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Noah Zivitz

Managing Editor, BNN Bloomberg

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Gerald Butts is out. The House is back to business after a one-week break. The justice committee is meeting. And SNC-Lavalin is just a few sleeps away from reporting year-end results after two profit warnings in the span of less than a month. What a week it’s shaping up to be for the Montreal-based engineering giant and everyone associated with the political furor over alleged interference in its corruption case. At the end of the day, what thread in this complex story matters most for investors? We’ll chase answers.

NOTLEY CRUDE-BY-RAIL UPDATE

Alberta Premier Rachel Notley will deliver an update this afternoon on negotiations to bolster the province’s crude-by-rail capacity. Recall that in late November, she unveiled a plan to add 120,000 barrels per day of rail capacity starting later this year, indicating such a move would shave the discount on Western Canada Select by as much as four dollars per barrel. Since that day, the differential has narrowed from ~US$33 per barrel to US$13.50.

HUAWEI FOUNDER TAKES SWIPE AT U.S.

Ren Zhengfei was defiant in an interview with the BBC, declaring “there’s no way the U.S. can crush us.” He also said the arrest of his daughter, Meng Wanzhou, in Canada and her potential extradition was a “politically motivated act.” Meanwhile, the U.K. National Cyber Security Centre has reportedly determined that any potential risks associated with Huawei equipment can be mitigated.  

OTHER NOTABLE STORIES

-Walmart shares rose ~ four per cent in pre-market trading after posting US$1.41 in adjusted fourth-quarter profit (estimate was US$1.34). U.S. same-store sales ex-fuel rose 4.2 per cent. Meanwhile, same-store sales in Canada rose 1.1 per cent in the quarter, with the company noting “softer” sales of general merchandise.

-A new report indicates a rising proportion of Ontario consumer insolvencies can be traced back to payday loans (37 per cent in 2018, from 32 per cent in 2017). We have the report’s author on The Real Economy.

-HSBC Bank Canada’s retail banking business posted the strongest year-over-year growth (4.5 per cent) of any of the bank’s major units in the fourth quarter. HSBC attributes the gains to improved market share in the mortgage market, among other factors.

-BHP Billiton shares are drifting lower in London after reporting first-half underlying profit that fell short of estimates. Not much talk about the Jansen potash project in today's documents, other than characterizing it as a "strategic option." BHP says it’s allocating US$240 million for capex on potash this year.  

-Blackstone is paying US$1.6 billion to acquire a 45 per-cent-stake in Targa Resources’ Bakken assets.  

-Jean-Claude Juncker has warned the EU will abandon its plan to buy more American soybeans and liquefied natural gas if the U.S. applies tariffs on European cars.  

-A convoy of pro-pipeline truckers, dubbed United We Roll – and which has attempted to distance itself from extremist factions, is expected to make its presence felt on Parliament Hill later this morning.

NOTABLE RELEASES/EVENTS

-Notable earnings: Emera, Hudbay Minerals, Stelco Holdings, Walmart, BHP Billiton

-3:00 p.m. ET: Alberta Premier Rachel Notley holds news conference in Edmonton (preceded by technical briefing at 1:30 p.m. ET)

-3:30 p.m. ET: House of Commons justice committee meets in camera re. allegations of political interference in SNC corruption case.

-4:30 p.m. ET: B.C. government tables budget

-5:00 p.m. ET: Senate Committee on energy, the environment and natural resources resumes study of Bill C-69 (CAPP representatives speaking)​

-6:00 p.m. ET: Senate Committee on Agriculture and Forestry hearing on "support for compensation for supply managed agricultural sectors" (started Monday, concludes on Thursday) ​

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.