TOP NEWS
• Canada's Trudeau hangs onto power in election; aides see two-year respite
Canadian Prime Minister Justin Trudeau hung onto power after an election on Monday
that saw his government reduced to a minority, but aides predicted he
would be able to govern for two years without many problems.
• Chinese vice foreign minister says progress made in trade talks with U.S.
China and the United States have achieved some progress in their trade
talks, Vice Foreign Minister Le Yucheng said, and any problem could be
resolved as long as both sides respected each other.
• Brexit in the balance as Johnson faces crunch votes
Prime Minister Boris Johnson faces two pivotal votes in parliament that
will decide if he can deliver on his promise to lead the United Kingdom
out of the European Union in nine days' time.
• Biogen to seek U.S. approval for Alzheimer's drug; shares jump
Biogen is planning to file for U.S. regulatory approval for its
Alzheimer's treatment aducanumab after fresh analysis of its clinical
trial showed promise, the drugmaker said, sending its shares up.
• Strong e-commerce demand powers UPS quarterly profit beat
United Parcel Service reported a quarterly profit that came ahead of
Wall Street estimates , benefiting from strong e-commerce demand and
rival FedEx’s breakup with Amazon.com.
BEFORE THE BELL
Canada’s main stock index futures were higher after the ruling Liberal government
of Justin Trudeau held onto power but with a minority government. U.S. stock index futures were slightly higher, while European shares flitted
between gains and losses as investors digested corporate earnings and eyed latest developments on U.S.-China trade talks. China stocks rose, supported by tech firms and Hong
Kong stocks ended higher. Meanwhile, the euro edged lower after rising to a two-month high in the previous session versus the U.S.
dollar. The pound was steady as traders waited for the British parliament to vote on the Withdrawal Agreement Bill. Oil prices
rose and gold prices edged higher. Data on retail sales is scheduled on economic calendar.
STOCKS TO WATCH
• Bombardier Inc (BBDb). The company on Monday
unveiled its revamped Liberty Learjet 75 corporate plane, betting
that extra legroom and a lower price tag would help the Canadian
company beat back competition from Embraer’s market leading model.
Bombardier and Embraer are both turning to their corporate jet divisions
for growth after shedding control of their commercial
aviation programs. "It's more space, and more performance (than
competitors) with similar cost and operating cost," Mischa Loeffler,
manager for product planning at Bombardier Aviation told Reuters at Monday's
unveiling of a mock-up model of the plane for
the news media. Bombardier is expanding its offering of higher-margin,
large-cabin business jets, with the launch of the Global 7500, 6500 and
5500 to compete with top-of-the-line models from rivals Gulfstream and
France's Dassault Aviation.
INSIGHT
Canada's
oil and gas sector wary of left-leaning parties in minority government
Canada's energy industry saw its worst-case election result materialize on Monday
as the Liberals failed to secure a majority government, leaving them in
need of support from left-leaning parties that are opposed to new oil
pipelines.
ANALYSTS' RECOMMENDATION
• AltaGas Canada Inc (ACI). CIBC raises target price to C$33.5 from C$31, viewing the buyout offer from a consortium
including PSP Investments and Alberta Teachers' Retirement Fund Board as attractive.
• Dorel Industries Inc (DIIb).
RBC cuts target price to C$6 from C$14, ahead of Q3 reporting, based on
the ongoing U.S.-China trade tensions and a negative forex impact
resulting from a rising
U.S. dollar.
• Orla Mining Ltd (OLA). CIBC raises rating to outperformer from neutral, factoring the progress on Camino Rojo Oxide Project development.
ECONOMIC EVENTS (All timings in U.S. Eastern Time)
0830 Retail sales mm for Aug: Expected 0.4%; Prior 0.4%
0830 Retail sales ex-autos mm for Aug: Expected 0.1%; Prior -0.1%
1030 (approx.) Business outlook future sales for Q3: Prior 23%
1030 (approx.) BoC senior loan officer opinion survey for Q3: Prior -5.76%
COMPANIES REPORTING RESULTS
October 22:
Canadian National Railway Co (CNR). Expected Q3 earnings of C$1.62 per share
October 23:
Agnico Eagle Mines Ltd (AEM). Expected Q3 earnings of 30 cents per share
Canadian Pacific Railway Ltd (CP). Expected Q3 earnings of C$4.52 per share
Canfor Corp (CFP). Expected Q3 loss of 40 Canadian cents per share
FirstService Corp (FSV). Expected Q3 earnings of $1.03 per share
Lundin Mining Corp (LUN). Expected Q3 earnings of 7 cents per share
Rogers Communications Inc (RCIb). Expected Q3 earnings of C$1.31 per share
CORPORATE EVENTS (All timings in U.S. Eastern Time)
1130 West Fraser Timber Co Ltd (WFT). Q3 earnings conference call
1630 Canadian National Railway Co (CNR). Q3 earnings conference call
EXDIVIDENDS
There are no major exdivs for the day.
(All analysts' estimates are according to I/B/E/S Refinitiv data.)
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