Here are five things you need to know this morning:
Stop the steel. U.S. President Joe Biden has blocked the US$14 billion takeover of U.S. Steel by Japan’s Nippon Steel. Although the move doesn’t exactly come as a complete surprise, shares in U.S. Steel are down about seven per cent premarket this morning in a sign that investors don’t know what happens next, but none of the options seem particularly appealing. Both companies had previously signaled they planned to pursue legal actions if the government formally stepped in, even as their recent pronouncements were a bit more conciliatory in trying to get a deal done. Cleveland Cliffs had previously pursued U.S. Steel before Nippon Steel stepped in with a sweeter offer, but the prospect of Cleveland now swooping in since they have since moved to buy Canada’s Stelco instead.
CPP sells stake in four Chinese malls. The Canada Pension Plan Investment Board is selling its 49 per cent interest in four real estate joint venture projects to an affiliate of Dajia Insurance Corp. The pension giant says the sale, which will include four retail malls in Shanghai, Suzhou, Chengdu and Chongqing, will bring in about $235 million Canadian.
Chinese bond yields slump to record low. China’s bond market beat the performance of most global peers last year as an economic slowdown prompted expectations of more rate cuts to come. That rally in prices has sent yields down to their lowest level on record, with the 10-year dipping below 1.6 per cent for the first time ever yesterday. The “relentless decline” in Chinese yields is a clear sign the market is worried about deflation, something that has not been a concern in China basically ever, Lombard Odier strategist Homin Lee told Bloomberg News. “There is a risk that China’s 10-year bond yields start testing one per cent before the end of this year,” Lee said.
Rogers warns of below forecast service revenue. Rogers Communications Inc. shares will be one to watch today as the telecom company says its service revenue for 2024 will grow by seven per cent for the year 2024. That’s below the range of eight to 10 per cent that the company had previously forecast. The company cited weakness in its media business.
Toys R Us Canada closing stores, revamping others. Toys R Us Canada says it plans to close five stores in Ontario and revamp several others at it works to optimize its business. The retailer says some locations will convert part of their space to HMV locations, which is another brand owned by the chain’s owner Putman Investments. Other locations will be remodeled to host a Wonderlab, a concept the chain has tested out that includes indoor play structures and space for arts and craft activities.