taxing the hell out of China” until there’s a deal in place. U.S. futures are pointing to a muted open after stocks spiralled lower yesterday afternoon.

ANOTHER CANADIAN EARNINGS BARRAGE

Lots to sift through again this morning. Among them:

- Restaurant Brands International beat second-quarter profit estimates, with its Burger King business leading the way. Tim Hortons, meanwhile, posted marginal same-store sales growth (0.5%).

- Telus’s second-quarter EBITDA and revenue were in line with estimates as the company added 82,000 wireless subscribers.

- Enbridge exceeded even the loftiest analyst profit estimate in the second quarter; CEO Al Monaco says he’s “awaiting further guidance” on next steps for Line 3 in Minnesota and is vowing to move carefully in restarting the Kentucky pipeline at the root of a fatal blast yesterday.  

- Imperial Oil’s second-quarter profit rose more than 1,000 per cent (not a typo), with the company pointing to a $662-million benefit from Alberta’s corporate tax changes, while quarterly production topped 400,000 boe/day. We have CEO Rich Kruger in The Real Economy.

OTHER NOTABLE STORIES

- Canada's trade surplus narrowed to $136 million in June from $556 million in May. Exports and imports were both down in the month, but outbound shipments fell at a faster rate amid broad-based weakness.

- HBC’s special committee of directors has deemed the privatization bid led by Executive Chairman Richard Baker to be “inadequate,” according to an update released this morning. Baker, meanwhile, urged the retailer’s special committee yesterday to complete its evaluation of strategic alternatives without allowing Catalyst Capital to “usurp its role” by scooping up shares. Reminder: Catalyst is aiming to buy almost 15 million HBC shares for $10.11 apiece. The Baker-led privatization offer is $9.45 a share. See his full letter here.

- The NBA Champion Toronto Raptors get less than two seconds of face time in the trailer for the NBA 2K20 video game. And that screen time shows Norman Powell being dunked on by Kawhi Leonard in a Clippers jersey. Begs the question: why no respect for the champs?

NOTABLE RELEASES/EVENTS

- Notable earnings: Enbridge, Imperial Oil, Telus, Restaurant Brands International, RioCan, Fortis, Power Corp., Dorel Industries, Exxon Mobil, Chevron

- Notable data: Canadian trade balance, U.S. non-farm payrolls, U.S. trade balance

- 8 a.m. ET: Foreign Affairs Minister Chrystia Freeland holds media call from ASEAN meeting in Bangkok

- 1:45 p.m. ET: U.S. President Donald Trump makes announcement on EU trade at White House

- Statistics Canada releases report "Impact of recent tariffs on Canada's merchandise trade"

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.