Listen to this Breakfast Briefing
Trudeau’s First To Move
Canadian Prime Minister Justin Trudeau is accelerating plans to replace Canada’s coal-fired power plants to satisfy commitments to cleaner energy.
Editor’s Remarks: By 2030, Canada is hoping to replace all remaining coal-based energy sources. The move is in line with Trudeau’s overall stance in focusing on the environment, such as setting a minimum price for carbon-based fuels and pushing back deciding on constructing pipelines. Canada appears to have made its decision on how it will restart its struggling economy and handle its neighbour’s new leader. Trudeau may have to face a harsh reality with the fact that Canada is heavily dependent on fossil fuels and its strongest trading partner is very much facing a different direction.
What to watch: Brent Crude, WTI, Justin Trudeau, Donald Trump, USD/CAD
Confidence Lifts In Oil
Russian President Vladimir Putin voiced his approval and support for a curb to oil production.
Editor’s Remarks: The oil industry is back in the limelight as OPEC’s meeting approaches. OPEC has a history of failing to work together and two major players, Iran and Iraq, appear not to be interested in cutting production anytime soon. Many other nations are continuing to look for investment into producing fields despite discussing the possibility of a cut. Russia and Saudi Arabia, however, have maintained a stance of reaching a deal and the rise in price only highlights the trust the market has in their strength. On the face of it, a deal looks like a no, but if Russia and Saudi Arabia say so, expect at least a modest deal to be agreed upon.
What to watch: Brent Crude, WTI, Baker Hughes Rig Count, November OPEC Meeting
Tyson Food Undercooked
Meat producer Tyson Foods has issued a profit warning along with announcing the resignation of its chief, Donnie Smith.
Editor’s Remarks: Tyson watched its share price fall by over 17% after a dark day of bad news. With its long-time chief stepping down to a profit warning for next year, the company is suffering from a massive drop in chicken, beef and pork demand. The move indicates the huge health wave characterising the Millennial generation beginning to affect the market. However, things should brighten up as costs for livestock fall, but not for a few months. It is not entirely clear what Donnie could have done differently to improve the company’s fortunes.
What to watch: Donnie Smith, Tom Hayes, Hillshire Brands, Tyson Foods
LSE Buys Again
The London Stock Exchange (LSE) has announced it will purchase a financial data company based in the US, Mergent.
Editor’s Remarks: LSE looks set to improve its data and research department by buying the information provider. The deal itself is not significantly expensive, but it will give regulators something else to think about as Brussels investigates the deal between LSE and the German Borse. Over the next few weeks, regulators are expected to provide their list of concerns over the bigger Borse-LSE deal. LSE is growing its US information market share after previously purchasing the popular Russell business in 2014 and the new Mergent deal highlights how important major market players consider the growth of ETFs, which use this information.
What to watch: LSE, Borse, Mergent
Brasil Pains Hit Banco
Banco Do Brasil, the largest bank in Latin America, announced significant cost cuts, from its employees being pushed into retirement to closing branches.
Editor’s Remarks: Brazil’s business confidence fell to barely above positive as more bad news concerning corruption keeps pouring in. Companies in Brazil have been forced to cut back as the GDP growth rate continues to be negative and economists keep lowering their forecasts. Banco do Brasil plans to close over 400 branches and move more into internet banking. Things could get worse for the bank and the rest of Brazil if the powerful bank unions of Brazil disagree on the action. Innovation is necessary and cutting too, but Brazilian politics may get in the way.
What to watch: Banco do Brasil, Itau Unibanco, Caixa Economica Federal, USD/BRL