All it took was a 69-word statement for U.S. Trade Representative Robert Lighthizer to strike down any NAFTA optimism. "The NAFTA countries are nowhere near close to a deal," he said in the first line of a statement that rattled off a long list of “gaping differences.” His dismal tone came just a few hours after Prime Minister Justin Trudeau told a crowd at the Economic Club of New York "there is a good deal on the table."
Primary question today is whether Canada and Mexico will bend to the Americans' will, or if Lighthizer's statement serves as a precursor to U.S. President Donald Trump delivering on his threat to abandon the trilateral deal.
Should be pointed out Trump called Trudeau last night; according to the PMO’s readout, the two leaders discussed Trudeau’s visit to Boston, the joint World Cup bid, and “progress on the negotiation of the North American Free Trade Agreement.”
GAS PRICES SURGE
Today's Canadian inflation data looks pretty ho-hum on the surface. A 2.2 per cent rise year-over-year in April. A slight deceleration from March and bang in-line with estimates. But, wow - the details are far more jarring, with gasoline prices surging 14.2 per cent. That won't come as a surprise to anyone who's been filling up, but it's a stark reminder that there's real pain at the pumps.
TSX WINNING STREAK
The TSX Composite Index heads into the last trading session of the week riding a 10-day winning streak. Yesterday it was the only major North American market to close in positive territory, and is now within 278 points of its all-time high (16,421.42).
OIL ON A TEAR
The TSX’s hot streak has been fuelled in no small measure by an upswing in the price of oil, whose U.S. benchmark has rallied from just US$67/barrel at the start of the month to more than US$72 yesterday. Meanwhile, the discount on Canadian crude has narrowed to a little more than $13 from $30 at the start of February. The election in Venezuela on Sunday should be watched as an upcoming catalyst.
WHY BCE IS AN 'IRONIC DIVIDEND STOCK'
Watch for our interview with BCE CEO George Cope later today during Bloomberg Markets, in which he addresses the cost of telecom services in Canada, the benefits of owning a media division (IE, Bell Media, which owns us), the payoff from Bell's investment in broadband technology, and why he thinks his company is "an ironic dividend stock" that will actually benefit from a rise in interest rates.
PORTER STILL HOPING TO LAND JETS
Porter Airlines was stymied a few years ago in its attempt to extend the island airport runway in Toronto, a necessary precursor to adding CSeries jets to its fleet. But CEO Bob Deluce hasn’t lost hope. He told BNN Bloomberg the crucial runway extension is eventually going to happen “with or without jets”. And that’s it’s a question of when, not if, jets will enter Porter’s fleet. Watch for the full interview today on the station.
OTHER NOTABLE STORIES
-The B.C. government released an update on the Trans Mountain expansion permitting process late yesterday, reminding everyone that 1,186 provincial permits are needed and saying that 536 applications are currently under review, 438 are yet to be submitted, and just 212 have been issued so far.
-In another sign that the politics of trade deficits is rich: China Vice Premier Liu He reportedly told U.S. President Donald Trump yesterday China would slash its trade surplus with the world’s largest economy by US$200 billion.
-Reminder: WestJet pilots are in a legal strike position as of May 19, but say they won't walk out until after the long weekend
NOTABLE RELEASES/EVENTS
-Notable earnings: Deere & Co.
-8:45 a.m. ET: Prime Minister Justin Trudeau meets with Wayfair CEO Niraj Shah in Boston
-10:00 a.m. ET: Trudeau delivers remarks at MIT’s Solve Conference in Boston
-11:30 a.m. ET: U.S. President Donald Trump delivers remarks at Prison Reform Summit (we’ll monitor in case he veers into a trade discussion)
-7:00 p.m. ET: Former Greece Finance Minister Yanis Varoufakis delivers speech in Toronto
Every morning BNN'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.
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