Here are five things you need to know this morning:
Gold poised for best week since 2023. The price of gold is set to cap its best week in more than 13 months, on heightened fears of escalation in the Russian Ukrainian war. Gold hit an all-time high of US$2,706.73 an ounce this morning after Russia hit the Ukrainian city of Dnipro with a long-range ICBM – the type of missile that can deliver devastating potentially nuclear payloads across vast distances, and ones which have so far not been used in the conflagration. “The tit-for-tat escalation between Russian and Ukraine has lifted the geopolitical temperature to higher levels … and markets have responded accordingly,” said Ole Hansen, head of commodities strategy at Saxo Bank. That safe haven appeal is coming on top of general bullishness over the prospect of lower interest rates from central bank, a macro move that tends to support the price of gold since it looks more attractive compared to other assets that pay a yield.
Couche-Tard won’t go hostile in 7-11 bid. The chairman of Alimentation Couche-Tard says they still very much want to buy the Japanese owner of 7-Eleven, but they won’t go the hostile takeover route to do it. Alain Bouchard told Japanese newswire service Nikkei that he and an executive team traveled to Japan recently to try to convince the management of Seven & I to be receptive to their $47 billion takeover offer. Shortly after that meeting, word came out that the founding Ito family are trying to put together a better offer, while the existing management team are trying to convince investors to stay the course with a standalone growth plan. That sets up a three-way battle for control that the acquisitive Couche-Tard seems unlikely to win unless they are willing to be a little more aggressive and open their wallets a little more.
Northvolt’s Canadian expansion plans in limbo. Paperwork in the bankruptcy protection filings of Swedish battery maker Northvolt confirm that the company’s Canadian expansion plans are on pause for now. According to paperwork related to the company’s Chapter 11 petitions in the U.S., the company’s plans to build battery plants in Germany and Canada have been postponed, although the company says both facilityds “remain important pieces of the company’s future strategy.” Canadian pension plans and government have kicked in hundreds of millions of dollars of funding into the Quebec-based facility, money that at least for now is stuck in limbo.
Groupe Dynamite IPO doesn’t go boom. With a decline of five per cent, it wasn’t the first day of trading that Groupe Dynamite would have liked. However the first big initial public offer (IPO) of a Canadian company on the S&P/TSX Composite Index in almost two years is nonetheless being hailed as a success by the company and the investment banking community that made it happen. The shares were valued at $21 in the IPO and closed yesterday at $19.85, valuing the company with about 300 stores in the U.S. and Canada at about $2.1 billion. It’s hard to spin a stock price decline as any sort of good news, but Bay Street is hopeful that the offering will open the floodgates to more. “This is encouraging to finally see a transaction get done and hopefully a positive sign of more to come,” Geoff Leverton, partner and national lead of capital markets at PwC told Bloomberg, adding that he has been working with numerous clients on IPO plans and expects some to get over the goal line in 2025. The past two years have been the worst for IPOs on the TSX since 1993, but strong retail demand for Dynamite shares suggests there is an appetite for new listings more companies may now be confident to try to feed it. “The ice is breaking on equity capital markets deal flow,” Josef Schuster, founder and CEO of Ipox Shuster LLC, told Bloomberg.
Retail sales keep inching higher. Sales at Canadian retailers have inched higher for four months in a row, an encouraging sign that consumers are still feeling confident to spend. Statistics Canada reported this morning that retail sales rose 0.4 per cent to $66.94 billion in September, in line with an earlier projection and right what economists were expecting. Preliminary data for October suggests more growth of about 0.7 per cent, although only a little more than half the data has already been compiled.