Noah Zivitz

Managing Editor, BNN Bloomberg

Archive

WestJet is planning to lay off another 3,000 employees next month as a result of deep cuts to its schedule as passenger traffic collapses. How bad is it? WestJet CEO Ed Sims says the airline’s passenger load (ie, seats filled) is “less than five per cent” of pre-COVID levels. “The reality of this crisis continues to require WestJet to make mission-critical decisions to ensure the sustainability of our airline.” This opens the door to conversations about what it will take to rekindle the public’s confidence in air travel when self-isolation measures are lifted, and what needs to be done to keep airlines alive in the meantime. We’ll chase answers.

OIL EXTENDS GAINS

The contract for June delivery of West Texas Intermediate crude has been up as much as 16.9 per cent in early trading, adding to yesterday’s 19 per cent rally. Western Canadian Select also spiked, closing 31 per cent higher Wednesday; while heavyweights like Suncor, Enbridge and Canadian Natural Resources helped propel the S&P/TSX Composite Index. Might be a good day for us to check back with energy economist Jan Stuart, who said Monday the June WTI contract was overvalued and predicted any recovery for oil prices will be “slow as molasses”.

HOW TO RE-OPEN ECONOMIES

In Canada, the focus today will be on Saskatchewan, where the first details of a five-phase plan will be unveiled. In his address to the province last night, Premier Scott Moe said it will be a “gradual, methodical and cautious process” akin to adjusting a dimmer rather than flipping a light switch, and “stringent” rules will be in place for the businesses that get the green light. We’re hoping to speak with the premier today.  

KENNEY NOT SWEATING AIMCO

There was no panic from Alberta Premier Jason Kenney late yesterday when reporters pressed him on The Globe and Mail’s report that AIMCo recently suffered approximately $4 billion in losses on wrong-way bets on market stability. “Things are so topsy-turvy [in the market] … so it is not surprising that we would see investment funds of all scales, and all places, incurring losses right now,” Kenney said. He also kept the door open to the possibility of pulling out of CPP in favour of AIMCo. Meantime, AIMCo’s largest stakeholder, the Local Authorities Pension Plan (LAPP), acknowledged in a statement that it’s been informed AIMCo’s returns “will be down considerably”. And, for the record, AIMCo still isn’t officially confirming the details of its reported losses.

OTHER NOTABLE STORIES

-Trust Murray Mullen to provide candid commentary. His company's earnings release late yesterday started with him saying the pandemic "makes talking about financial results and expectations somewhat awkward when the risks to many in our communities take on a much bigger meaning," adding he "doubts if we will know for quite some time" if the government's proves successful. He also disclosed Mullen Group has temporarily let go 1,000 employees so far. Awkwardness aside, Mullen Group reported a 66 per cent surge in net cash from operating activities in the first quarter. 

-Calgary-based Bellatrix Exploration, which had put itself up for sale as part of CCAA proceedings, has agreed to be acquired by Return Energy for $87.4 million. Working capital and some other unspecified assets are excluded from the deal.

-Choice Properties REIT says it has collected 86 per cent of total rent due this month. The disclosure came alongside first-quarter results that show funds from operations slipped modestly from the same quarter last year.

-European leaders are meeting today to discuss their response to COVID-19 and there’s a basket of fresh data underscoring the profound economic pain caused by the virus, including an index of consumer confidence in Germany that sank to -23.4, and a purchasing managers’ index for Eurozone manufacturing activity sagging to 33.6 (where anything below 50 signals contraction).

NOTABLE RELEASES/EVENTS

-Notable data: U.S. initial jobless claims, U.S. new home sales

-Notable earnings: Aecon Group, Canfor, Intel, Southwest Airlines

-11:15 a.m. ET: Prime Minister Justin Trudeau addresses Canadians from Ottawa

-12:30 p.m. ET: Saskatchewan Premier Scott Moe to release details on re-opening economy

-5:00 p.m. ET: U.S. Coronavirus Task Force holds briefing at the White House

-EU leaders hold summit via videoconference to discuss 540-billion euro virus aid package

Every morning BNN Bloomberg's Managing Editor Noah Zivitz writes a ‘chase note’ to BNN Bloomberg's editorial staff listing the stories and events that will be in the spotlight that day. Have it delivered to your inbox before the trading day begins by heading to www.bnnbloomberg.ca/subscribe.