The Big Three: Gold close to 6-year high; CannTrust's wild ride; Brookfield to buy Genworth stake
U.S. stocks surged in early trading Tuesday amid some encouraging signals on the China-U.S. trade file. The American trade representative says some Chinese imports will be spared from an additional 10 per cent tariffs until mid-December. Meanwhile, China’s commerce ministry says Beijing will renew trade talks with the U.S. in the coming weeks.
Gold is extending its run north of US$1,500 per ounce as a laundry list of global risks work in the metal’s favour. From tumult in Hong Kong, to fiscal chaos in Argentina, to persistent trade fears, and the general trend toward lower rates, investors have pushed gold to its highest level since early 2013.
BROOKFIELD BUYING CONTROL OF GENWORTH MI CANADA
This is a deal that didn’t come out of the blue. Recall Genworth Financial announced in July it was going to shop its stake in the Canadian mortgage insurer amid frustration about the slow road to regulatory approval for its takeover by a Chinese entity. And so today we’ve got Brookfield Business Partners scooping up that 57 per cent stake in MI Canada for $2.4 billion. We’ll address how this fits within Brookfield’s empire and what it means for mortgage holders.
Yesterday our BNNBloomberg.ca poll asked if CannTrust is investible; 76 per cent of our audience said they wouldn’t touch it. We’ll continue exploring fallout from the pot producer’s regulatory missteps, including perspective this morning from another player in the medical space, when Supreme Cannabis’s CEO joins Amber Kanwar on The Open.
IN CONVERSATION WITH FORMER FED VICE-CHAIR
Alan Blinder joins The Open for unique perspective on U.S. President Donald Trump’s relentless attack on that country’s central bank. Blinder was vice-chair of the Federal Reserve from 1994-96, and has also served in the U.S. Congressional Budget Office, National Bureau of Economic Research and as president of the U.S. Council of Economic Advisors. Watch for the conversation at 10:30 a.m. ET.
OTHER NOTABLE STORIES
-Back to Hong Kong protests for a moment, where operations at the international airport have been interrupted again: we’re keeping an eye on shares of Cathay Pacific as a proxy for fallout from the situation. Its stock was down as much as 5.4 per cent today after sliding 4.9 per cent yesterday. Also worth noting Air Canada is warning about the impact on its operations.
-Pattern Energy today confirmed it has “drawn interest from third parties.” Yesterday, its stock shot higher after our Bloomberg partners reported on potential takeover interest.
-Freshii, whose growing pains are well documented, today beefed up its management and governance teams. Former Coca-Cola and P&G official Bill Schultz has been named a director. And Yum! Brands veteran Oliver Rodbard has been named VP of operations.
-Lightspeed could be a stock to watch after announcing 6.6 million shares are about to hit the market. Only a fraction are being offered by the company; most are being sold by shareholders – including CEO Dax DaSilva, who we spoke with yesterday.
-Constellation Brands is pruning its exposure to Canada by agreeing to sell its Black Velvet Canadian Whisky brand, and a related production site in Lethbridge, AB, to Heaven Hill Brands for US$266 million.
-Notable earnings: Tilray, Acreage Holdings, Stelco Holdings, Chorus Aviation, Indigo Books & Music, Great Canadian Gaming
-Notable data: U.S. CPI
-9:30 a.m. ET: OECD releases "Recruiting Immigrant Workers: Canada 2019" report
-11:00 a.m. ET: Prime Minister Justin Trudeau and Toronto Mayor John Tory hold media avail at Toronto City Hall
-2:10 p.m. ET: U.S. President Donald Trump delivers remarks on “America’s Energy Dominance and Manufacturing Revival” at Shell plant in Monaca, PA.
Every morning BNN Bloomberg's Managing Editor Noah Zivitz writes a ‘chase note’ to BNN Bloomberg's editorial staff listing the stories and events that will be in the spotlight that day. Have it delivered to your inbox before the trading day begins by heading to www.bnnbloomberg.ca/subscribe.