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Noah Zivitz

Managing Editor, BNN Bloomberg

|Archive

Big Tech is delivering another blowout quarter. But sometimes jaw-dropping growth and estimate-crushing headline numbers aren’t enough to satisfy investors.

Let’s start at home, where Shopify’s second-quarter profit more than doubled the average analyst estimate while revenue surged 57 per cent. The e-commerce platform provider also raised its view on full-year adjusted operating profit. Nonetheless, its shares are flat in pre-market trading.

It’s a similar theme south of the border, where Apple and Microsoft shares aren’t doing much of anything at this hour despite remarkable revenue growth in their latest quarters as investors find ways to poke holes in the performance and outlook. Alphabet is the exception. It’s being rewarded for a clean beat in a quarter that was powered by a boom in advertising revenue (to the tune of US$50.4 billion). “Wow! That’s a huge number,” was Synovus Senior Portfolio Manager Dan Morgan’s immediate reaction when Andy informed him of the ad haul yesterday afternoon.

IS THIS WHAT TRANSITORY LOOKS LIKE?

Inflation eased in Canada last month. The consumer price index rose 0.3 per cent in June, compared to 0.5 per cent in May. Looks like gasoline was the most powerful inflationary factor, with prices up 1.6 per cent. Meanwhile, clothing and footwear prices sank almost two per cent. This is the first CPI since StatsCan adjusted weightings to (in its mind) better reflect Canadians' spending habits. Problem is, it's based on last year's expenditures, and thus capture the most anomalous year in recent history. As CIBC Senior Economist Royce Mendes told us on Monday: "Unfortunately this is sort of like the opposite of that Wayne Gretzky saying which is, you know, skate to where the puck is going. This is sort of a case of, skating to where the puck has been." 

FED DAY

The U.S. Federal Reserve releases an interest rate decision this afternoon, to be followed by Chair Jerome Powell’s Q&A with reporters. No doubt the hot topic will be the COVID Delta variant’s impact on growth, and the consequence for the central bank’s timeline to taper its quantitate easing program. We’ll have in-depth reaction from the likes of BMO Global Asset Management Head of Fixed Income Earl Davis and former Dallas Fed Advisor Danielle DiMartino Booth.

INTER PIPELINE’S BOARD BLESSES BROOKFIELD OFFER

The pipeline operator announced last night that its board is formally recommending its shareholders accept the cash-and-stock takeover offer from Brookfield Infrastructure Partners L.P. This is no surprise, coming a few days after Inter Pipeline scrapped its friendly deal with Pembina Pipeline. Inter Pipe is stopping short though of formally supporting the Brookfield offer, saying no such friendly arrangement was requested by Brookfield.

IN CONVERSATION WITH ETHEREUM FOUNDER

We've got Anthony Di Iorio, who recently made headlines with his decision to quit the crypto world, on The Open this morning. We'll learn more about what's pushing the Canadian co-founder of Ethereum out of the space, and what he plans to do next, at 8:40 a.m.

STOCKS STEADY IN CHINA

After a two-day rout, the Hang Sang and Shanghai Composite Index found their footing overnight. We’ll get some unique perspective on the fallout from the regulatory clampdown when legendary investor Jim Rogers joins The Open shortly after 10 a.m. If you missed it, check out why another big name – Mark Mobius – isn’t sweating Beijing’s moves.

OTHER NOTABLE STORIES

  • Loblaw is boosting its dividend nine per cent to $0.365 per share after reporting second-quarter adjusted profit that beat the average estimate by a wide margin. Its Shoppers Drug Mart business was the growth driver, with same-store sales in that unit surging almost 10 per cent.
  • After getting thumped yesterday, Tilray shares have been moving higher in pre-market trading after the pot producer posted positive adjusted EBITDA for its fiscal fourth quarter.
  • CBC News is reporting the federal government is negotiating to acquire an equity stake in the long-delayed and over-budget Muskrat Falls hydroelectric project in Newfoundland and Labrador. An announcement is possible today, when the prime minister is visiting the province.

NOTABLE RELEASES/EVENTS

  • Notable data: Canadian CPI
  • Notable earnings: Shopify, Suncor, CP Rail, Loblaw, CGI, Tilray, GFL Environmental, Equitable Group, West Fraser Timber, Kinross, Agnico Eagle, Cameco, Crescent Point Energy, Tourmaline Oil, Real Matters, Facebook, Qualcomm, Boeing, Ford, Pfizer, McDonald's
  • 11:00: Prime Minister Justin Trudeau delivers remarks to the media in St. John’s alongside Newfoundland and Labrador Premier Andrew Furey
  • 12:00: Deputy Prime Minister and Finance Minister Chrystia Freeland makes housing affordability announcement in Vancouver (plus avail)
  • 13:15: Prime Minister Justin Trudeau makes announcement at College of the North Atlantic in St. John’s (plus avail)
  • 14:00: U.S. Federal Reserve releases interest rate decision (plus 14:30 news conference)
  • 14:00: U.S. President Joe Biden delivers remarks in Lower Macungie Township, PA on American manufacturing and importance of buying products made in America