Noah Zivitz

Managing Editor, BNN Bloomberg

Archive

Snap has kicked the legs out from under social media stocks. Take your pick: Twitter has been down almost five per cent, it’s been closer to 10 per cent for Meta, and Pinterest has been down upward of 15 per cent in pre-market trading. All that pales in comparison to the catalyst stock: Snap shares plummeted upward of 30 per cent in the pre-market after that company delivered a second-quarter profit and revenue warning late yesterday, saying “the macroeconomic environment has deteriorated further and faster than anticipated.” One can imagine that’s an indication that advertising dollars are at risk. And so it’s no surprise to see that Alphabet’s shares are also coming under pressure.

MARKET WATCH

Snap’s warning soured market sentiment, with futures pointing to a drop at the start of trading in New York and thus erasing some of yesterday’s gains that were credited to U.S. President Joe Biden’s softer tone on China tariffs. And there’s another telling sign out of the world’s second-largest economy: the People’s Bank of China called on banks to ramp up lending activity in a meeting with 24 major financial institutions today.

BANK EARNINGS EVE

By this time tomorrow, we’ll have one-third of the Big Six earnings season out of the way, with Bank of Nova Scotia and Bank of Montreal scheduled to launch fiscal second-quarter earnings season Wednesday morning. This afternoon, we’ll set the scene with Nigel D’Souza from Veritas Investment Research, who will walk us through the company-specific and macro storylines. He has a buy recommendation on BMO and recently upgraded Scotia to reduce from sell. [NOTE: Veritas’ reduce recommendation = expected to underperform the sector coverage over next 12 months]

IF YOU WERE GOVERNOR FOR A DAY…

It may be an exercise in fantasy, but it’s a useful exercise in gauging Main Street sentiment. The Angus Reid Institute is out with a survey today, showing 45 per of respondents said they would slam the brakes on rate hikes if they were governor of the Bank of Canada. Another 27 per cent said they’d stay the course and continue raising rates to wrestle down inflation. The survey also shows the proportion of respondents who said they’re worse off than a year ago is at the highest since 2010 (36 per cent). We’ll dig into all of this with ARI President Shachi Kurl at 10:30 a.m.

OTHER NOTABLE STORIES

• GFL Environmental reiterated its full-year forecasts ahead of an investor day presentation this morning, where the waste hauler said it will sketch out a number of potential growth scenarios, one of which includes spending US$1 billion per year on acquisitions funded by adjusted free cash flow and its available liquidity.
• Zoom Video Communications raised its full-year profit forecast late yesterday while reporting first-quarter revenue growth that matched expectations. The company’s shares are rising in pre-market trading, but let’s keep in mind they plummeted 51 per cent year-to-date through the close of trading yesterday.
• Best Buy cut its full-year profit and revenue forecasts this morning. Yet its shares have been up about five per cent in pre-market trading. Perhaps that’s investor relief over same-store sales falling less than feared (8.0 per cent versus 9.44 per cent estimate) in the first quarter.
• And then there’s Abercrombie & Fitch. Its shares have been down almost 20 per cent in pre-market trading after the retailer unexpectedly swung to an adjusted loss as costs pressured its margins. The company also cut its full-year sales forecast.
• Bombardier laid claim yesterday to the world’s fastest business jet after unveiling its Global 8000 aircraft, which it said registered supersonic status in a test flight. The plane is scheduled to enter service in 2025.
• If you missed it: proxy advisory service Glass Lewis is recommending that Shopify shareholders vote against the company’s proposal to create a Founder Share for Tobi Lutke, saying the proposal limits shareholder rights and inadequately protects the interests of minority shareholders. Shopify’s annual meeting is scheduled for June 7.
• A PricewaterhouseCoopers global survey of 52,195 workers shows one-fifth or respondents said they’re likely going to switch jobs over the next 12 months. Gen Z respondents (those aged 18-25) were most inclined to make the leap (27 per cent).
• Enthusiast Gaming is definitely a stock to watch today after its top shareholder, Greywood LLC (which says it owns 9.3 per cent of the company’s shares), announced it’s planning to launch a campaign to overhaul the company’s board of directors and replace its chief executive. Greywood stated in a letter to Enthusiast’s board it thinks the company could have a US$5 billion market cap “with proper leadership and focus.” Enthusiast’s Nasdaq-listed stock ended yesterday’s session with a market capitalization of US$280.9 million.

NOTABLE RELEASES/EVENTS

• Notable data: Nanos confidence index, Canadian manufacturing sales (April flash estimate) and wholesale trade (April early indicator); U.S. new home sales
• Notable earnings: Nordstrom, Best Buy
• 500: Manulife Financial CEO Roy Gori participates in Davos panel "Financing Resilient Economies and Societies"
• 800: GFL Environmental investor day presentation
• 930: Microsoft CEO Satya Nadella feature conversation at Davos
• 1130: FTX CEO Sam Bankman-Friend participates in Davos panel "Crypto's Carbon Footprint"
• 1345: Prime Minister Justin Trudeau delivers remarks and holds media avail in Vancouver