The upbeat mood that prevailed on Bay Street yesterday continues this morning as US futures rise. suggest we will see a rebound when trading resumes in New York this morning after yesterday’s holiday. The risk sentiment is evident in most markets: the US dollar has been trading lower against all major currencies except the Japanese yen, the price of gold is falling, oil is rising (in particular: an executive kuwait energy saying our partners at Bloomberg believe there is a $30/barrel “war premium” built into crude), and Bitcoin is rising.
We’ll turn to market professionals to reconcile what’s happening in real time with persistent gloomy comments from the biggest names. Bloomberg News highlighted today that Morgan Stanley strategists are caveat that “the bear market will not end until the recession hits or the risk of one is extinguished.” As for the TSX: yesterday it was up the most since June 2, with all but 50 members of the composite index closing higher.
CANADIAN CONSUMERS ARE STILL SPENDING
There were no early signs this morning that Canadian consumers are seeking shelter amid economic uncertainty. Statistics Canada released a preliminary estimate indicating that retail sales rose 1.6 percent in May. That would mark a near doubling from April, when sales rose 0.9 percent, narrowly beating expectations. On top of all that, March sales were revised up to a 0.2 percent gain. We’ll break down the details and assess consumer resilience in the face of catastrophic economic forecasts.
ALBERTA SPREADING THE WORD IN DC (AGAIN)
The province’s energy minister, Sonya Savage, is in the US capital for the start of another charm offensive. she is expected to meet with unspecified representatives of the US Congress, and Prime Minister Jason Kenney will meet with her in Washington tomorrow. This is part of an ongoing push to highlight Alberta’s ability to improve North America’s energy security. Now, if only there was one pipeline that the current administration did not effectively eliminate. But US Treasury Secretary Janet Yellen made no apologies for that yesterday afternoon when asked by Dave about US President Joe Biden revoking Keystone XL permits. “I don’t see it as a short-term measure to address the current situation,” she said. said about the pipeline, whose ghost continues to haunt the White House.
OTHER FEATURED STORIES
- hydro one Announced this morning that Mark Powereska will be leaving his position as President and CEO to take a job with another utility in Western Canada. He is being replaced on an interim basis by Bill Sheffield, who currently sits on Hydro One’s board. Separately, before the news was announced, a Credit Suisse analyst upgraded Hydro One to neutral from underperforming (the equivalent to selling), citing the recent weakness in the share price.
- Algoma Steel has released new details on its previously announced US$400 million substantial issuer offer. The company said its buyback will be conducted as a “modified Dutch auction” in which investors can choose to participate in a price range of US$8.75 to US$10.25 per share.
- Mondelez International Announced late yesterday that it will buy Clif Bar & Company for $2.9 billion (plus possible contingent payments). Clif is ubiquitous in an increasingly competitive space. Randomly clicking on one of their products online, I see that their Peanut Butter Banana Dark Chocolate Bar has 21 grams of sugar.
- Kellogg’s rip himself up. The company announced that it will spin off its grain and plant-based food units in North America. Kellogg noted that those two businesses accounted for 20 percent of its sales last year.
- Health Announced this morning it is paying $1.6 million in cash and stock to acquire Calgary-based healthcare provider Inliv.
- Spirit Airlines shares are rising again in pre-market trading after JetBlue Airlines raised its takeover proposal to acquire the ultra-low-cost carrier for $33.50 a share from $31.50 as it attempts to disrupt the takeover deal Spirit struck with Frontier Group Holdings earlier this year.
- Professional Real Estate Investment Trust said is paying $114 million to acquire a 50 percent stake in a portfolio of 21 industrial properties in Atlantic Canada. It is partnering in the acquisition with Crestpoint Real Estate Investments, which is acquiring the other 50 percent stake, and is also paying Pro REIT $113.5 million to acquire a stake in a basket of 21 properties already owned by the REIT.
- Trevali Mining confirmed last night the last of his two missing workers in Burkina Faso was found dead. “All of us at Trevali mourn the loss and offer our deepest condolences to the families and friends of our colleagues during this difficult time,” Trevali CEO Ricus Grimbeek said in a statement.
- Some notable developments in TSX-listed names associated with commodities that have been in high demand: Gensource Potash Announced this morning it plans to double the capacity of its Tugaske project in Saskatchewan to 500,000 tons per year, and NexGen Energy said submitted the draft Environmental Impact Statement for its proposed Rook I Project to the Saskatchewan Ministry of the Environment and the Canadian Nuclear Safety Commission. NexGen highlighted in a statement that its plans have been backed by three Dene First Nation gangs.
- Notable Data: Canadian Retail Sales and Job Vacancies, US Existing Home Sales.
- Notable Earnings: Reitmans, Lennar
- 1100: Funeral of Loretta Rogers (Cathedral Church of St. James, 106 King Street East) https://www.legacy.com/ca/obituaries/thestar/name/loretta-rogers-obituary?pid=202206638
- 1200: Cleveland Fed President Loretta Mester speaks on a panel at the Women in Leadership event in Cleveland
- 2:30 p.m.: British Columbia Auditor General Michael Pickup calls to discuss report on oversight of major mines (report is posted at 1:00 p.m. here)