Wobbly stock prices are a focus on BNN today as Wall Street and the TSX opened higher despite mounting global tensions.
Major U.S. indices shed one per cent last week after the U.S. missile strike on Syria, marking a policy U-turn for President Donald Trump. Meanwhile, U.S. Vice-President Mike Pence has popped up in the Korean demilitarized zone, talking tough to North Korea, which staged a huge military parade.
BUY ON FEAR
At 9:40 a.m. ET, we’ll be joined by Canaccord Genuity chief market strategist Tony Dwyer, who said last week he’s “looking to buy any fear-based weakness as it develops.” Earnings per share, a fundamental driver for stock prices, are set to climb in the current quarter and should post growth of more than 10 per cent in the first half of the year, he says.
And we’ll delve in the Washington-Pyongyang faceoff at 10 a.m. ET with Tina Park of the Munk School of Global Affairs at the University of Toronto. She noted last summer that dictator Kim Jong-un faces failing support and “fragility” in the social and political elite that props up his rule.
“South Korea is the world's 11th largest economy and the fourth largest in Asia (with an annual GDP of nearly $1.8 trillion), so political stability on the Korean peninsula is in everyone's business interest,” she tells segment producer Ian Vandaelle.
“North Korea, in comparison, is on the brink of collapse in terms of its economy, and trades mainly with China (76 per cent) for both imports and exports. It is a significant player in the underground arms trade and aside from its military threats, we should watch carefully for the future economic ramifications, as the regime has been struggling to survive.”
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STOCK WATCHING
We’re talking showbiz at 8:40 a.m. ET with RBC analyst Steven Cahall, who argues that a monster takeover of Walt Disney (DIS.N) by Apple (AAPL.O) “would create a ~US$1 trillion company with almost limitless opportunities in content and technology.”
Stocks we’re watching include Home Capital (HCG.TO) whose shares dropped nine per cent on Thursday. After the market closed, DBRS said it’s cutting the mortgage lender deeper into junk territory, reducing the senior debt rating to BBB (low) from BBB on “increasing concern over internal pressures at HCG caused by recent changes in the executive management team.” On March 27, the company announced the immediate departure of CEO Martin Reid.
The rating agency also cited regulatory actions. In February the company said it received an enforcement notice from the Ontario Securities Commission regarding 2014 and 2015 disclosures of false income information on some loan applications. “The OSC notice stated that its preliminary conclusion is that the Group failed to meet its continuous disclosure obligations.”
A TO Z
And we’re tracking Arizona Mining Inc (AZ.TO), which is developing the Hermosa zinc project in Arizona. Concerns have been raised that excess manganese could make the zinc more costly to process.
A 43-101 technical report released by AMC Mining Consultants says that “based on indicated grades, the zinc concentrates should be suitable for most zinc smelters; however, elevated levels of manganese may result in the imposition of minor penalties.”
The ever-sardonic mining commentator incakolanews isn’t impressed, warning that “the devil is in the details.”
Arizona Mining said on April 3 that it “has had several positive meetings with concentrate buyers. None of the parties expressed concern about the levels of manganese in the zinc concentrate, and some indicated that there may be a minor penalty levied … No concerns whatsoever have been expressed about the saleability of the zinc concentrate.”
The company, headed by former Barrick Gold (ABX.TO) co-president Jim Gowans is planning a conference call at 11 a.m. ET.
Every morning Commodities host Andrew Bell writes a ‘chase note’ to BNN's editorial staff listing the stories and events that will be in the spotlight that day. Have it delivered to your inbox before the trading day begins by heading to www.bnn.ca/subscribe.