The Big Three: CN strike pressures Ottawa; Pot stock mayhem; Tesla Cybertruck
POT STOCKS GO INTO REVERSE
Around this time last week, we were reporting on a miserable stretch for some of the country’s largest licensed cannabis producers as sales disappointed investors, who swiftly sent their shares into the penalty box. Then, the sector attempted to dig itself out of a very deep hole. The Horizons Marijuana Life Sciences ETF surged 20 per cent over a three-day span this week (albeit still down 57 per cent from its March peak). The gains were even more impressive for names like Hexo (+61% per cent), Canopy (+44 per cent), and Aphria (+31 per cent). And sure enough, the pendulum swung the other way at today’s opening bell, with pot stocks topping the list of today’s laggards on the TSX. We’ll continue gathering insight on catalysts ahead.
FROM 'BLOODLETTING' TO REBOUNDING
Around this time last week, we were reporting on a miserable stretch for some of the country’s largest licensed cannabis producers as sales disappointed investors, who swiftly sent their shares into the penalty box. Now, the sector is attempting to dig out of a very deep hole. The Horizons Marijuana Life Sciences ETF has surged 20 per cent in the last three sessions (albeit still down 57 per cent from its March peak). The gains are even more impressive for names like Hexo (+61% per cent), Canopy (+44 per cent), and Aphria (+31 per cent).
SHORT-SELLER OWNS UP TO RISK OF BETTING AGAINST CANADA
Great column today on the Bloomberg terminal by author, newsletter publisher and investment strategist Jared Dillian who’s cautioning others who might be tempted to bet against Canada. “I have been a very vocal short seller of Canada, and I am not ready to declare the trade officially over even though the stock market has reached new highs and the local currency has strengthened. But I do acknowledge the big reason why the trade hasn’t worked out as planned: immigration,” he wrote, adding anyone who’s still convinced Canada should be shorted needs to recognize “this is going to happen on a timeline that is too long for most people to endure.”
BANK EARNINGS LOOM
Bank of Nova Scotia will set the bar for its peers when it reports fiscal fourth-quarter results Tuesday; in a preview note to clients this morning, Credit Suisse Analyst Mike Rizvanovic said he expects the group will post “challenging” Capital Markets results and, for Scotia in particular, he warns of “elevated risk” for a run-up in loan losses. “We believe there is downside risk to [the Big Six banks’] share prices given a challenging operating environment,” he wrote.
COMBINE ACCOUNTS WITH SPOUSE OR NO?
A new Manulife survey reveals there are limits to how much financial information Canadians want to share with their partner. While approximately 90 per cent of respondents indicated they’re comfortable sharing their financial information with their spouse, 21 per cent of respondents don’t combine their finances. CTV's Chief Financial Commentator Pattie Lovett-Reid will address the merits (or not) of combining financial accounts.
OTHER NOTABLE STORIES
-Elon Musk unveiled the latest addition to the Tesla family of vehicles yesterday: a pickup truck that’ll be priced starting at US$39,900 and whose windows unexpectedly shattered in an on-stage demo.
-The Financial Stability Board today added Toronto-Dominion Bank to its list of global systemically-important banks, joining RBC among the 30 institutions deemed too big to fail and required to hold additional capital buffers.
-Nordstrom shares are rallying in pre-market trading after the department store operator boosted the low-end of its full-year profit forecast and easily beat third-quarter profit estimates; and Gap shares are edging higher after the company’s interim CEO talked tough yesterday about needing to “aggressively” execute a turnaround.
-We’ll keep an eye on shares of Knight Therapeutics after it announced a plan late yesterday to cut ties with Medison Biotech.
-Notable data: Canadian retail sales
-Statistics Canada releases Canadian Housing Survey
-11:00 a.m. ET: Prime Minister Justin Trudeau meets with Ontario Premier Doug Ford in Ottawa
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.