Here are five things you need to know this morning:
Another roadblock for Couche-Tard’s 7-Eleven ambitions: Another hurdle has emerged on the long path facing Couche-Tard in its bid to take over convenience store owner Seven & i Holdings after Japan’s economy minister said any foreign bid to buy the company would be “heavily related” to national security. On Wednesday, Ryosei Akazawa made the comment obliquely in reference to TSX-listed Alimentation Couche-Tard’s proposed US$47 billion takeover of the company that owns 7-Eleven, an offer that has been rebuffed. The company’s founding family is trying to put together a buyout deal to take the company private and keep it in Japanese hands. Among other factors, Akazawa said the company would be considered on national security interests because its network of convenience stores and distribution chain might be critical in any disaster scenario to distribute food and supplies.
Trump plans to put ‘economic force’ on Canada: Donald Trump stepped up his rhetoric in his trade war of words with Canada on Tuesday, telling reporters he would use “economic force” to compel Canada to comply to his demands on the trade file. The comments are an escalation of previous talk on the subject, where the notion of the U.S. annexing Canada was mostly dismissed as a playful ribbing. But Trump’s comments make it clear he isn’t pleased with the state of economic affairs between the two countries. He said the U.S. subsidizes Canada to the tune of hundreds of billions of dollars a year, an apparent reference to Canada’s trade surplus with the U.S., which is largely due to energy exports. It’s hard to discern what’s real and what’s just bluster here, but it’s also hard to understate the impact of a firm economic line from the U.S. toward Canada. More than three quarters of Canadian exports go to the United States, and innumerable critical imports come the other way. We’ll get more reaction on this ongoing story throughout the day.
Prorogation throws capital gain tax plan into chaos: Of all the fallout from Monday’s announcement by the Prime Minister that he will be stepping down, there’s perhaps no more interesting angle for Canadian businesses and investors than the impact on the capital gains tax changes proposed in last April’s budget. After carving the plan to raise the threshold out of the budget, the Liberals tried to move the legislation through on its own, but prorogation has now seen that law die on the vine. Tax authorities and planners, however, have been operating under the assumption that the new plan would see the light of day, leading to a nightmare headed into tax season with lack of clarity on the rules. The Canadian Federation of Independent Business didn’t like the plan in the first place, but says the current chaos is even worse. In a social media post, CFIB president Dan Kelly called the situation “untenable” and urged tax authorities to revert back to the old system. “This is deeply unfair and disrespectful to Canadians that have important transactions ahead, not to mention those who rushed to sell businesses or assets in advance” of the rules ostensibly coming into force last June, he said.
FOMC minutes: We’ll get some insights into the line of thinking at the world’s most influential central bank today, when the minutes from the last U.S. Federal Reserve policy meeting will be released. At the meeting in December, the Fed cut its interest rate by 50 points as expected, but while opting for a large-sized cut somehow managed to telegraph to the market that it may be getting closer to being done with cuts. Expectations are now that there could be just one or maybe two more small rate cuts for all of 2025, as the uncertain economic climate has raised the prospect that inflation may return. If anything, the minutes of that meeting should provide some insight as to how much the biggest X factor of all was in their decision making: Donald Trump. Some of the incoming U.S. president’s more aggressive economic policies such as tariffs may boost inflation, which changes the numbers for policy makers trying to get back to two per cent and stay there.
First Majestic silver production surges:
We’ll be watching shares in TSX-listed silver miner First Majestic today. Production at the company surged by 20 per cent during the most recent quarter, with activity picking up at three mines in Mexico. But despite the increase, the output still missed analyst expectations.