Category: Uncategorized

Economic Calendar: Nov 7 – Nov 11

Monday November 7

China foreign reserves and trade surplus

Germany industrial production

(3 p.m. ET) U.S. consumer credit for September.

Earnings include: Activision Blizzard Inc.; Brookfield Business Partners LP; CT Real Estate Investment Trust; Curaleaf Holdings Inc.; Franco-Nevada Corp.; Marriott International Inc.; Obsidian Energy Ltd.; Toromont Industries Ltd.

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Tuesday November 8

China aggregate yuan financing, new yuan loans and money supply

Japan household spending

(6 a.m. ET) U.S. NFIB Small Business Economic Trends Survey for October.

Also: U.S. midterm elections

Earnings include: Bausch Health Companies Inc.; Boardwalk REIT; B2Gold Corp.; Canadian Apartment Properties REIT; Dream Industrial REIT; Equitable Group Inc.; Finning International Inc.; Freehold Royalties Ltd.; Goeasy Ltd.; Intact Financial Corp.; Keyera Corp.; Lundin Gold Inc.; NexGen Energy Ltd.; Occidental Petroleum Corp.; Parex Resources Inc.; Pioneer Natural Resources Co.; Sierra Wireless Inc.; Walt Disney Co.

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Wednesday November 9

China CPI and PPI

(10 a.m. ET) U.S. wholesale trade for September.

Earnings include: ATS Automation Tooling Systems Inc.; Boyd Group Services Inc.; Brookfield Renewable Corp.; Canopy Growth Corp.; CGI Inc.; Choice Properties REIT; Crombie REIT; E-L Financial Corp.; Element Fleet Management Corp.; Granite REIT; IA Financial Corp. Inc.; Kinross Gold Corp.; Linamar Corp.; Manulife Financial Corp.; Northland Power Inc.; NuVista Energy Ltd.; Osisko Gold Royalties Ltd.; Pan American Silver Corp.; Power Corp. of Canada; Rogers Communications Inc.; Smart REIT; Stella-Jones Inc.; Summit Industrial Income REIT; TransAlta Corp.; Tricon Capital Group Inc.; Tourmaline Oil Corp.; Vermilion Energy Inc.; WSP Global Inc.

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Thursday November 10

Japan machine tool orders

(8:30 a.m. ET) U.S. initial jobless claims for week of Nov. 5. Estimate is 220,000, up 3,000 from the previous week.

(8:30 a.m. ET) U.S. CPI for October. The Street is forecasting a rise of 0.5 per cent month-over-month and 8 per cent year-over-year.

(11:50 a.m. ET) Bank of Canada Governor Tiff Macklem speaks at the Public Policy Forum in Toronto on the evolution of Canadian labour markets

(2 p.m. ET) U.S. treasury budget for October.

Earnings include: Algonquin Power & Utilities Corp.; Altus Group Ltd.; Brookfield Asset Management Inc.; CAE Inc.; Canadian Tire Corp. Ltd.; CCL Industries Inc.; CI Financial Corp.; Definity Financial Corp.; Endeavour Mining Corp.; Exchange Income Corp.; Filo Mining Corp.; First Majestic Silver Corp.; InterRent REIT; Paramount Resources Ltd.; Perseus Mining Ltd.; Primo Water Corp.; Quebecor Inc.; Ritchie Bros Auctioneers; Saputo Inc.; Stantec Inc.

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Friday November 11

Remembrance Day in Canada (stock markets open, bond markets closed)

U.S. Veterans Day (stock markets open, bond markets closed)

Germany CPI

(10 a.m. ET) U.S. University of Michigan consumer sentiment for November (preliminary reading)

Earnings include: Boralex Inc.; Emera Inc.; Hydro One Ltd.; Northwest Healthcare Properties REIT; Onex Corp.; Sprott Inc.

