McCreath: U.S. PPI data encouraging sign for bonds
U.S. Federal Reserve Chair Jerome Powell’s optimism about the outlook for the world’s largest economy was evident in his appearance on CBS’s 60 Minutes last night. “We feel like we're at a place where the economy's about to start growing much more quickly and job creation coming in much more quickly,” he said, while acknowledging that COVID still represents the biggest risk. Powell covered plenty of ground in the interview, including remarks about the painfully uneven recovery from the pandemic (as he witnesses every day in the tent city near Fed HQ in D.C.); he also said his team is “looking very carefully” at how Archegos managed to spread so much pain at some of the world’s largest banks.
UPDATE ON CANADIAN C-SUITE SENTIMENT
We’ll see how the cheery outlook for America’s economy factors into the mood of this country’s top corporate decision makers when the Bank of Canada releases its quarterly business outlook survey this morning. The standard question about investment intentions could be particularly newsworthy ahead of next week’s federal budget, when one of the big questions will be how Finance Minister Chrystia Freeland plans to incentivize businesses to deploy their cash hoards. The Open will have instant analysis at 10:30 a.m. with TD Securities Chief Canada Strategist Andrew Kelvin.
BMO ASSET MANAGEMENT DEAL
Bank of Montreal announced an agreement this morning to sell its EMEA asset management operations to Ameriprise Financial for almost $1.1 billion. The transaction comes almost half a year after our Bloomberg News partners reported BMO was considering options for the division.
OTHER NOTABLE STORIES
- Aphria’s adjusted EBITDA was steady in the latest quarter, at $12.7 million despite CEO Irwin Simon saying the impact of COVID lockdowns was “greater than we initially anticipated”. David George-Cosh will dig into all the details that matter.
- RioCan and HBC announced this morning a plan to overhaul the retailer’s flagship Montreal store. The re-design includes plans for a 25-storey office tower.
- Another chapter was written this weekend in Jack Ma's clash with China, after one of the country’s regulators hit Alibaba with a record antitrust fine. Nonetheless, shares have been up as much as 8.99 per cent in Hong Kong.
- We’ll watch shares of MTY Food Group again today. Last week, quarterly results were the catalyst. Today, it’s word that Founder/President/Chairman Stanley Ma is planning to sell up to 880,000 shares in the food-court giant. If all of those shares are divested, it will cut his stake to 16.2 per cent from 19.8 per cent.
- Microsoft confirmed this morning that it has reached a deal to buy health-care artificial intelligence leader Nuance Communications, whose shares surged more than 20 per cent in pre-market trading amid speculation that an announcement was imminent. Microsoft’s offer of $56 per share is a 23 per cent premium to Nuance’s closing price on Friday; total deal value, including assumed debt, is $19.7 billion.
- Uber Technologies shares are inching higher in pre-market trading. The company disclosed today in a filing that it logged record gross bookings in March.
- From late Friday: Cameco announced it will restart its Cigar Lake operations this month after suspending work in December due to COVID-19.
- Rayonier Advanced Materials is selling its lumber and newsprint operations in Ontario and Quebec to GreenFirst Forest Productions for US$214 million. Paul Rivett – best known as a former senior leader at Fairfax Financial, and now a Torstar owner – is GreenFirst’s incoming chairman
- Tamarack Valley Energy is buying privately-owned light-oil producer Anegada Oil for $494 million in cash and stock. The deal adds almost about 12,000 barrels of oil equivalent in daily production.
- Notable earnings: Aphria
- 10:30 a.m.: Bank of Canada releases Business Outlook Survey
- 1030: Diversity and Inclusion and Youth Minister Bardish Chagger announces federal support for COVID-19 rapid screening program
- 11:45 a.m.: Prime Minister Justin Trudeau speaks with Conservative Party Leader Erin O’Toole about the budget
- 12 p.m.: White House holds summit on global semiconductor shortage
- 3:15 p.m.: Trudeau speaks with Bloc Québecois Leader Yves-François Blanchet about the budget