After waiting more than 24 hours since Prime Minister Justin Trudeau announced his unprecedented use of the Emergencies Act, the detailed regulations were finally published in the Canada Gazette last night. Notably for our purposes, more than a dozen types of financial entities are being told that they “must determine on an ongoing basis” whether they are managing assets for blockade participants who are targeted by law. And while Deputy Prime Minister Chrystia Freeland focused her remarks on Monday on banks, insurers, crowdfunding platforms and payment systems, the law also covers players in the investment industry such as asset managers. portfolio and “investment advisory services“. The law also guarantees the immunity of these entities from civil suits. And now we’ll dig even deeper into the reaction of the financial industry.
INFLATION DAY IN CANADA
Inflation unexpectedly climbed to a new multi-decade high in January. Statistics Canada’s Consumer Price Index rose 5.1% year over year last month, beating expectations, marking an acceleration from December and was the reading highest since inflation soared 5.5% in September 1991. According to data tracked by Bloomberg, markets are now pricing in at least seven rate hikes by the Bank of Canada this year, with the takeoff seen as a blockage for the next month.
SHOPIFIER AT THE MICROSCOPE
Shopify beat earnings, gross merchandise volume and revenue expectations in the fourth quarter. Yet its shares are falling in premarket trading. One potential explanation: The company warned that revenue growth will be weaker in the first quarter, partly due to base effects, as it does not expect a continuation of the e-commerce acceleration triggered by the COVID which she benefited from last year. Given that a few weeks ago the market was concerned about Shopify’s fulfillment strategy, we’ll highlight here that it said it was going to consolidate its fulfillment operations into larger facilities and that he intended to further exploit this business itself.
BARRICK REDEMPTION OF SHARES
The gold miner this morning announced a dividend increase and a share buyback program, alongside free cash flow that jumped 49% in the fourth quarter. The quarterly payout will increase by one cent to US$0.10 per share and Barrick’s board has also authorized US$1 billion for share buybacks. Managing Director Mark Bristow joins us shortly after 8 a.m.
OTHER NOTABLE STORIES
- WestJet confirmed this morning that Alexis von Hoensbroech took over as CEO of the airline. His appointment was announced in December, pending the completion of the immigration process.
- West Fraser Woods increases its quarterly dividend by 25% to US$0.25 per share despite some cautious messages in its latest quarterly report. The wood products company said it was still struggling with shipping issues stemming from flooding in British Columbia, with volumes down 20% last month from year-ago levels. . The company’s sales and earnings were better than expected in the fourth quarter amid sequential weakness in its engineered wood products units in North America and Europe.
- Canfor blames lack of wood supply for decision announcement late yesterday to reduce the production capacity of a sawmill in British Columbia. He said 70 employees would lose their jobs as a result.
- Ericsson Shares fell nearly 12% in Stockholm this morning after the networking equipment maker said it uncovered “serious breaches” of its compliance rules in Iraq from 2011 to 2019. Much attention is being focused on the admission that some payments may have been made to the Islamic State.
- Behavioral changes spurred by the pandemic are evident in the latest results from Airbnb. The company said 20% of nights booked in the fourth quarter were for stays of a month or longer, and nearly half of nights booked in the quarter were for stays of a week or longer. And those longer stays have paid off, with fourth-quarter revenue and gross booking value up more than 30% from the pre-pandemic period of two years ago. Airbnb also made a profit in the quarter.
NEWS RELEASES / NOTABLE EVENTS
- Notable data: Canadian CPI, wholesale trade and manufacturing sales; US retail sales; CPI China
- Notable Profits: Shopify, Barrick Gold, Nutrien, Keyera, Kinross Gold, Choice Properties Real Estate Investment Trust, Cisco Systems, Nvidia, Kraft Heinz, DoorDash, Hilton Worldwide Holdings, Hyatt Hotels
- 900: Parliamentary Budget Officer releases cost notes on ‘temporary expansion of Local Lockdown Program eligibility’ and ‘Canada Lockdown Workers Benefit (CWLB) under expanded eligibility’
- 900: Ontario’s Financial Accountability Office Releases Report on Provincial Power and Energy Subsidy Programs
- 1:30 p.m.: Bank of Canada Deputy Governor Timothy Lane delivers a speech (“Central Bank Decision-Making in Turbulent Times”) to the School of Public Policy at the University of Calgary
- 2:00 p.m .: The US Federal Reserve publishes the minutes of the last meeting
- 3:45 p.m.: Alberta Premier Jason Kenney delivers keynote speech at the Newcomer Equity Summit (no longer available at 4:40 p.m.)