The Big Three: Macro woes; Canadian jobs; Uber earnings miss
Where does it end for CannTrust Holdings? Way too early to tell, but yet another setback suffered today after its auditor (KPMG) pulled recent reports, citing “newly uncovered information” by the special committee that’s looking into an unlicensed production scandal that has overwhelmed the company since first coming to light on July 8. Interim CEO Robert Marcovitch says his team will “take whatever steps are necessary to restore full trust” in the company. What’s it going to take? And does it matter so long as uncertainty about potential Health Canada enforcement is hanging over CannTrust? We’ll address those issues today.
It’s shaping up to be a choppy end to the week, with futures pointing to a weak open in New York while European markets are firmly in the red. Take your pick of reasons: Political chaos in Italy, a surprise economic contraction in the U.K., persistent China-U.S. tension as D.C. postpones licensing for companies wanting to do business with Huawei. Or maybe just a natural denouement for what’s been a wild week. We’ll continue gauging sentiment. If you missed it, check out David Rosenberg’s cautionary guidance for investors yesterday on Bloomberg Markets.
Canada's labour market unexpectedly she more than 24,000 jobs last month, defying Bay Street's expectations and sending a worrying signal for the country's economy. All of July's weakness was accounted for in the private sector, where almost 70,000 positions were cut. But it wasn't a universally negative month, as wage growth picked up and the construction sector went on a hiring spree.
Interesting mix of companies overnight and today. Among them:
-Linamar is looking like a case study in industrial fallout from the global tension we discuss every day. Sales and profit fell in the second quarter, missing estimates in the process, with the company pointing to “trade issues” hurting agricultural sector demand for its products. Meanwhile, its flagship transportation business was hurt by auto market weakness. We’ll go around the world with CEO Linda Hasenfratz at 8:45 a.m. ET.
-Sleep Country Canada narrowly beat profit and revenue estimates in the second quarter, with CEO Dave Friesema touting the mattress retailer’s partnerships with Walmart and Urban Barn. We’ll speak with Friesema at 2:15 p.m. ET.
OTHER NOTABLE STORIES
-Restaurant Brands International is on our radar today after the fast-food conglomerate said an affiliate of 3G is planning to selling 24,000,000 shares (upsized from 20m originally) via Morgan Stanley. Our Bloomberg partners are reporting those shares are being offered at US$73.50-US$75.50. RBI’s NYSE listing closed yesterday at US$76.57. So not a surprise to see the stock under pressure in early trading.
-Uber Technologies shares are sliding in pre-market trading after the company’s second-quarter revenue growth underwhelmed, while its loss ballooned to more than US$5 billion.
-Holloway Lodging could be another stock to watch after agreeing to an all-stock takeover by Clarke Inc. valued at $132 million.
-Notable earnings: Hydro One, TransAlta, Alcanna, GMP Capital
-Notable data: Canadian labour force survey, Canadian building permits, Canadian housing starts, China CPI, U.K. GDP
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.