TOURMALINE DELIVERS STRONG CASH FLOW AND FREE CASH FLOW IN Q3 2022, ANNOUNCES INCREASED BASE DIVIDEND AND DECLARES SPECIAL DIVIDEND

HIGHLIGHTS

• Third quarter 2022 before tax cash flow⁽¹⁾⁽²⁾ (“CF”) was $1.056 billion and $1.051 billion after tax ($3.06 per diluted share⁽³⁾), a 38% increase over third quarter 2021 CF.
• Third quarter 2022 free cash flow⁽⁴⁾ (“FCF”) was $568.3 million ($1.65 per diluted share). 
• The Company will pay a special dividend of $2.25/share on November 18 to shareholders of record on November 9 and beginning in Q4, will increase the quarterly base dividend by 11% to $0.25/share providing for an annualized dividend of $1.00/share. Including the payments of both the Q4 special dividend and base dividend, the Company will pay a total of $7.90/share in dividends in 2022, resulting in approximately a 10% yield based on an October 14, 2022 closing share price of $76.51.
• Third quarter 2022 EP capital spending was $468.8 million, within previous guidance.
• Net debt⁽⁵⁾ at September 30, 2022, was $564.6 million, well below the long-term net debt target of $1.0-$1.2 billion. 
• At current strip pricing, full-year 2022 CF of $4.76 billion⁽⁶⁾ is now anticipated ($13.90 per diluted share).
• Tourmaline’s 2023 EP capital program is estimated at $1.6 billion. The 2023 EP program is expected to deliver an annual average production of 545,000 boepd, and CF at strip pricing of $5.4 billion, yielding FCF of $3.7 billion in 2023.

https://www.newswire.ca/news-releases/tourmaline-delivers-strong-cash-flow-and-free-cash-flow-in-q3-2022-announces-increased-base-dividend-and-declares-special-dividend-818997695.html

Nat-Gas Prices Rally On Weather

Dec Nymex natural gas (NGZ22) on Friday closed up +0.425 (+7.11%).

Dec nat-gas prices Friday rallied sharply on the -1.7% sell-off in the dollar index and on colder weather forecasts.  The Commodity Weather Group said that below-normal temperatures would spill into the Central and Eastern U.S. from November 13-17.  

Lower-48 state dry gas production on Thursday was 99.5 bcf (+4.2% y/y), mildly below the record high of 103.6 bcf posted on Oct 3, according to BNEF.  Lower-48 state total gas demand Thursday was 67.4 bcf/day, down -22% y/y, according to BNEF.  LNG net flow to U.S. LNG export terminals Thursday was 11.2 bcf/day, up +3.1% w/w, according to BNEF.

A decline in U.S. electricity output is bearish for nat-gas demand from utility providers.  The Edison Electric Institute reported Wednesday that total U.S. electricity output in the week ended Oct 29 fell -0.6% y/y to 68,883 GWh (gigawatt hours).  However, cumulative U.S. electricity output in the 52-week period ending Oct 29 rose +2.1% y/y to 4,114,400 GWh.

Nat-gas prices have support as EU countries agreed to cut nat-gas demand from Russia by 15% by early 2023.  Also, Russia recently slashed nat-gas exports to Europe to 20% of capacity, putting upward pressure on European nat-gas prices.  Russia has already halted nat-gas shipments to Demark, Finland, Bulgaria, Netherlands, Poland, and Latvia and reduced supplies to Germany for not acceding to its demand for gas payments in Russian rubles.

Nat-gas prices have seen downward pressure from the prolonged outage at the Freeport LNG export terminal, which curbed U.S nat-gas exports and put upward pressure on domestic supplies.   The Freeport terminal accounted for about 20% of all U.S. nat-gas exports before the explosion on Jun 8 knocked it offline.  The Freeport LNG terminal normally receives about 2 bcf, or 2.5%, of the output from the lower 48 U.S. states.  The current projected opening date is Nov 21.

Thursday’s weekly EIA report was bearish for nat-gas prices since it showed U.S. nat gas inventories rose +107 bcf in the week ended Oct 28, above expectations of +102 bcf and well above the 5-year seasonal average gain of +45 bcf.  Inventories remain tight and are -3.7% below their 5-year seasonal average.

Baker Hughes reported Friday that the number of active U.S. nat-gas drilling rigs in the week ended Nov 4 fell by -1 rig to 155 rigs, which was below the 3-1/4 year high of 166 rigs posted in the week ended Sep 9.  Active rigs have more than doubled from the record low of 68 rigs posted in July 2020 (data since 1987).
 

Lowe’s to sell Canadian business, including RONA stores, to private equity firm

Published Nov. 4, 2022 8:09 a.m. CDT

MOORESVILLE, N.C. – 

Lowe’s Companies, Inc. is selling its Canadian retail business to New York-based private equity firm Sycamore Partners for US$400 million plus a performance-based deferred consideration.

