Jan 28, 2021
The Daily Chase: Reddit rally continues; Big Tech sounds cautious note
By Noah Zivitz
GameStop is still grabbing the world’s attention and the situation can turn on a dime. Its shares – along with others that have ve been swept up in the Reddit frenzy – were initially under pressure in pre-market trading this morning; then, all of a sudden, they were up more than 20 per cent. . As that was playing out, Jon Erlichman had a can’t-miss interview with the originator of the playground where all the hysteria is playing out. WallStreetBets Founder Jaime Rogozinski explained why fundamentals don’t even matter for the subreddit’s users. Check it out here if you missed it live.
We’ll keep chasing strong voices on the stakes for market mechanics, including with veteran U.S. investor Tom Marsico at 10:10 a.m. If you missed it, please check out this interview with Oppenheimer & Co. Global Head of Trading Doron Barness, who shared candid institutional perspective on this real-time feud between Main and Wall Street.
COVID WEIGHS ON ROGERS
The pandemic’s impact is evident in the fourth-quarter results released by Rogers Communications this morning. Its flagship wireless business saw service revenue fall 8 per cent as subscribers did less roaming and stayed within their data limits. Its media division’s revenue tumbled 23 per cent due to delays in the NHL and NBA seasons, as well as overall advertising weakness. All that being said, profit narrowly exceeded expectations.
CAUTION FROM BIG TECH
Apple's revenue soared 21 per cent in its fiscal first quarter, hitting an all-time high of US$111.4 billion. Yet, shares are slipping in pre-market trading. Perhaps that can be attributed to the lack of precise financial forecasts and a cautious tone from management on the conference call with analysts. It’s a similar story at Facebook, whose CFO warned of “significant uncertainty” ahead after the social networking behemoth posted a 33 per cent surge in fourth-quarter revenue.
OTHER NOTABLE STORIES
- Canadian Pacific Railway is forecasting double-digit adjusted profit growth this year after closing 2020 with a marginal fourth-quarter profit beat and a sharply improved operating ratio of 53.9 per cent. Similar to CN, Canadian Pacific's grain business propelled revenue in the latest quarter while the energy, chemicals and plastics group struggled (down 25 per cent).
- Cenovus Energy is forecasting as much as $2.7 billion in capital spending this year as it aims for daily production of up to 780,000 barrels of oil equivalent.
- Tesla shares are sliding in early trading after Elon Musk's vehicle maker missed profit expectations even as adjusted fourth-quarter earnings per share nearly doubled on a 46 per cent surge in revenue.
- Lowe’s Canada is going on a spring hiring spree, announcing this morning plans to land 7,000 full- and part-time positions.
- Savaria Corp. could be a stock to watch on the TSX after the home elevator and wheelchair lift maker announced a friendly arrangement to buy rival Handicare Group for $452 million.
BELL LET’S TALK
Today’s the day that Bell puts the spotlight on mental health, in what’s now a decade-long public awareness campaign to break a stubborn stigma. BNN Bloomberg (which is owned by Bell Media) is part of the conversation. We’ll discuss the stigma with Walmart Canada’s executive vice-president of people at 10:40 a.m. We’ll also explore the strains of the pandemic for a small business owner, when Fitsquad Co-Owner Jennifer Lau joins The Close. In between those interviews, Bloomberg Markets will focus on the ripple effect for parents and employers as children grow up dealing with COVID.
NOTABLE RELEASES/EVENTS
- Notable data: Canadian building permits, U.S. GDP (Q4), U.S. initial jobless claims, U.S. new home sales
- Notable earnings: Rogers Communications, McDonald's, Mastercard, Visa, United States Steel
- 9 a.m. ET: Parliamentary Budget office releases costing notes on 1) Financial Support for Planting 2 Billion Trees, 2) Corporate Income Tax and International Digitization, 3) Expansion of the Canadian Emergency Business Account
- 10 a.m. ET: Canada Mortgage and Housing Corporation releases rental market survey
- 1 p.m. ET: Infrastructure Minister Catherine McKenna and Canada Infrastructure Bank CEO Ehren Cory make announcement via Facebook
- 1:30 p.m. ET: U.S. President Joe Biden signs health care executive actions
- 2:30 p.m. ET: White House press briefing
- 3:30 p.m. ET: House of Commons Transport Committee hearing on COVID-19’s impact on the aviation sector
- Cenovus Energy releases 2021 budget and production forecasts (plus 11 a.m. conference call)
