Here are five things you need to know this morning:
U.S. dockworkers on strike: The largest labour disruption by U.S. portworkers in almost a half-century is underway this morning, after nearly 50,000 longshoremen walked off the job at midnight. Their union, the International Longshoremen’s Association, rejected an 11th hour offer yesterday that would have averted the planned shutdown of just about every major port of consequence up and down the U.S. Eastern Seaboard and Gulf Coast. While the shutdown has been as easy to spot and as fast moving as a massive container ship slowly approaching on the horizon, it’s still hard to downplay the impact of the strike. One estimate this morning puts the economic toll of the strike at up to US$4 billion per day, and the price tag will go up the longer it goes on. For every day that ships pile up offshore, it will take between six to 10 days to eventually clear the backlog, which means if this thing goes on for a month, we could be feeling the impact into next summer. Or it could be over by the weekend – stay tuned.
Fairfax buys up control of Bauer owner: Fairfax has struck a deal with the Desmarais-controlled investment firm Sagard to buy Peak Achievement, the holding company that owns athletic equipment brands including Bauer Hockey, Cascade and Maverick. Fairfax already owned 40 per cent of the company but is buying up the rest. The two companies first partnered up to buy Peak when it restructured following bankruptcy in 2016 for $575 million. Financial terms of the new deal were not disclosed.
TD agrees to US$20M fine in U.S. ‘spoofing’ matter: TD Bank shares will be one to watch today as the lender has struck a deal with U.S. regulators to settle a market manipulation case. According to court papers filed in New Jersey, the bank has entered into a three-year deferred prosecution agreement to end criminal and civil probes into “hundreds of fraudulent spoof orders amounting to tens of billions of dollars of false supply and demand.” Spoofing is the common term for essentially making up bogus buy and sell orders for a security in order to manipulate the price, but then cancelling them before executing them. The documents allege a former trader at the bank was engaged in the phony practice between 2018 and 2019, although the trader himself has pleaded not guilty in a separate case.
CVS mulling options: We’re keeping an eye on shares in U.S. drug chain CVS this morning after the company said it is conducting a strategic review of options including breaking itself in two. In addition to its eponymous drug store chain, the company also owns the Aetna health insurance business. Two thirds of the company’s revenue comes from the retail unit, which is facing the same pressures of many brick and mortar companies. Aetna makes up the other third, which has its own problems, in the form of rising costs.
TSX just finished its best quarter since 2020: Canada’s benchmark stock index just quietly finished its best quarter since the pandemic began, with the S&P/TSX Composite Index cranking out a 9.7 per cent gain between July and September. All 11 subindices rose during the period, as sectors that did well during the era of rising rates mostly held their own, while sectors that benefit from rate cuts such as real estate and utilities showed strong gains. The TSX crossed the 23,000-point level for the first time in July, and topped 24,000 for the first time last week.
