Jun 29, 2022
The Daily Chase: Powell and Lagarde in the spotlight; HELOC worries
By Noah Zivitz
First Look With Surveillance: NATO Summit, Jan. 6th Rage
Managing Editor, BNN Bloomberg
The heads of the U.S. Federal Reserve, European Central Bank, and Bank of England will share a stage this morning in a panel moderated by Bloomberg Television’s Francine Lacqua (and they’re joined by another big name from the world of central banking: Agustin Carstens, who used to run Mexico’s central bank and is now the Bank for International Settlements’ general manager). No need to explain why this matters. We’ll keep close tabs on what they say and how investors interpret the commentary. It starts at 9:00 a.m.
HOW CANADIANS ARE USING HELOCS
How’s this for a timely survey: just one day after the Office of the Superintendent of Financial Institutions announced tweaks to the rules for holders of HELOCs and other combined-loan products, we’ve got a new survey that sheds new light on how Canadians are making use of their home equity lines of credit. Slightly more than one-quarter of homeowner respondents to the survey, which was conducted by Leger for BNN Bloomberg and RATESDOTCA earlier this month, said they had a HELOC; meanwhile, barely half of them said they’re paying down the debt. The survey also includes findings on how much is being borrowed, and how the loans are being put to use. We’ve got details at BNNBloomberg.ca, and RATESDOTCA Managing Editor John Shmuel will join us shortly after 4:00 p.m. to discuss the findings. If you missed it, check out Jacqueline’s interview with Peter Routledge from OSFI, in which he spoke about yesterday’s announcement and explained why the regulator is “very worried” about Canadians’ finances.
WHITECAP MAKES A SPLASH
Whitecap Resources is buying XTO Energy Canada from Imperial Oil and Exxon Mobil for $1.9 billion in a move than expands its footprint in the natural gas-heavy Duvernay and Montney regions in Alberta, and gives it more firepower to enrich its shareholders. Indeed, Whitecap said the transaction will boost free funds flow per share 20 per cent in 2023 and 2024. And the company isn’t wasting any time putting that to work: alongside the deal, Whitecap said it’s raising its monthly dividend 22 per cent to $0.0367 per share.
OTHER NOTABLE STORIES
- Heads up that Shopify will begin trading on a split-adjusted basis. The company’s shareholders approved its 10:1 split earlier this month.
- Corus Entertainment beat revenue expectations in its fiscal third quarter. Notably, it said television advertising revenue inched up a couple percentage points year-over-year, and rose sharply from the previous quarter — which could be an encouraging signal amid all the recessionary warnings. We’ll get more insight into the advertising landscape when Corus CEO Doug Murphy talks with Paul at 10:30 a.m.
- Alimentation Couche-Tard narrowly outpaced profit and revenue expectations in its fiscal fourth quarter. Interesting though to see the hits the company took at a net income level, including a US$56.2-million pre-tax impairment on its Russian operations, and a slightly smaller impairment on its stake in pot retailer Fire & Flower. Lots of inflation talk in the release; we’ll point out here that Couche-Tard’s fuel revenue soared 48.2 per cent year-over-year despite a drop in fuel sales volume at the company’s U.S. locations that were open for more than a year.
- Telus Corp. said this morning it’s paying US$66 million to boost its stake in Telus International. Three million multiple voting shares are being purchased for US$22 apiece. Through the close of trading yesterday, Telus International’s New York-listed shares have tumbled 22.7 per cent this year.
- Unifor said last night that a tentative agreement has been reached that would end the strike by HBC logistics workers in Ontario. About 330 workers walked off the job a week ago in a pay dispute. The ratification vote is scheduled for tomorrow.
- Star Diamond Corp. is on our radar after the Saskatchewan-focused miner announced that Rio Tinto, its joint-venture partner in the Fort à la Corne diamond district, is reviewing alternatives for its 75 per cent stake in the venture and doesn’t plan to plow any more money into the JV this year other than for care and maintenance.
- Pinterest shares are rising in pre-market trading after the social media platform announced it’s poaching Bill Ready from Google to be its next chief executive. Ready was serving as Google’s president of commerce and payments.
- Notable data: U.S. GDP (Q1 - third reading)
- Notable earnings: Corus Entertainment, General Mills
- 900: U.S. Federal Reserve Chair Jerome Powell, European Central Bank President Christine Lagarde, Bank of England Governor Andrew Bailey, Bank for International Settlements General Manager Agustin Carstens participate in panel moderated by Bloomberg's Francine Lacqua
- 1200: Deputy Prime Minister and Finance Minister Chrystia Freeland holds media avail in Sherbrooke, Que