TOP NEWS
• Blip or bad moon rising? Fed meets amid COVID-19 surge, inflation jitters
The Federal Reserve will conclude its latest policy meeting on Wednesday
weighing the risks of a COVID-19 resurgence in the United States and a
potentially slower economic recovery against a developing inflation
threat that had been its main focus.
• Trudeau to gamble on vaccinations, economic rebound in likely September snap vote
Canada's Liberal Prime Minister Justin Trudeau is poised to trigger a
snap election two years ahead of schedule, betting that high vaccination
rates and a post-pandemic rebound will help him prolong and strengthen
his grip on power.
• Pfizer raises estimates for 2021 sales of COVID-19 vaccine to $33.5 billion
Pfizer raised its forecast for sales of the COVID-19 vaccine that it
developed with Germany's BioNTech by 28.8% to $33.5 billion, as
countries scramble to secure supply of the shots.
• Loblaw beats revenue estimates on robust grocery demand
Canadian retailer Loblaw beat market estimates for quarterly revenue, as
consumer demand for groceries and other essentials stayed robust during
the COVID-19 pandemic.
• Summer's gasoline recovery could fizzle on rising infection cases
The summer rebound in global fuel demand could be turning into a
slowdown, as analysts expect gasoline consumption to taper off due to
resurgent coronavirus cases and structural changes in commuting
patterns.
BEFORE THE BELL
Futures for Canada's main stock index fell, as investors awaited inflation data to gauge the pace of economic recovery. U.S. stock index
futures were muted, while investors were in a wait-and-watch mode ahead of the Federal Reserve's monetary policy decision. European stocks gained on encouraging earnings reports.
Japan’s Nikkei fell, as concerns about rising coronavirus cases soured sentiment. Gold prices held steady as investors
held back from making large bets and the U.S. dollar firmed. Oil rose ahead of an industry report expected to show U.S.
crude inventories fell more than expected.
STOCKS TO WATCH
Results
• Intact Financial Corp:
Canada's biggest property and casualty insurer handily beat
second-quarter profit estimates on Tuesday as premiums grew 29%, driven
in part by the company's acquisition
of British insurance group RSA. Intact posted operating income of C$515
million, or C$3.26 a share, up from C$350 million, or C$2.35 a share, a
year earlier. Analysts had expected C$2.44 a share, according to
Refinitiv data. Intact's purchase of RSA's Canada,
UK and international operations, which closed on June 1, also helped
boost net investment 9% year-on-year to C$154 million, and book value
per share by the 44%, the Canadian insurer said. The company posted net
income of C$573 million, or C$3.59 a share, versus
C$263 million, or C$1.74, a year earlier.
• Loblaw Cos Ltd:
The Canadian retailer beat market estimates for quarterly revenue, as
consumer demand for groceries and other essentials stayed robust during
the COVID-19 pandemic. Loblaw
has performed strongly over the past year as coronavirus-led lockdowns
prompted stuck-at-home customers to stock up groceries and other
essentials. The company said it expects the resurgence in COVID-19
cases, which has triggered fresh lockdowns and strict
distancing measures in several parts of Canada, to continue to boost
its grocery sales. Net earnings available to common shareholders rose to
C$375 million, or C$1.09 per share, for the quarter ended June 19 from
C$169 million, or 47 Canadian cents per share,
a year earlier.
Deals Of The Day
• Restaurant Brands International Inc: Buyout fund Cinven has
bought a majority stake in Restaurant Brands International's
unit in the Iberian peninsula, in a deal valuing RB Iberia at 1 billion
euros ($1.18 billion), the companies said in a joint statement. The
founders of Restaurant Brands Iberia and Burger King Europe GmbH - the
European branch of the fast-food chain - will
retain a minority stake in the Iberian unit, and the current executive
team will stay in place, the statement added. Spaniards' growing
appetite for restaurant meals and fast food, and the pandemic-induced
boom in digital food delivery are favourable market
trends able to shore up substantial growth for RB Iberia, the companies
said. "This is an attractive opportunity for primary investment: (RB
Iberia) has a solid strategic position in the growing market of fast
food in the Iberian peninsula and we're delighted
to join forces... to accelerate its growth," Cinven partner Jorge
Quemada said.
In Other News
• Lundin Mining Corp:
Chile's environmental regulator said on Tuesday that it had filed
charges against the Canadian miner's Candelaria copper mine for breaches
in its operational permits,
including violations related to its blasting operations. The Andean
country's environmental regulator, SMA, said it had received a number of
complaints from local residents and that it expected the mining company
to address those complaints along with its
own demands in a compliance plan. Another serious charge, the SMA said,
related to the company's failure to comply with a 2018 agreement to
reduce the water consumption of its treatment plant, amid a long-running
drought in the region. The mining company said
in a statement that it was analyzing the charges to determine its next
steps. "Minera Candelaria always complies with current legislation, with
the applicable environmental and sector authorizations, and reiterates
its unbridled commitment to the development
of responsible mining," it said.
• Shopify Inc:
The company has filed for an up to $10 billion mixed shelf offering,
which gives Canada's most valuable company the flexibility to raise
funds by the issuance of a range of
securities, including debt and equity, the company said on Tuesday.
Ottawa-based Shopify, which is Canada's largest e-commerce platform,
made the disclosure in a filing with the U.S. Securities and Exchange
Commission. Shopify said the use of proceeds from
any expected offering will be set forth in the applicable supplementary
prospectus relating to the offering. These include class A shares,
preferred shares, warrants, and debt securities, among others. The
filing also said the company "will not receive any
proceeds from any sales of Securities offered by a selling
securityholder."
