Noah Zivitz

Managing Editor, BNN Bloomberg

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The S&P/TSX Composite Index enters today just 226 points shy of breaking through 20,000 after notching a record close yesterday for the third consecutive day. Canadian National Railway led the way on Thursday as analysts and investors seemingly warm up to its planned purchase of Kansas City Southern. The bigger picture though is that the index has been on wheels since bottoming out a little more than a year ago. We’ll be prepared to dig into the anatomy of the rally.

MORE FROM THE BANKS

We’re looking forward to speaking with TD Bank Group CEO Bharat Masrani this afternoon. His company’s profit beat fell flat with investors yesterday as questions were raised about the quality of the performance. We’ll probe that and the bank’s outlook in Bloomberg Markets. And we’ve also got Canadian Western Bank CEO Chris Fowler on the station this afternoon; his firm joined the earnings parade this morning, with revenue jumping 15 per cent year-over-year. The bank also raised its full-year profit forecast and talked up the potential for further expansion in Ontario. And National Bank rounded out this week’s earnings with net income that more than doubled year-over-year and an adjusted number that exceeded estimates. Credit quality was the big story again, as provisions for losses sank to just $5 million from $504 million a year ago. National may have M&A on its radar, with CEO Louis Vachon saying his bank is “well-positioned to selectively seize growth opportunities as we gradually exit the pandemic.”

CRTC WALKS BACK CONTENTIOUS WHOLESALE RULING

The Canadian Radio-television and Telecommunication Commission has given up on its 2019 ruling on wholesale broadband rates that triggered outrage among the country’s incumbent telcos. In an announcement late yesterday afternoon, the regulator said it has come to “doubt the correctness of certain aspects” of that decision. And so, after an extensive review, the wholesale rates are reverting to interim prices that were set in 2016. Bell applauded the decision in a statement; meanwhile, upstarts that piggyback on the incumbents’ networks are crying foul, and Industry Minister Francois-Philippe Champagne said the government will review the decision to make sure it’s in line with a desire for “affordability, competition and innovation in the sector.”       

ANOTHER POT DEAL

Hexo is climbing the ranks of Canada’s licensed cannabis producers, announcing this morning it’s buying Redecan for almost $1 billion in cash and stock. It’s a move that Hexo’s CEO (who joins us at 10:10 a.m. ET) says puts his company on the verge of being this country’s top pot producer by market share. David George-Cosh had an inkling could be coming. He’ll have all the details and will put it in context for us. Sidebar: this is a good opportunity to point out that we’ve got the CEO of Philip Morris International on the station this morning at 10:30 a.m. to discuss the tobacco industry’s evolution as it faces shifting consumer habits.

OTHER NOTABLE STORIES

• Bitcoin has been down as much as 8 per cent after Bank of Japan Governor Haruhiko Kuroda undermined the cryptocurrency’s usefulness in an interview, pointing to speculative trading and “extraordinarily high” volatility.
• WestJet made another plea last night for the government to ease “onerous border measures” after the federally appointed COVID-19 Testing and Screening Expert Advisory Panel announced fresh recommendations for different categories of travelers.
• Walt Disney Co. announced late yesterday that Lululemon Chief Executive Officer Calvin McDonald has been elected to its board of directors. What a trajectory he’s been on since he first landed on our radar a decade ago as CEO of Sears Canada.
• Gap has a mixed bag on its hands with its family of banners. Old Navy and Athleta posted double-digit first-quarter same-store sales growth compared to 2019, while its namesake business and Banana Republic saw their comparable sales slump. Despite the mixed performance, Gap raised its full-year sales and profit forecasts.

NOTABLE RELEASES/EVENTS

• Notable data: U.S. personal income and spending
• Notable earnings: National Bank of Canada, Canadian Western Bank
• 10:30 a.m.: Ontario Premier Doug Ford leads announcement on province’s COVID-19 vaccination plan (technical briefing at 9 a.m.)
• G7 finance ministers and central bankers hold virtual meeting
• Quebec lifts curfew, loosens restrictions on restaurants in stage one of reopening (just in time for game six of the Habs-Leafs series tomorrow at the Bell Centre)