Noah Zivitz

Managing Editor, BNN Bloomberg

Archive

Stocks appear on track for a higher open amid muted moves in the bond market and some encouraging signs in the global fight against COVID-19. On the latter: Johnson & Johnson’s vaccine has been granted emergency use authorization in the United States, where President Joe Biden’s US$1.9-trillion relief package is heading to the Senate after House lawmakers passed the legislation over the weekend. As for the trigger in last year’s turmoil: the 10-year U.S. Treasury yield is hovering around 1.43 per cent this morning after spiking as hit as 1.61 per cent on Thursday.

BUFFETT ZINGERS AND A MEA CULPA 

The world's most famous investor didn't mince words in his annual letter. Among the highlights:

• On "investors and speculators" that don't fit the mold of those that Berkshire cherishes: "Indeed, a patient and level-headed monkey, who constructs a portfolio by throwing 50 darts at a board listing all of the S&P 500, will — over time — enjoy dividends and capital gains, just as long as it never gets tempted to make changes in its original ‘selections.’"
• On fixed income: "Bonds are not the place to be these days ... Fixed-income investors worldwide — whether pension funds, insurance companies or retirees — face a bleak future."
• On the hazards of conglomerate-building: "Financial history is replete with the names of famous conglomerateurs who were initially lionized as business geniuses by journalists, analysts and investment bankers, but whose creations ended up as business junkyards."
• On his own fumbles: "I paid too much" for Precision Castparts, he admitted while pointing to an "ugly" US$11-billion write-down on Berkshire's books in 2020.

There was no bazooka talk in this most recent letter, unlike so many in the past; indeed, Buffett acknowledged Berkshire made zero sizable purchases last year and it seems as though he's just fine with that. He also underscored the merit of share buybacks, noting that Berkshire bought back US$24.7 billion of its own shares last year.

SIDDALL SPEAKS OUT ON CONTROVERSIAL PRICE CALL

Canada Mortgage and Housing Corporation CEO Evan Siddall spoke out on Twitter this morning about the agency’s warning about a potential sharp drop (as much as 18 per cent) in prices that failed to materialize. “I've been taken to task for pessimistic housing forecasts last spring. At the time, I felt responsible to share what my colleagues were predicting,” he wrote in the opening of a tweet thread that closed with him acknowledging “we never pretended to have a crystal ball … In hindsight, we could have made that clearer.” We’re chasing reaction.

IN CONVERSATION WITH CEOs OF TD AND JPMORGAN

We’ve got two banking heavyweights on the network today. Toronto-Dominion CEO Bharat Masrani joins Amanda Lang shortly after 2 p.m. to discuss the quarter that just wrapped and his outlook for the economy. Shortly before that, JPMorgan Chase & Co. CEO Jamie Dimon will be featured in Bloomberg Markets when we join our Bloomberg Television partners.

RRSP DEADLINE

Today’s the last opportunity to make a registered retirement savings plan contribution that will be eligible for deduction in the 2020 tax year. Pattie Lovett-Reid will have advice for anyone eyeing a last-minute investment, and we’ve got plenty of actionable advice for contributors at BNNBloomberg.ca

OTHER NOTABLE STORIES

• CAE is buying L3Harris’ Military Training business for US$1.05 billion, with backing from two of its top institutional investors. For the Montreal-based simulation company best known for its aviation business, this deal is being described as a “significant value creation opportunity”. Beyond the specifics of this purchase, one question for us today will be whether this has satiated CAE’s appetite for M&A after four acquisitions announced since November.
• Air Canada will cut $400 million in costs as a result of revisions to its capacity purchase agreement with Chorus Aviation's Jazz Aviation business. The pillar of that arrangement will see Air Canada transfer 25 Embraer E175 jets to Jazz. The deal is subject to ratification by Jazz pilots.

NOTABLE RELEASES/EVENTS

• Notable data: Canadian current account balance, ISM U.S. manufacturing index
• Notable earnings: Cargojet, Spin Master, Zoom Video Communications
• 9:05 a.m. ET: U.S. Federal Reserve Governor Lael Brainard delivers speech on financial stability at Institute of International Bankers conference
• 9:50 a.m. ET: Amazon Web Services CEO Andy Jassy addresses CERAWeek conference
• 12:50 p.m. ET: OPEC Secretary General H.E. Mohammad Sanusi Barkindo addresses CERAWeek conference
• 1 p.m. ET: Huawei CFO Meng Wanzhou due back in court for extradition hearing