Noah Zivitz

Managing Editor, BNN Bloomberg

Archive

Global stocks and U.S. futures are sliding again this morning as investors remain squarely focused on the latest COVID-19 developments, including a sobering assessment of what lays ahead for the U.S. – where even President Donald Trump has shifted his tone at the prospect of hundreds of thousands of deaths. A quick glance of overnight European economic data shows a long list of Purchasing Managers’ Indices in contraction territory, while the U.S. ISM index is on tap for later this morning. All this to say, it’s shaping up to be a rocky start to Q2 after a first quarter that saw every major global stock market tracked by Bloomberg finish in the red. Read all about the TSX’s performance here.

WAGE SUBSIDY WAITING GAME

Details on the federal government’s new 75 per cent subsidy program were initially expected yesterday, but the wait has dragged into today after Finance Minister Bill Morneau postponed the announcement via Twitter. And now we know it’s happening at 2 p.m. ET. The stakes speak for themselves, particularly after a new CFIB survey yesterday indicated one-third of the country’s small business owners that’ve closed shop are uncertain if they’ll be able to re-open on the other side of this crisis. Check out BNN Bloomberg's Jon Erlichman’s primer here.

NEXT MOVES IN OIL PRICE WAR

The shackles came off OPEC+ nations today as the coordinated production curbs expired overnight. Our Bloomberg News partners are reporting Saudi Aramco’s output jumped above 12 million barrels per day while Russia is balking at raising production. As the price war plays out, U.S. President Trump yesterday claimed Russia President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman are “going to get together and we’re all going to get together and we’re going to see what we can do.” West Texas Intermediate crude prices have bounced around this morning, and were last seen barely in positive territory after having been down more than two per cent.

DIVIDENDS IN FOCUS

Remarkable study in contrasts that serves to underscore why Canada’s largest banks are revered for their stability. While the CEOs of CIBC and BMO were on BNN Bloomberg yesterday giving strong signals their dividends aren’t at risk in the current crisis, shares of some major global financial institutions are sliding today after the U.K. Prudential Regulation Authority urged lenders to halt dividends, buybacks and cash bonuses. Shares of HSBC Plc have been down as much as 10 per cent in London; while other big banks under the PRA’s purview, including Barclays and Lloyds, are also under pressure.

OTHER NOTABLE COVID-19 CORPORATE DEVELOPMENTS

-U.S. shale producer Whiting Petroleum has filed for Chapter 11 bankruptcy protection in the United States, with CEO Bradley Holly saying the Saudi-Russia oil-price war and COVID-19 convinced the company’s board that its planned restructuring “provides the best path forward”.

-Kinross has withdrawn its forecasts as a result of the pandemic. It also disclosed today it tapped US$750 million from its US$1.5-billion revolving credit facility.

-Corus Entertainment today said it’s going to refrain from buying back shares and will also defer its decision on the June dividend payment as a result of the uncertainty caused by COVID-19. The company also reported a slight decline in overall fiscal second-quarter revenue, while adjusted profit narrowly beat estimates.

-Dollarama is suspending its fiscal 2021 forecasts, saying it’s “impossible to forecast the impact of the pandemic on the Canadian economy.” The retailer said its sales activity “surged” in late February and early March before transactions slowed as health officials and governments ramped up social distancing efforts. For its fiscal fourth quarter that just wrapped, Dollarama reported a two per cent rise in same-store sales and profit that’s in line with estimates.

-BlackBerry has declined to offer a full-year forecast due to the virus. CEO John Chen also warned of a “tough first quarter.” Shares are down almost 10 per cent pre-market.

-Teck Resources suspended its full-year forecasts overnight and said it’s unknown when construction will resume at the Quebrada Blanca Phase 2 (QB2) project in Chile. The miner is now estimating it will be required to contribute US$880 million toward QB2 project capital. 

-A&W Revenue Royalties Income Fund is suspending payment of distributions, while saying 200 of its restaurants have been temporarily closed and traffic is “down significantly” at those that remain open. 

-Uni-Select this morning said half of its employees are being furloughed and one-third of its sites are closed temporarily. Beyond the employees temporarily laid off, the rest have seen their hours cut by 20 per cent.

NOTABLE RELEASES/EVENTS

-Notable earnings: Dollarama, Corus Entertainment, Reitmans

-Notable data: ISM U.S. manufacturing index

-OPEC+ nations free to produce as much as they want as curtailment agreement expires

-11:15 a.m. ET: Prime Minister Justin Trudeau addresses Canadians from Ottawa

-1:00 p.m. ET: Ontario Premier Doug Ford leads provincial COVID-19 briefing

-5:00 p.m. ET: U.S. Coronavirus Task Force holds briefing at the White House

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.