Columnist image
Noah Zivitz

Managing Editor, BNN Bloomberg

|Archive

After energy stocks propelled the S&P/TSX Composite Index to a higher close yesterday, the group’s gains could be at risk today as the air comes out of the oil trade this morning. West Texas Intermediate crude has given up most of the gains that pushed it as high as US$91.46 Thursday amid a whiplash-inducing mix of supply fears, demand uncertainty, waning U.S. stockpiles, and the possibility of a revived Iran nuclear deal.

GEARING UP FOR BANK EARNINGS

To say it’s a murky outlook for the banks fiscal third-quarter reporting season might be an understatement. Between credit worries as central banks raise rates, investment banking activity that – as one analyst put it – has “ground to a halt,” and two big U.S. takeovers still pending regulatory approvals, analysts generally seem to have low expectations for this batch of results. That said, the banks have often defied the skeptics. Check out Michelle Zadikian’s preview at BNNBloomberg.ca, and we’ll set the scene on air at 10:30 a.m. ET when John Aiken from Barclays Capital joins us.

NO QUICK CANADIAN FIX FOR EUROPE’S ENERGY CRISIS

Ahead of German Chancellor Olaf Scholz’s arrival in Canada Sunday, there are several reports out today making it clear that for all the best intentions, there isn’t a Canadian silver bullet for Europe’s energy problems. Sure, there’s been talk of this country eventually playing a role in meeting that continent’s liquefied natural gas needs, but just ask Alfred Sorensen at Pieridae Energy about how tough of a slog that’s been. Instead, it looks like Scholz and Prime Minister Justin Trudeau will play up the potential of green hydrogen.

AND HE’S OUT…

Didn’t take Ryan Cohen long to make good on his plan to cash out of Bed, Bath & Beyond. His exit was disclosed after markets closed yesterday, just two days after he signalled his intent. And so we’ve seen the retailer’s stock getting hammered in extended trading hours. And clearly now there are worries about Cohen’s plan for his other notable meme stock holding: GameStop shares are also under pressure this morning.       

DECEPTIVE RETAIL SALES REPORT

The headline on today's retail sales data looks encouraging: sales up 1.1 per cent in June, almost triple the median estimate among economists tracked by Bloomberg. But if we dig all the way down to the third paragraph in Statistics Canada's release, we see that sales inched up just 0.2 per cent in volume terms. In other words, this is an inflation story, not a matter of Canadian consumers unexpectedly buying more stuff. And it doesn’t get any better in StatsCan's flash estimate for July: it’s ballparking a 2 per cent drop in retail sales for last month. 
                                       
OTHER NOTABLE STORIES

  • Wheaton Precious Metals said it will receive US$150 million in exchange for agreeing to terminate a silver stream tied to the Yauliyacu mine in Peru. It said it’s doing this to help Glencore sell the mine.
  • Shawcor has been awarded a $500-million contract by the Mexican unit of TC Energy to provide pipe-coating services for the Southeast Gateway pipeline.
  • Foot Locker warned its full-year profit will be at the low end of its forecast range and said its sales at stores that were open at least one year in the second quarter sank 10.3 per cent. And yet its shares are surging in pre-market trading. The company also announced that retail industry veteran Mary Dillon will take over as Foot Locker’s president and chief executive next month.
  • Deere & Co. lowered the high end of its full-year profit forecast this morning, while its chairman and chief executive said the fiscal third quarter was hampered by “higher costs and production efficiencies driven by the difficult supply-chain situation.”
  • General Motors is about to pay a dividend for the first time since the pandemic took hold. The automaker announced a quarterly distribution to shareholders has been set at US$0.09 per share, with the first payment on Sept. 15. The last dividend was paid out on March 20, 2020 — at a rate of US$0.38 per share. GM also announced today that it's planning to resume share buybacks.

NOTABLE RELEASES/EVENTS

  • Notable data: Canadian retail sales
  • 1115: Prime Minister Justin Trudeau makes announcement and holds media avail in Les Îles-de-la-Madeleine, Que.
  • 1400: Transport Minister Omar Alghabra addresses Standing Committee on Transport hearing re. airport delays and cancellations