The market turmoil that dragged down Big Tech yesterday – which is being dubbed a “taperless tantrum” by SocGen Strategist Kit Juckes – has abated for now. We start by looking to the bond market, where the U.S. 10-year Treasury yield has slipped as low as 1.449 per cent this morning after triggering alarm bells on Thursday with an abrupt surge above 1.6 per cent. As BNP Paribas Wealth Management Chief Investment Officer Edmund Shing told us as the aftershocks from that spike were rippling across asset classes, “the level is not that concerning at all.” Rather, it’s the speed of the move that’s sending a very important signal to market participants and U.S. Federal Reserve Chair Jerome Powell. We’ll have plenty more insight today, including with David Rosenberg shortly after 10 a.m.
ALBERTA KEEPS HOPE ALIVE FOR KXL
Jason Kenney's United Conservative government is expecting a $20.2-billion deficit in the current fiscal year, with a gradual narrowing of that shortfall over the forecast horizon. However, no plan to balance the books in a budget that appears to pin plenty of hope on the province’s energy sector. Bitumen royalties are seen more than tripling to almost $4 billion in 2023-24, and that’s layered on oil-price assumptions that are looking conservative based on today’s prices. Also notably, the government is still keeping hope alive for Keystone XL. A whole page is dedicated to that "hot potato" (as Murray Mullen described it in our special coverage yesterday) in the budget document, which shows the government isn't taking any provisions associated with its $1.3-billion exposure to the pipeline or its vow to "explore all options" to recoup that cost if KXL is toast. We’ll go deep into Alberta’s fiscal planning with Finance Minister Travis Toews at 8:30 a.m.
COVID WATCH
In a week that’s seen plenty of new developments on the vaccine front (including breaking news this morning as Health Canada approves AstraZeneca’s candidate), I can’t wait to hear what James Moore has to say when he joins us this afternoon. The former federal cabinet member under Stephen Harper will give us a sense of what he’s telling (and hearing from) clients in his current role as a senior advisor at Dentons and his view on how the feds and provinces should be preparing for the expected surge in vaccine deliveries to this country in the coming months. That’s at 2:30 p.m.
OTHER NOTABLE STORIES
- Pembina Pipeline swung to a more than billion-dollar net loss in the fourth quarter amid $1.6-billion in impairment charges tied to its petrochemical joint venture and investments in LNG ambitions.
- Beyond Meat's quarterly performance was overshadowed in yesterday's after-hours session with a pair of big-name partnerships. A three-year deal with McDonald's includes a plant-based burger supply arrangement and a pact to co-develop other alt proteins. It's also going to create, uhm, “craveable and innovative" protein options for Yum! Brands' KFC, Pizza Hut and Taco Bell banners. As for the quarter, Beyond Meat swung to an adjusted EBITDA loss as revenue rose just a couple percentage points.
- Airbnb’s business hasn’t been decimated to the extent analysts feared. Fourth-quarter revenue sank 22 per cent to US$859 million, far ahead of the $740 million that had been anticipated. Meanwhile, the net loss ballooned to US$3.9 billion from US$352 million a year earlier due costs tied to the company’s initial public offering.
- Nexgen Energy is tapping into investors' newfound appetite for uranium names by announcing a $150-million bought deal share sale priced at discount to yesterday's closing price.
NOTABLE RELEASES/EVENTS
- Notable data: U.S. personal income and spending
- Notable earnings: Onex, Sprott, Cronos Group, DraftKings
- 6:30 a.m. ET: G20 finance ministers and central bankers hold virtual meeting
- 9 a.m. ET: Microsoft President Brad Smith, SolarWinds CEO Sudhakar Ramakrishna among speakers at U.S. House Oversight Committee hearing on SolarWinds breach
- 9:30 a.m. ET: U.S. Food and Drug Administration meeting to discuss Johnson & Johnson's request for COVID-19 vaccine emergency use authorization
- 11:30 a.m. ET: Prime Minister Justin Trudeau delivers COVID-19 update in Ottawa alongside Intergovernmental Affairs Minister Dominic LeBlanc, Health Minister Patty Hajdu, Procurement Minister Anita Anand, Chief Public Health Officer Dr. Theresa Tam, and Deputy Chief Public Health Officer Dr. Howard Njoo
- 2 p.m. ET: Foreign Affairs Minister Marc Garneau meets virtually with U.S. Secretary of State Anthony Blinken
- 4:30 p.m. ET: Garneau holds media avail after meeting with Blinken
- NOTE: Berkshire Hathaway earnings and Warren Buffett's annual letter will be released tomorrow
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