Columnist image
Noah Zivitz

Managing Editor, BNN Bloomberg

|Archive

It’s going to be must-see TV when Jean-Jacques Ruest joins us at 1 p.m. ET, less than 24 hours after CN Rail announced he’s planning to retire as president and chief executive of the company. Timing for his exit is January 2022 – maybe. Depends on how the search for his successor goes. Ruest’s ouster was on the to-do list for the activist investor leading a proxy battle with CN; but the statement from TCI Fund Management makes it clear that it hasn’t been appeased by Ruest’s plans. So, lots to consider in a looming management change that completely stole the quarter’s thunder, despite an adjusted profit and revenue that edged past expectations – and operating expenses that jumped 10 per cent.

INFLATION WATCH

Canada’s inflation rate rose in September to the highest level since February of 2003. The 4.4 per cent year-over-year increase in the consumer price index last month marked an acceleration from August and is bound to stir new concerns about the rapidly rising cost of living in this country and the consequences for the Bank of Canada as it attempts to untangle transitory from non-transitory factors. We’ll have plenty of reaction throughout the day. 

Ahead of the inflation data, we saw a, a sobering reminder of the challenges facing many Canadians: a new Angus Reid Institute survey suggests almost half of Canadians (46 per cent) are finding it difficult or very difficult to cover the costs of feeding their family. And almost eight-in-10 respondents (79 per cent) said their salary hasn't increased enough to compensate for higher food costs.

OIL RALLY PAUSES

After four straight days of gains, West Texas Intermediate crude is slipping in early trading, alongside most of the other energy commodities. In addition to the American Petroleum Institute indicating oil inventories rose by almost 3.3 million barrels last week, Bloomberg News has noted China’s overnight jawboning on the energy crunch. That country’s National Development and Reform Commission said the price of coal “has completely deviated from the fundamentals of supply and demand”, and warned that it’s looking at options to intervene in an attempt to rein in prices. All of this threatens to weigh on the TSX, which set new intraday and closing records yesterday amid a 10-session winning streak.

NETFLIX GUSHES OVER SLATE; INVESTORS UNIMPRESSED

Netflix says this quarter's slate of content is its "strongest offering yet" -- but that comes at a cost. To wit: the streaming giant expects its operating margin will plunge to 6.5 per cent in the fourth quarter from 23.5 per cent in the quarter that just wrapped. As for that third quarter, net paid subscriber additions rose more than expected amid Squid Game’s “mind-boggling” popularity, and Netflix is forecasting subscriber adds will nearly double in Q4. Nonetheless, the company’s shares have been drifting lower in pre-market trading (perspective: the stock has rallied 23 per cent since the start of August).

OTHER NOTABLE STORIES

  • The Ring of Fire bidding war took another twist overnight, as Noront Resources abandoned the recently-favoured offer from Wyloo Metals after BHP chose to raise its offer to $0.75 per share from $0.55. We’ll wait to see if Wyloo folds or raises.
  • Purpose Investments announced this morning that it’s going to launch the world’s first actively-managed cryptocurrency exchange-traded funds. The news comes one day after the debut of America’s first crypto ETF. We spoke with Purpose Founder and CEO Som Seif about that launch. Suffice to say, he wasn’t overly impressed by the product.
  • Hexo announced this morning that it has tapped Scott Cooper as its chief executive and president, wasting little time to fill the void left by the abrupt ouster of Sebastien St-Louis. Cooper most recently served as CEO of Truss, Hexo’s beverage joint-venture with Molson Coors.
  • The Verge is reporting Mark Zuckerberg is planning to announce later this month that Facebook is changing its name (of the company, not the app).
  • Novavax shares have been down more than 25 per cent in pre-market trading after Politico reported the company’s COVID vaccine has encountered problems with purity levels. 
  • Magna International is on our radar after the auto parts manufacturer cut its forecasts for vehicle production in North America and Europe as a result of supply chain problems. Consequently, Magna also lowered its full-year sales and margin expectations. 

NOTABLE RELEASES/EVENTS

  • Notable data: Canadian CPI and Teranet/National Bank home price index
  • Notable earnings: CP Rail, A&W Revenue Royalties Income Fund, IBM, Tesla, CSX, Kinder Morgan, Baker Hughes
  • 9:00: Ontario Labour Minister Monte McNaughton leads announcement in Toronto re. support for truck drivers, couriers, delivery people (NOTE: Temur will monitor for possible follow to his trucker feature)
  • 10:00: Ontario Superior Court resumes hearing Cineworld-Cineplex case
  • 14:00: U.S. Federal Reserve releases Beige Book
  • Two-day Capitalize for Kids conference begins in Toronto