Janet Yellen will make the case for President-elect Joe Biden’s US$1.9-trillion spending package when she addresses U.S. senators today, and according to prepared remarks that have leaked out, her argument would sound eerily similar to the Canadian Liberal government’s defence of its massive deficit spending. “Right now, with interest rates at historic lows, the smartest thing we can do is act big,” Yellen will say at her confirmation hearing as U.S. Treasury secretary. We’ll set the scene, gather insight on how far Yellen can push that argument and assess what it will take to keep markets happy.

LESSONS LEARNED FROM CARREFOUR FUMBLE

There’s still plenty of cleanup to be done on Alimentation Couche-Tard’s ill-fated attempt to buy Carrefour. This morning, we’ll get perspective from former Quebec Premier Jean Charest. No doubt the political hornets’ nest will be addressed in that discussion; on that front, we should note that France Finance Minister Bruno le Maire is reportedly being hauled in to explain his rationale for sending Couche-Tard packing in a closed-door session with lawmakers today.       

WATCHDOG SEES HOPE FOR OIL DEMAND

The International Energy Agency today said the global rollout of COVID-19 vaccines is putting crude fundamentals “on a stronger trajectory” for this year. The IEA expects demand to climb by 5.5 million barrels per day in 2021 after last year’s historic collapse. But it’s also cautioning there’s an iffy immediate-term outlook due to recent lockdown measures and it has trimmed its demand forecast for the first quarter by 600,000 barrels per day. Add it all up and we’re seeing WTI and Brent oil prices trading a bit higher this morning.

OTHER NOTABLE STORIES

- Bank of America touted its record-high capital levels this morning while announcing a US$2.9-billion share buyback plan. Its shares slipped into the red, however, after the bank released results showing a 5 per cent fourth-quarter slump in fixed income, currencies and commodities (FICC) trading revenue. Overall fourth-quarter profit came in a bit above estimates, thanks in part to a big drop in cash that was being reserved to cover bad loans. 

- Canada's factory activity eased up in November, with sales slipping for the first time in three months, according to Statistics Canada. The aerospace sector was a notable drag, with sales in that segment tumbling 23.8 per cent.

- Goldman Sachs leaned on its investment bankers in the latest quarter, with revenue from that division surging 27 per cent year-over-year. Traders played a similarly big role, with Global Markets revenue jumped 23 per cent. Unlike BofA, Goldman managed to post an increase in FICC trading revenue.

NOTABLE RELEASES/EVENTS

- Notable data: Canadian manufacturing sales, Canada wholesale trade

- Notable earnings: Goldman Sachs, Bank of America, Netflix

- 10:00 a.m. ET: U.S. Senate Finance Committee holds confirmation hearing for Janet Yellen as U.S. Treasury secretary

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

- Shareholder votes on West Fraser Timber's purchase of Norbord (2 and 3 p.m. respectively)

- Donald Trump's last full day as president of the United States