The Daily Chase: Preparing for the Budget; Musk takes a stake in Twitter

The Canadian economy is at a critical juncture ahead of the federal budget later this week. Inflation is at an all-time high, housing affordability is at a standstill, the green transition is testing business leaders and employees across the country, the invasion of Ukraine is putting defense spending under the microscope and the pact with the NDP is pulling government purse strings all over the place. Rebekah Young of Scotia Economics, who recently valued NDP deal could add up to $20 billion in spending over next three years, joins us at 9:40 a.m. to set the stage for Thursday’s budget.

As for the prospect of heavy fiscal spending adding more heat to inflation, bear in mind that we’ll get a glimpse of the C-suite’s view of price pressures later this morning when the Bank of Canada will release its Business Outlook Survey.

CENOVUS HEDGE FENCE

The oil sands producer is officially ending what it calls crude oil price risk management activities related to West Texas Intermediate. It also warned that it expects to book a loss of about $970 million on these risk management practices in the first quarter, and it estimates additional losses of about $410 million in the second quarter.

MUSK PUT HIS MONEY WHERE HIS TWEETS ARE

Shares of Twitter soared more than 25% in premarket trading after Tesla CEO Elon Musk revealed he owned 9.2% of the social media platform. It comes just over a week after Musk reflected on free speech on Twitter and wondered if a new platform was needed. We will seek to understand how this could unfold.

PLACE YOUR BETS

Private sector players in the gaming industry are chomping at the bit for the day as Ontario’s regulated online market opens. We’ll look at who’s ready to do business, who’s still waiting for the go-ahead from the Alcohol and Gaming Commission of Ontario, and what the windfall revenue for industry and the provincial government might be.

VANCOUVER BUYERS’ RACE TO BEAT HIGHER RATES

The Real Estate Board of Greater Vancouver reported a 26.9% sequential morning jump in home sales in March. Although the 4,344 property sales marked a deceleration from the record pace set a year earlier, they were still 25.5% above the ten-year average for the month. “Homebuyers are watching rising interest rates closely, hoping to act before their locked-in rates expire,” the real estate board’s chairman said in a statement. As for prices, the composite benchmark stands at $1,360,500.

OTHER NOTABLE STORIES

  • Chairman and CEO of JPMorgan Chase & Co. Jamie Dimon does not want the US Federal Reserve to bend to market expectations. “The Fed should not be worried about market volatility unless it affects the real economy. A strong economy outweighs market volatility,” Dimon wrote in the annual letter to shareholders released. today (attached). He also said the Fed should not be married to quarter-point hikes and “should be free to change [its quantitative tightening] schedule at any time.
  • Howard Schultz wasted no time in pointing out his priorities on his first day back at work from Starbucks General manager. He announced that the company’s stock buyback program was suspended to allow Starbucks “to invest more in our people and our stores – the only way to create long-term value for all stakeholders.” Under former CEO Kevin Johnson, Starbucks announced a three-year, $20 billion buyout plan in October.
  • Intact Financial announcement this morning it is selling the Middle East operations of its RSA business. Terms were not disclosed.
  • The value of building permit issued there jumped 21% in February to a record $12.4 billion, according to Statistics Canada. Most of the increase in activity came from the non-residential sector, where the value of permits jumped 43.2%. Residential permits rose nearly 10% to $7.5 billion.
  • The Ontario government said this morning that it would introduce legislation that reduce gas tax nine cents per litre, compared to 14.7 cents on July 1. Recall that since Friday, the federal backstop on the price of carbon has increased, driving up gasoline prices in Ontario, Alberta, Saskatchewan and Manitoba.
  • unifor says more than 900 workers from a Subway distribution center in Etobicoke, Ont., walked off the job Saturday after rejecting a tentative agreement reached with the supermarket operator late last week. Metro said it has activated a contingency plan to maintain service to stores that rely on the distribution facility.

NEWS RELEASES / NOTABLE EVENTS

  • Notable Data: Canadian Building Permits
  • 10 a.m.: Environment and Climate Change Minister Steven Guilbeault holds a press conference to discuss the latest report from the Intergovernmental Panel on Climate Change
  • 10:30 a.m.: Bank of Canada releases business outlook survey
  • 11 a.m.: Industry Minister François-Philippe Champagne and Ontario Premier Doug Ford announce investment in the auto sector
  • 1:45 p.m.: U.S. President Joe Biden delivers speech on Trucking Action Plan
  • Real Estate Board of Greater Vancouver releases March home sales data

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