Market caution warranted at present: Newhaven Asset Management's Ryan Bushell
For much of the morning, North American stocks appeared poised to extend their rebound today, making Monday’s washout look increasingly like a blip on the radar. Then the futures flattened out shortly before 8 a.m. While markets flip-flop between fretting the growth outlook and latching onto buoyant corporate earnings, we’ll continue asking investment professionals if there’s any point in betting against powerful acronyms like TINA and FOMO in the investing universe.
IN CONVERSATION WITH CN RAIL’S CEO
We’ve got Jean-Jacques Ruest in Bloomberg Markets to discuss his plan for convincing U.S. regulators to allow CN Rail to buy Kansas City Southern and getting a go-ahead for the contentious voting trust. We’ll of course also address the real-time challenges CN is facing as wild fires threaten to exacerbate supply chain bottlenecks, as well as the quarter that CN reported yesterday afternoon showing a 12 per cent jump in revenue, a near doubling in net income, and a sharply improved operating ratio.
OUTLOOK FOR THE BIG SIX
We’re looking forward to catching up this morning with Veritas Investment Research Analyst Nigel D’Souza, who’s fresh off downgrading four of the country’s largest banks (on valuations) as he looks ahead to the post-pandemic landscape for lenders. We’ll explore his rationale and his view on the prospects for dividend hikes when the Office of the Superintendent of Financial Institutions unshackles the banks.
NETFLIX SUBSCRIBER WOES AT HOME
Lots to sort through in Netflix’s latest quarter. Total paid subscriber additions exceeded expectations at 1.54 million, but that masks the fact Netflix suffered a net loss of 430,000 subscribers in the United States and Canada. The company also talked up the outlook for video games (saying they will initially be added at no extra cost), and dedicated plenty of attention to industry consolidation in the letter to shareholders -- pointing out Netflix “continually evaluates opportunities” but doesn’t see any “must-haves.” Add it all up and NFLX shares are flat in pre-market trading.
OTHER NOTABLE STORIES
- Back to the wild fires (which prompted B.C. to declare a state of emergency yesterday) for a moment: Canfor announced last night it’s curtailing 115 million board feet of production capacity in Canada as a result of “significant supply chain challenges and transportation backlog”.
- Rogers Communications has posted double-digit gains in second-quarter revenue and adjusted profit, with the company’s media division delivering the most impressive growth as revenue surged 84 per cent thanks to the Blue Jays and broader resumption of live sports.
- Great-West Lifeco is acquiring Prudential Financial’s full-service retirement business in what’s being framed as a US$3.55 billion deal. We’re seeking clarification from the company on the actual purchase price. Regardless, Great-West said the purchase to be “highly and immediately” accretive to earnings.
- The Coca-Cola Co. is clearly reaping the reward of economic reopenings, as net revenue surged 42% year-over-year in the latest quarter. CEO James Quincey said that "despite the asynchronous nature of the recovery" his company elected to boost its full-year outlook.
- Notable earnings: Rogers Communications, Choice Properties REIT, Johnson & Johnson, Baker Hughes, CSX, The Coca-Cola Co., Verizon, Texas Instruments
- 9:00: Financial Accountability Office of Ontario releases update on province's 2020-21 spending
- Moderna's first day in the S&P 500