Lowe’s Canadian arm is based in Boucherville, Quebec, and operates or services around 450 corporate and independent affiliate dealer stores under a number of banners, including Lowe’s, RONA, Reno-Depot and Dick’s Lumber.

Lowe’s chairman, president and CEO Marvin R. Ellison said the sale is an important step toward simplifying the Lowe’s business model.

The deal, expected to close in early 2023, will establish Lowe’s Canada and RONA as a standalone, Quebec-headquartered company.

Lowe’s bought RONA Inc. in 2016 in a deal valued at $3.2 billion Canadian, or about US$2.4 billion, that at the time it said was a key step in accelerating its growth strategy.

The company’s Canadian retail business makes up around seven per cent of the company’s 2022 sales outlook.

South Korea scrambles jets as North Korea launches 180 flights on border

South Korea launches 80 jets in response to aggressive flight action in North Korea

South Korea scrambled its jets on Friday after North Korea launched some 180 flights near the shared Military Demarcation Line dividing the two nations.

North Korean military forces were detected flying just north of the tactical line, also known as the Armistice Line, which was established in 1953 and formally ended the Korean War, first reported Reuters.

https://www.foxnews.com/world/south-korea-scrambles-jets-north-korea-launches-180-flights-border

House Republicans release 1,000-page report alleging politicization in the FBI, DOJ

Whistleblowers say FBI is ‘rotted at its core’ in Republican report on alleged misconduct

House Republicans released a new report on Friday detailing whistleblower allegations of FBI misconduct and politicization at the highest levels of the Department of Justice. 

“The Federal Bureau of Investigation, under the stewardship of Director Christopher Wray and Attorney General Merrick Garland, is broken,” the GOP report states. “The problem lies not with the majority of front-line agents who serve our country, but with the FBI’s politicized bureaucracy.”

Republicans on the House Judiciary Committee say this report is “the first comprehensive accounting of the FBI’s problems to date, which undermine the FBI’s fundamental law-enforcement mission.” 

The report features testimony from whistleblowers who describe FBI leadership in Washington, D.C., as “rotted at its core.” They allege a “systemic culture of unaccountability” and say the bureau is beset by “rampant corruption, manipulation, and abuse.”

Broadly, the report alleges systemic political bias against conservatives. 

Some allegations were previously disclosed, such as accusations that the FBI is artificially inflating statistics about domestic violent extremism to fit the White House narrative on supposed dangers to democracy, or that counterterrorism authorities were instructed to investigate parents who spoke out at school board meetings.

Other allegations suggest that the FBI is actively seeking to “purge” employees with conservative views and those who dissent from “woke” diversity, equity, and inclusion initiatives. 

Additionally, whistleblowers say the FBI’s “political meddling” “is dragging the criminal side [of the Bureau] down” as resources are “pulled away” from investigating crimes. One whistleblower alleged he was “told that child sexual abuse material investigations were no longer an FBI priority and should be referred to local law enforcement agencies.” 

House Judiciary Committee ranking member Rep. Jim Jordan (R-Ohio) has spoken about several of these allegations for months. He and Senate Judiciary Committee ranking member Sen. Chuck Grassley (R-Iowa) have sent letters to the Justice Department and FBI leadership demanding answers on the whistleblower allegations they have received, and those letters are contained within the report.  

“Americans deserve to have confidence that the enormous power and reach of federal law enforcement will be used fairly and free of any indication of politicization.The FBI has the power, quite literally, to ruin a person’s life — to invade their residence, to take their property, and even to deprive them of their liberty,” the report says. 

“The potential abuse of this power, or even the appearance of abuse, erodes the fundamental principle of equality under the law and confidence in the rule of law. The FBI’s tremendous power is precisely why the people’s elected representatives in Congress must conduct vigorous oversight, particularly in light of allegations of abuse and misconduct made to date.” 

Oil climbs 3% as U.S. dollar slips, EU ban on Russian oil looms

Oil rose by more than 3 per cent on Friday as the dollar eased, with an EU ban on Russian oil looming large and investors weighing the prospects for an easing of China’s COVID curbs.

Though fears of global recession capped gains, Brent crude futures were up $3.29, or 3.48 per cent, at $97.96 a barrel by 1203 GMT, set for a weekly gain of more than 2 per cent.

