Elon Musk disappoints investors as Tesla shifts production targets
Bombardier said this morning it has a letter of intent from an unnamed European customer to purchase up to 61 CSeries jets. At list price, that would be worth almost US$5 billion if the LOI is exercised in full. That's putting some shine on a quarterly release that otherwise shows cash burn accelerated in the third quarter, while losses widened. And Bombardier is also cutting its full-year CSeries delivery forecast because of a bottlenecks at engine supplier Pratt & Whitney.
TORONTO HOME SALES SINK, AGAIN
Home sales across the Greater Toronto Area plunged 26.7 per cent year-over-year in October. Nonetheless, the Toronto Real Estate Board's director of market analysis says the psychological impact from the province's intervention "is starting to unwind." The average selling price inched up last month, but it's still sitting 15 per cent below the April peak. And almost all the heat is in the condo market.
MUSK DISAPPOINTS INVESTORS AS TESLA SHIFTS PRODUCTION TARGETS
Tesla's rock star leader isn't living up to investors' expectations. Elon Musk is warning shareholders that Model S and Model X production will fall 10 per cent in the fourth quarter as the company shifts resources to its Model 3 line, where the production outlook is already falling behind the company's previously stated timeline. And that’s on top of reporting a much big loss third-quarter loss than anticipated. Tesla shares are falling ~6 per cent in pre-market trading.
POWELL EXPECTED TO GET FED NOD
We await the official word from U.S. President Donald Trump, but multiple reports indicate he’s poised to nominate Governor Jerome Powell as the next chair of the U.S. Federal Reserve (with the announcement believed to be happening around 3:00 p.m. ET today). The common sentiment is this means more of the same from the central bank. Investors are reacting by sending the U.S. dollar lower against almost every major counterpart, while the price of gold is trading modestly higher and global stocks are mixed.
Should point out Bank of Canada Governor Stephen Poloz is urging the public not to put too much stock in any single person’s sway at the central bank. “There is probably far too much focus on individuals in this analysis,” he told lawmakers in Ottawa yesterday when asked about the Powell speculation. “Just as we have a team that make these [policy] decisions, they have a team and there’s a great deal of checks and balances in that system…”
As for yesterday’s rate decision, TD’s economics team takes the prize for most succinct takeaway: “There is very little to comment on in this statement.”
INDIGO EXPANDING INTO U.S.
Heather Reisman is taking her retail strategy into the U.S., with Indigo Books & Music set to open its first store south of the border next summer, in an attempt to “replicate its Canadian success.” The announcement was buried in an earnings release late yesterday that showed Indigo’s loss widened in the second quarter amid a modest rise in revenue. The basic questions are whether Indigo will resonate with Americans and why Reisman wants to put her company more directly on Jeff Bezos’s radar. We’ll be mindful of Indigo’s conference call at 9:00 a.m. ET.
OTHER NOTABLE STORIES:
-Algonquin Power & Utilities is setting itself up to go global. It announced a joint venture with Spain-based Abengoa late yesterday, with a plan to develop clean power assets around the world. It’s starting by buying a 25 per cent stake in Atlantica, whose reach extends across Europe, Africa and the Americas. We’ll dive into the strategy with APUC CEO Ian Robertson at 9:45 a.m. ET.
-The Canadian government isn’t going all-in on its economic advisory council’s recommendation on immigration. Minister Ahmed Hussen set new immigration targets for the next couple years, aiming for 340,000 by 2020. That falls well short of the 405,000 previously suggested by Finance Minister Bill Morneau’s high-profile advisory council.
-Textbook understatement by Mark Zuckerberg: “Our business is doing well,” he said in a quarterly release showing advertising revenue surged 49 per cent in the third quarter. In a nod to recent scrutiny, Facebook’s CEO also said “protecting our community is more important than maximizing our profits.”
-Notable earnings: Cenovus, BCE, Cogeco, Bombardier, Enbridge, Canadian Natural Resources, Freshii, Saputo, Gildan Activewear, Fairfax Financial, Genworth MI Canada, Great-West Lifeco, Open Text, SNC-Lavalin, Seven Generations, Apple, Starbucks, Yum Brands
-7:00 a.m. ET: Toronto Real Estate Board releases October sales data
-8:00 a.m. ET: Bank of England releases interest rate decision
-10:00 a.m. ET: Justin Trudeau holds discussion with Alphabet Chair Eric Schmidt in Toronto at Google Go North conference
-2:00 p.m. ET: Trudeau discusses changes to Canada Child Benefit and holds media avail in Brampton, Ontario
Every morning BNN's Managing Editor Noah Zivitz 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.