Here are five things you need to know this morning:
U.S. CPI comes in at 2.6%, as expected: Inflation in the U.S. rose at a 2.6 per cent pace in the year up to October, while the core rate, which strips out volatile items, went up at a 3.3 per cent tempo. New numbers from the U.S. Bureau of Labor Statistics this morning came in almost exactly in line with analyst expectations. Shelter inflation made up about half of the overall increase by itself, while prices for things like car insurance and apparel were a drag to the downside. Though most of the headline numbers were in line with expectations, investors slightly increased their bets for a rate cut next month after the numbers came out, with the swaps market now implying about a two-in-three chance of a cut. (As of yesterday, those odds were essentially fifty-fifty)
7-Eleven owner mulls buyout offer from founding Ito family: The takeover story at 7-Eleven owner Seven & i Holdings Co. has been smouldering for weeks now, but it’s flaring up this morning on news that the company’s founding Ito family have made an offer to buy the company for up to US$58 billion. Bloomberg is reporting that the offer would be presented to shareholders as an alternative to the takeover offer on the table from Canada’s Alimentation Couche-Tard, a bid that has so far been welcomed about as warmly as a Slurpee. Shares in the Nikkei-listed company gained 17 per cent before trading was halted after word of the offer came out. A separate report in the Financial Times today says that even with the Ito offer in their back pocket, Seven & I management have finally begun “preliminary and limited” talks with Couche-Tard about their $47 billion bid. Expect developments on this one, and we’ll bring you all the details as we learn more.
Ex-PM Stephen Harper floated as AIMCo chair: Alberta’s government has considered hiring former Canadian Prime Minister Stephen Harper to oversee its pension plan, Bloomberg reports. The former PM’s name has been circulating for weeks as a potential chair of AIMCo, which turfed its management and board last week citing ballooning costs despite underwhelming returns.
Gildan mulls selling Canadian debt for first time: TSX-listed Gildan Activewear Inc. is considering selling debt for the first time in Canada and has set up meetings with fixed-income investors to gauge interest, according to Bloomberg. CEO Glenn Chamandy and other executives are about to depart on a road show to pitch debt investors on their offering over the next week. The company was the subject of a high-profile power struggle this year that began when longtime CEO Chamandy was fired about a year ago, only to then rally support from investors to be reinstated. The company’s new board resigned after losing that power struggle. Gildan’s shares hit a new all-time high above $50 last week.
Feds order binding arbitration for ports: Just as they did when Canada’s rail carriers were hit with labour strife in August, the federal government has ordered binding arbitration between workers and management at ports in Montreal and Vancouver to get things moving again. Labour Minister Steven MacKinnon has invoked the government’s right under the Canada Labour Code to punt the two disputes over to the Canada Industrial Relations Board, requesting it to order all parties back to work and resume operations while they enter into a binding arbitration process. Canada’s first and third largest ports in Vancouver and Prince Rupert had been locked out for more than a week and then the second-largest, Montreal, did the same on Sunday. The disputes have idled more than $1.2 billion worth of imports a day. “Canadians have limited tolerance right now for economic self-harm,” MacKinnon said.