U.S. West Texas Intermediate (WTI) crude futures were up $3.52, or 3.99 per cent, at $91.69 and on course for a weekly gain of more than 4 per cent.

Both contracts were supported by a weaker dollar, which can boost oil demand because it makes the commodity cheaper for those holding other currencies.

While demand concerns weighed on the market, supply is expected to remain tight because of Europe’s planned embargoes on Russian oil and a slide in U.S. crude stockpiles.

“The slight weakness in the dollar, the upcoming ban on Russian oil sales are certainly supportive as focus is shifting from recession fears to supply issues,” said PVM Oil Associates analyst Tamas Varga.

“The main catalyst, however, is reports that China may ease its zero-Covid restrictions, which would be a boon to its economy and oil demand.”

The EU ban on Russian crude imports is due to take effect from Dec. 5. Details of G7 price capaimed at alleviating constraints on Russian flows outside the EU are still under discussion.

China, meanwhile, is sticking to its strict COVID-19 curbs after cases rose on Thursday to their highest since August, but a former Chinese disease control official said substantial changes to the country’s COVID-19 policy are to take place soon.

On the bearish side, fears of a recession in the United States, the world’s biggest oil consumer, grew on Thursday after Federal Reserve Chairman Jerome Powell said it was “very premature” to be thinking about pausing interest rate hikes.

“The spectre of further rate hikes dimmed hopes of a pick-up in demand,” ANZ Research analysts said in a note.

The Bank of England warned on Thursday that it thinks Britain has entered a recession and the economy might not grow for another two years.

Underscoring demand concerns, Saudi Arabia lowered December official selling prices (OSPs) for its flagship Arab Light crude to Asia by 40 cents to a premium of $5.45 a barrel versus the Oman/Dubai average.

The cut was in line with trade sources’ forecasts, which were based on a weaker outlook for Chinese demand.

Looking into next week, investors are awaiting the U.S. Energy Information Administration’s short-term energy outlook and the November U.S. Consumer Price Index for insight on the pace of inflation.

Canadian auto parts maker Magna lowers annual sales forecast on higher utility costs

Canadian auto parts maker Magna International Inc MG-T +1.92%increase cut its annual sales forecast on Friday, as supply chain snags and higher utility costs keep vehicle production under pressure.

Europe’s energy crisis has exacerbated power and logistics costs for auto firms, while coronavirus-related restrictions in China have disrupted production.

Automakers have flagged that inflation is beginning to take a toll on their balance sheets as they struggle with parts shortage, escalating raw material and energy costs, and soaring inflation.

Magna now sees its annual sales in the range of $37.4-billion and $38.4-billion, compared with its prior forecast of $37.6-billion and $39.2-billion.

The Aurora, Canada-based manufacturer posted a net income of $289-million, or $1 per share, in the third quarter ended Sept. 30, compared with $11-million, or $0.04 share, a year earlier.

Enbridge’s third-quarter profit rises on higher energy demand

Canada’s Enbridge Inc ENB-T +1.11%increase reported a higher third-quarter adjusted profit on Friday, delivering higher shipments on its oil and gas pipelines amid surging energy demand since Russia’s invasion of Ukraine.

Canada, the world’s fourth-largest crude producer, has been seeking ways to boost pipeline utilization amid a jump in U.S. LNG export volumes to Europe following Russia’s invasion of Ukraine.

Enbridge, which moves about 30 per cent of the crude oil produced in North America and nearly 20 per cent of the natural gas consumed in the United States, said it delivered nearly 3 million barrels of oil per day (bpd) on its Mainline system, compared to 2.7 million bpd a year ago.

Enbridge separately announced it received strong interest from producers bidding for capacity on its T-South section of the B.C. Pipeline system running from near Chetwynd, British Columbia (B.C.) and extending to the Canada-U.S. border at Huntingdon-Sumas.

It will also launch an open season to get bids for the T-north segment of the B.C. system.

“It’s clear that the world needs all forms of energy to meet future demand, especially in the context of the energy security, reliability, and affordability challenges,” said Enbridge Chief Executive Officer Al Monaco, who will step down from the top job in January after 11 years in charge.

The Calgary-based company’s adjusted earnings rose to C$1.4-billion ($1.03-billion), or 67 Canadian cents per share, in the three months to Sept. 30, from C$1.2-billion, or 59 Canadian cents per share, a year earlier.