RBC beats amid record full-year profit one day after short seller takes aim
RBC takes the spotlight today as bank earnings season enters a second day. Canada’s biggest bank beat expectations by a nickel in the fourth quarter, capping a year that saw total profit hit a record $11.47 billion. The backdrop here is the short call made by Atlanta-based PAA Research yesterday that took direct aim at Canada’s largest lender, with a $70 price target. Our full interview with PAA’s Bradley Safalow is here. Also worth pointing out David Dodge’s words of warning for anyone who dares to bet against Canada’s banks. “Those who short Canadian banks have historically lost money,” the former Bank of Canada governor told BNN. “And I think they will lose money going forward on that as well.”
BITCOIN HITS US$11,000
The cryptocurrency punched through the US$10,000 threshold yesterday evening,and cracked US$11,000 shortly before 9:00 a.m. ET Wednesday, extending a remarkable run that has carried it from just over US$700 this time last year. Where do we go from here? Is it too late to get in? Will institutional money change its tune? (Remember what Ontario Teachers’ Pension Plan’s CIO told us about steering clear because there’s a “lot of drug money” sloshing around in Bitcoin)? And how will regulators adapt? Note that the world’s soon-to-be most powerful banker, Jerome Powell, said just yesterday Bitcoin isn’t nearly big enough to impact U.S. Federal Reserve policy. At what point would that change? Those are some of the questions we’ll try to answer today.
Rachel Notley’s NDP government says things are “looking up” in Alberta, with the provincial economy on track to grow four per cent this year. Even so, it’s still staring at a $10.3-billion deficit – and that just prompted credit rating agency DBRS to downgrade the province to AA from AA (high) with a negative outlook, citing the lack of “any real willingness to address the weakest budget outlook among all provinces, despite high levels of per capita spending and the lowest tax burden in the country. DBRS is concerned that the plan to return to balance relies on a recovery in resource revenues, rather than fundamental adjustments to the budget.”
KINDER MORGAN NEB HEARING
The National Energy Board is convening a hearing today after Kinder Morgan asked the regulator to intervene in the pipeline company’s ongoing dispute with the City of Burnaby over construction of the Trans Mountain expansion project. The proceedings get underway today at 2:30 p.m. ET.
TAX TRUMPS NORTH KOREA FOR NOW
North Korea’s latest intercontinental ballistic missile test isn’t fazing investors, who are more keenly focused on tax-reform progress in D.C. Global stocks are mostly trading higher and the Dow Jones Industrial Average is coming off its best day since September after the Republicans’ tax plan cleared a key Senate committee vote (and amid optimism over Powell’s remarks yesterday afternoon). The bill still faces hurdles, but for now it’s distracting investors from the ICBM and U.S. Defense Secretary Jim Mattis’s warning that Pyongyang “can threaten everywhere in the world, basically.
OTHER NOTABLE STORIES:
-NBC Today Show host Matt Lauer has been fired after management reviewed "a detailed complaint from a colleague about inappropriate sexual behaviour in the workplace."
-TSX record high watch: 16,131.79 is the all-time high set on November 7.
-The Toronto Star is reporting Justin Trudeau will reveal his Supreme Court nominee today at an event hosted by the University of Ottawa’s law school
-Notable earnings: RBC, Tiffany
-Notable data: U.S. GDP
-7:00 a.m. ET: Environment and Climate Change Minister Catherine McKenna delivers remarks at Toronto Board of Trade
-8:30 a.m. ET: StatsCan releases census data on labour, education and work commutes
-10:00 a.m. ET: U.S. Federal Reserve Chair Janet Yellen testifies before U.S. Congressional Joint Economic Committee
-11:00 a.m. ET: Microsoft holds annual general meeting
-2:00 p.m. ET: U.S. Federal Reserve releases Beige Book
-2:30 p.m. ET: National Energy Board holds Trans Mountain Expansion hearing
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.