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Noah Zivitz

Managing Editor, BNN Bloomberg

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Prime Minister Justin Trudeau is vowing swift retaliation after U.S. President Donald Trump decided to reimpose import tariffs on some Canadian aluminum. “Canada will impose countermeasures that will include dollar-for-dollar retaliatory tariffs,” he announced in a tweet just a few hours after Trump accused this country’s aluminum industry of flooding the U.S. market and killing U.S. jobs. Former U.S. Ambassador to Canada Bruce Heyman described the move as a “political stunt” when we caught up with him yesterday afternoon. Nonetheless, the levy will take effect on Aug. 16; later this morning we’ll get more details on Canada’s countermeasures when Deputy Prime Minister Chrystia Freeland addresses the media at 11 a.m. ET.

JOBS DAY

Canada’s economy has delivered another big month of job gains: 418,500 positions were added last month, adding to the 1.2 million cumulative gain from May and June. There are some wrinkles, though. First: almost all of the growth in July was part-time work (345,300 positions). And Canada still has a long way to go to recoup the 3 million jobs that were lost in March and April. South of the border, non-farm payrolls expanded by 1.8 million positions, which was roughly in line with estimates but a sharp deceleration from June’s gains. The backdrop for those U.S. numbers is highly political, as stimulus talks appear to be deadlocked on Capitol Hill, with high stakes for Americans who have been relying on US$600/week unemployment cheques.

TRUMP BROADENS TECH BATTLE WITH CHINA

In addition to inflaming tension with Canada, U.S. President Trump also ramped up pressure on China overnight with a pair of executive orders that aim to ban Americans from doing “any transaction” with TikTok or WeChat, citing a “national emergency” involving the user-data collected by the platforms. Shares of WeChat owner Tencent fell as much as 10 per cent in Hong Kong.

COVID-19 BURNS AUTO INDUSTRY

Magna International swung to a second-quarter loss and its sales plunged 58 per cent year-over-year as global vehicle production plunged at rates that the company says “far exceeded” the worst of what it witnessed during the financial crisis. Indeed, Magna says COVID-19 deprived it of US$5.5 billion in sales and lopped US$1.2 billion off adjusted earnings before interest and taxes. The company has reinstated a full-year forecast, including a sales range that largely misses the average analyst estimate. It’s a similar story for Linamar, whose sales were more than halved in the second quarter amid significant declines in its two divisions. Even with the cost reduction and cash conservations strategies touted in the release, Linamar still swung to a loss in the quarter (albeit not a severe as analysts anticipated).

OTHER NOTABLE STORIES

-Interesting tidbit in Indigo Books & Music's quarterly release. It says it secured a $25-million interest-free revolving credit facility from an entity controlled by Gerry Schwartz, the retailer's controlling shareholder (and husband of CEO Heather Reisman). As for results, Indigo says its online revenue jumped 214 per cent in its first quarter, while total revenue fell due to store closures, and its net loss widened.

-Uber Technologies shares are slumping in early trading after delivering a quarter that illustrated the impact of COVID-19: gross bookings tumbled 35 per cent, revenue fell 29 per cent, and its net loss widened to US$5.2 billion.

-Open Text shares are rising in Nasdaq pre-market trading after the company posted 11 per cent growth in revenue and adjusted earnings per share in the fourth quarter. We'll explore the Canadian tech firm's results and outlook with CEO Mark Barrenechea at 10:15 a.m. ET.

-Recipe Unlimited – whose restaurant brands include Swiss Chalet, Harvey and The Keg – has reported a 55 per cent plunge in second-quarter sales and a 70 per cent drop in adjusted profit per share. In a sign of shifting consumer habits as a result of COVID-19, the company says takeout and delivery orders jumped almost 43 per cent.

-Sleep Country Canada’s second-quarter revenue sank 31 per cent, again because of COVID-related store closures. The mattress seller says that was partly offset by “explosive triple-digit” growth in online activity. Despite the sales erosion, Sleep Country unexpectedly posted an adjusted profit.

NOTABLE RELEASES/EVENTS

-Notable data: Canadian labour force survey, U.S. non-farm payrolls, China trade balance

-Notable earnings: Magna International, Power Corp., Chartwell Retirement Residence, Brookfield Renewable Partners, Cargojet

-10:00 a.m. ET: Ontario Premier Doug Ford holds daily briefing and avail in Toronto 

-11:00 a.m. ET: Deputy Prime Minister Chrystia Freeland delivers remarks and holds media avail in Toronto

-11:00 a.m. ET: Alberta Premier announces on changes to Temporary Foreign Worker Program

-12:00 p.m. ET: Caisse de dépôt et placement du Québec releases mid-year results

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.