Here are five things you need to know this morning:
Canada’s two major railways have shut down service after labour talks failed: More than 9,000 workers at Canadian National Railway Co. and Canadian Pacific Kansas City were locked out after the two companies were unable to reach a deal with the Teamsters union. North American supply chains that carry about a billion dollars per day in goods are now at a standstill. CN is calling on the federal government to intervene. Companies and sectors are already warning on the impacts of the shutdown. Grain Growers of Canada estimates the initial impact of the stoppage will cost grain farmers over $43 million a day, with losses expected to escalate to $50 million a day the week after and beyond if the stoppages continue. Toronto-based Chemtrade Logistics Income Fund is warning a rail service stoppage could have a material negative impact on its business results – though the exact impact will depend on the duration of the work stoppage and the length of time for rail service to normalize once it ends.
Money-laundering scandal at TD Bank continues to weigh on the company: TD Bank is setting aside an additional US$2.6 billion to cover fines it expects to pay for failures in its money-laundering controls, and the company sold part of its stake in Charles Schwab Corp. to fund it. Including a US$450 million provision announced in April, the lender now estimates it will pay US$3 billion related to its U.S. compliance lapses. The bank expects that a global resolution will be finalized by calendar year-end. TD says its ownership interest in Schwab will fall to 10.1 per cent from 12.3 per cent after selling 40.5 million shares of the discount broker. Meanwhile, adjusted profit in the bank’s latest quarter missed analysts’ estimates as wealth-management results unperformed expectations amid a surge in insurance claims tied to extreme weather.
Shares of Peloton traded higher in the premarket, as the fitness company’s turnaround plan takes hold: Peloton managed a sales increase for the first time in nine quarters, and dramatically reduced its overall loss. Earlier this year, the company announced a restructuring plan that included raising prices and cutting 15 per cent of its global workforce.
Paramount Global confirmed it received an acquisition proposal from a group led by Edgar Bronfman Jr.: The company will now take two weeks to consider the bid, and any other offers it may receive. There are reports Bronfman’s bid is valued at US$6 billion. Paramount already has a purchase agreement in place with independent producer Skydance Media.
A Canadian company has found the world’s second-largest diamond: Vancouver-based Lucara Diamond Corp. has recovered a massive 2,492-carat diamond from a mine in Botswana, Bloomberg reports. The stone has yet to be thoroughly assessed and it’s unclear whether it will yield the highest-quality gems. Lucara’s Karowe mine is famous for giant stones. In 2015, Lucara found the 1,109-carat Lesedi La Rona, which at the time was the second-largest ever and eventually sold for $53 million. The mine has also yielded an 813-carat stone that fetched a record $63 million. Those two gems were both Type-IIa, the most prized stone.
