Apr 25, 2018
BNN's Daily Chase: Global stocks under pressure; Enbridge sticks to its guns on Line 3
By Noah Zivitz
Global stocks are joining the slide that started on Wall Street yesterday after the 10-year U.S. Treasury yield crossed 3 per cent, an important psychological threshold that kicked off a round of worry about rising borrowing costs. All the major European indices are trading lower and futures are pointing to a weak open in New York after the Dow Jones Industrial Average’s 424-point drop yesterday (which was also fueled by cautionary outlooks from Caterpillar and 3M). We’ll address the implications for your portfolio this morning with a deep roster of investment professionals, including Fiera Capital’s Candice Bangsund, who recently called for an upturn on the TSX . She joins us at 9:35 a.m. ET.
ENBRIDGE UNDETERRED ON LINE 3
Enbridge is sticking to its guns on Line 3 after a Minnesota judge said the pipeline replacement should be built along the existing route. "We don't agree with [the judge's] recommendation and Enbridge continues to believe our preferred route is the best route for Minnesota when all factors are considered," it said in a statement late yesterday afternoon. It's an extra dose of uncertainty for investors to consider in a year that's already seen Enbridge's stock plunge 23.4 per cent.
CENOVUS HAMPERED BY HEDGES
The big oil sands player posted a near-billion dollar loss in what looks like a noisy first quarter. Notably, the company suffered a $469-million "realized risk management loss" thanks to hedges that didn't work in its favour. But CEO Alex Pourbaix says "financial challenges are temporary and don't reflect Cenovus's significant potential for funds flow and earnings growth." We'll learn more about the outlook when Tara Weber speaks with Pourbaix around 12:00 p.m. ET.
IN CONVERSATION WITH TERRY MATTHEWS
We caught up with Terry Matthews this morning for our first conversation with him in quite some time. We discussed his decision to sell Mitel to Searchlight Capital, and also delved into his views on Canada’s tech scene and this country’s competitiveness.
OTHER NOTABLE STORIES
-Bombardier’s rail division notched a win today, announcing a deal to supply Brussels’ transportation company with up to 175 trams. The agreement is valued at US$586 million.
-One of yesterday's big drags on the Dow is shaping up to have at least a partial reversal today. Boeing easily topped first-quarter profit expectations and has raised its full-year outlook. BA shares are trading higher in the pre-market.
-Shares of Twitter are surging in pre-market trading (+11 per cent at last look) after first-quarter revenue and profit beats. The stock is also getting helped higher by a second-quarter adjusted profit forecast that outpaces the average estimate.
-Tim Cook has a meeting scheduled with Donald Trump this afternoon, with Bloomberg reporting the American president’s tariff tit-for-tat with China will factor prominently in the conversation
NOTABLE RELEASES/EVENTS
-Notable earnings: Goldcorp, Canfor, West Fraser Timber, Lundin Mining, Aecon, Toromont Industries, Boeing, Ford, Twitter, Facebook, eBay, Visa, AT&T
-9:30 a.m. ET: Environment and Climate Change Minister Catherine McKenna announces members of Just Transition Task Force (background here: https://www.canada.ca/en/environment-climate-change/news/2018/02/just_transition_taskforce.html)
-10:00 a.m. ET: GE holds annual meeting
-1:45 p.m. ET: Apple CEO Tim Cook meets with U.S. President Donald Trump in the Oval Office
-4:15 p.m. ET: Bank of Canada Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins testify before Senate Banking Committee in Ottawa
-4:15 p.m. ET: Parliamentary Secretary Bill Blair appears before Senate Legal and Constitutional Affairs Committee to discuss Bill C-45
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.