COLUMN
Markets
tire of anti-dollar bet as central banks diverge: Mike Dolan
After 16 months of betting against the U.S. dollar, currency speculators
appear to have thrown in the towel. Whether that's positive or negative
for the world's biggest reserve currency is always a moot point.
Extreme positioning often proves to be a contrary
signal revealing more about stretched, overcrowded trades than a
direction of travel.
ANALYSTS' RECOMMENDATION
• AutoCanada Inc:
Canaccord Genuity raises target price to C$60 from C$58, believing it
will be the strongest second-quarter results from AutoCanada in its
operating history.
• Suncor Energy Inc:
JPMorgan cuts target price to C$32 from C$34, assuming flattish total
company opex over the long-term, as the industry could face offsetting
inflation headwinds in this
higher price environment, while company specific execution has also
been challenged
• Teck Resources Ltd:
Scotiabank cuts target price to C$35 from C$36, after the company
reported slightly weaker than anticipated second-quarter results and
disclosed several relatively minor
downward revisions to guidance.
ECONOMIC EVENTS (All timings in U.S. Eastern Time)
0830 (approx.) CPI inflation mm for June: Expected 0.4%; Prior 0.5%
0830 (approx.) CPI inflation yy for June: Expected 3.2%; Prior 3.6%
0830 (approx.) CPI BoC core yy for June: Prior 2.8%
0830 (approx.) CPI BoC core mm for June: Prior 0.4%
0830 (approx.) CPI mm SA for June: Prior 0.4%
0830 (approx.) Core CPI mm SA for June: Prior 0.4%
0830 (approx.) CPI median for June: Prior 2.4%
0830 (approx.) CPI trim for June: Prior 2.7%
0830 (approx.) CPI common for June: Expected 1.9%; Prior 1.8%
0830 (approx.) CPI NSA for June: Prior 141.0
0830 (approx.) CPI yy SA for June: Prior 3.54%
COMPANIES REPORTING RESULTS
July 28:
Agnico Eagle Mines Ltd: Expected Q2 earnings of 58 cents per share
Alamos Gold Inc: Expected Q2 earnings of 11 cents per share
ARC Resources Ltd: Expected Q2 earnings of 20 Canadian cents per share
Baytex Energy Corp: Expected Q2 earnings of 7 Canadian cents per share
Cameco Corp: Expected Q2 loss of 6 Canadian cents per share
Canadian Pacific Railway Ltd: Expected Q2 earnings of C$1.01 per share
CGI Inc: Expected Q3 earnings of C$1.35 per share
Crescent Point Energy Corp: Expected Q2 earnings of 22 Canadian cents per share
Equitable Group Inc: Expected Q2 earnings of C$3.81 per share
GFL Environmental Inc: Expected Q2 earnings of 10 Canadian cents per share
Kinross Gold Corp: Expected Q2 earnings of 13 cents per share
Kirkland Lake Gold Ltd: Expected Q2 earnings of 84 cents per share
Loblaw Companies Ltd: Expected Q2 earnings of C$1.21 per share
Lundin Mining Corp: Expected Q2 earnings of 31 cents per share
Methanex Corp: Expected Q2 earnings of $1.17 per share
Real Matters Inc: Expected Q3 earnings of 13 cents per share
Shopify Inc: Expected Q2 earnings of 97 cents per share
Suncor Energy Inc: Expected Q2 earnings of 48 Canadian cents per share
Toromont Industries Ltd: Expected Q2 earnings of 98 Canadian cents per share
Tourmaline Oil Corp: Expected Q2 earnings of 63 Canadian cents per share
West Fraser Timber Co Ltd: Expected Q2 earnings of $10.8 per share
July 29:
AltaGas Ltd: Expected Q2 earnings of breakeven per share
Atco Ltd: Expected Q2 earnings of 60 Canadian cents per share
Canadian Utilities Ltd: Expected Q2 earnings of 39 Canadian cents per share
Canfor Corp: Expected Q2 earnings of C$5.07 per share
Dundee Precious Metals Inc: Expected Q2 earnings of 37 cents per share
Eldorado Gold Corp: Expected Q2 earnings of 13 cents per share
Fairfax Financial Holdings Ltd: Expected Q2 earnings of $9.61 cents per share
Fortis Inc: Expected Q2 earnings of 59 Canadian cents per share
iA Financial Corporation Inc: Expected Q2 earnings of C$1.97 per share
TC Energy Corp: Expected Q2 earnings of 96 Canadian cents per share
Turquoise Hill Resources Ltd: Expected Q2 earnings of 34 cents per share
Whitecap Resources Inc: Expected Q2 earnings of 12 Canadian cents per share
Yamana Gold Inc: Expected Q2 earnings of 6 cents per share
CORPORATE EVENTS (All timings in U.S. Eastern Time)
0800 Cameco Corp: Q2 earnings conference call
0900 CGI Inc: Q3 earnings conference call
0900 First Quantum Minerals Ltd: Q2 earnings conference call
1000 Loblaw Companies Ltd: Q2 earnings conference call
1000 First National Financial Corp: Q2 earnings conference call
1000 Real Matters Inc: Q3 earnings conference call
1100 Tamarack Valley Energy Ltd: Q2 earnings conference call
1100 Intact Financial Corp: Q2 earnings conference call
1130 Capstone Mining Corp: Q2 earnings conference call
1200 Crescent Point Energy Corp: Q2 earnings conference call
1630 Canadian Pacific Railway Ltd: Q2 earnings conference call
EX-DIVIDENDS
There are no major exdivs for the day.
(All analysts' estimates are according to I/B/E/S Refinitiv data) |