Apr 26, 2017
BNN's Daily Chase: Investors brace for Trump tax plan
By Andrew Bell
We’re all set to brief Canadian investors today on the implications for their portfolios as markets await tax-cut proposals from U.S. President Donald Trump.
We heard this morning from Avery Shenfeld, chief economist at CIBC Capital Markets. He warned in February that the implications of tax changes that would penalize imports from Canada and other countries are ominous but too complex to even model convincingly.
BNN Managing Editor Noah Zivitz notes that named and unnamed administration officials have been trying to talk down expectations for the tax cut, including Budget Director Mick Mulvaney who said last week that detailed legislation won't be ready by May
At 2:20 p.m. ET, we’ll get global perspective on any tax proposals from Vis Nayar, deputy chief investment officer for equities at HSBC Global Asset Management.
FREE REAL TIME TSX STOCK QUOTES
Now, only at BNN.ca. Don’t delay! Watch Canadian stocks trade live here.
LUMBERING ON
We’ve also got extensive coverage of the fallout from Washington’s decision to impose duties on Canadian softwood lumber.
There’s been some trenchant language on trade from Trump, who says “we will be putting a very big tariff on lumber -- timber -- coming into this country. People don’t realize Canada has been very rough on the United States. Everyone thinks of Canada as being wonderful, and so do I. I love Canada. But they’ve outsmarted our politicians for many years.”
Foreign Minister Chrystia Freeland is cautioning Washington to mind its manners on the lumber issue because Canada is a major supply of a commodity vital for the housing sector.
University of Victoria economics professor Cornelis van Kooten joins us on Commodities at 11:20 a.m. ET. He tells segment producer Adena Ali that the levy, which could rise to an average 30 per cent when other tariffs are tacked on, will lift lumber prices in the United States. We’ll explore the implications for U.S. home builders.
Yesterday, those builders told us the rise in lumber prices this year has already inflated the cost of producing a home by more than US$3,000.
CROSS-CANADA PERSONAL FINANCE UPDATE
HOME CAPITAL FACING ACTION
And we’re tracking the latest from Home Capital (HCG.TO) which is facing regulatory action against both the company and former executives.
The mortgage lender says it has seen a “decline” of almost $600-million in its high interest savings account balances in recent weeks, which “has accelerated since April 20.”
The company is lining up “a major institutional investor for a credit line in the amount of $2 billion.” But the financing won’t come cheap. Home Capital says “the terms of the proposed agreement would have a material impact on earnings, and would leave the company unable to meet previously announced financial targets.”
To get the credit, which comes with a 10-per-cent interest rate, Home Capital is set to pay “a non-refundable commitment fee of $100 million.”
FUTURE CONSIDERATIONS
As home prices climb in hot markets, those who already own real estate and are planning to tie the knot won’t want to miss some tax-planning advice lined up by segment producer Nadine Habib. At 2:50 p.m. ET, we’ll hear from Christine Van Cauwenberghe, a estate planning lawyer at Investors Group, on how to think about a prenuptial agreement.
CENOVUS-CONOCO CRITICISM
And finally, Tara Weber will be at the Cenovus (CVE.TO) annual meeting at 4 p.m. ET at which CEO Brian Ferguson and the board may face criticism over the $17 billion purchase of ConocoPhillips (COP.N) assets.
Len Racioppo, managing director of shareholder Coerente Capital Management, told us yesterday that “shareholders have been diluted by 47.5 per cent and that’s not right."
Every morning Commodities host Andrew Bell writes a ‘chase note’ to BNN'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.bnn.ca/subscribe.