Markets are open: Stocks bounce back
Stocks are bouncing back this morning on solid earnings from some of the largest U.S. banks.
JPMorgan Chase & Co. posted another quarter of record net interest income and boosted its forecast for the year. Wells Fargo & Co. beat analysts’ expectations for net interest income and raised its guidance. Citigroup Inc. rates and currencies traders posted their best third quarter in at least eight years.
The TSX was up almost 130 points.
Bloomberg and Financial Post
Supreme Court rules against Ottawa’s environmental law
The Supreme Court of Canada ruled against the federal government’s impact assessment law on Friday, with five out of seven judges finding most of it to be unconstitutional because it ultimately seeks to regulate activities within provincial jurisdiction.
Chief Justice Richard Wagner, writing for the majority, said the law as written is aimed at regulating activities that are provincial business, instead of being aimed at environmental effects that are within Ottawa’s power to regulate.
“Even if this court were to accept Canada’s submission that the defined ‘effects within federal jurisdiction’ are within federal jurisdiction, these effects do not drive the scheme’s decision-making powers,” he wrote in the 204-page opinion released Friday.
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Wagner went on to say that the impacts considered in the legislation previously known as Bill C-69, which included a range of environmental and social factors as well as climate change, were “overbroad.”
Two judges, however, dissented, saying the law was constitutional.
Enacted in 2019, the law lists activities that trigger a federal impact review.
Alberta opposed it, arguing the law gives Ottawa power to stick its nose into provincial matters such as resource development. In 2022, it asked the Alberta Court of Appeal for a legal opinion.
The Appeal Court, in a strongly worded 4-1 decision, called the law an “existential threat” to the division of powers in the Constitution and a “wrecking ball” on the rights of Alberta and Saskatchewan.
The Impact Assessment Act is now the second such piece of legislation to be thrown out by the courts.
In 2016, the Federal Court of Appeal struck down assessment legislation passed by the Conservative government of Stephen Harper.
The Canadian Press
Aimia to raise up to $32.5 million, names new directors and board chair
Aimia Inc. signed a deal to raise up to $32.5 million in a private placement of shares and warrants that will be used to fund operations and support its strategic investment plans.
The deal comes as the company faces an unsolicited takeover offer by its largest shareholder. Mithaq Canada Inc., a wholly-owned subsidiary of Mithaq Capital SPC, has offered $3.66 per share in a bid to take Aimia private.
Under the private placement announced before markets opened Friday, Aimia says it will issue up to 10,475,000 shares together with up to 10,475,000 share purchase warrants. Each share and accompanying warrant will be issued at $3.10 and each warrant will be exercisable at $3.70 per share.
Shares in Aimia, which sold its flagship Aeroplan loyalty program to Air Canada in 2019 and reinvented itself as an investment holding company, closed up seven cents at $3.52 on the Toronto Stock Exchange on Thursday.
The company says that assuming the private placement is fully subscribed and all the warrants are exercised, the maximum number of shares issuable under the private placement represents 24.89 per cent of its currently issued and outstanding shares on an undiluted basis.
In connection with and subject to the closing of the private placement, Aimia says it will appoint Thomas Finke and Yannis Skoufalos as independent directors. Finke will also be named chair of its board.
The Canadian Press
JPMorgan posts another record, boosts guidance
JPMorgan Chase & Co. posted another quarter of record net interest income and boosted its forecast for the year as the company benefits from higher interest rates and its purchase of First Republic Bank.
Net interest income was US$22.9 billion in the three months through Sept. 30, above analysts’ expectations. The biggest U.S. bank said it now expects to generate US$88.5 billion from the revenue source this year.
“We acknowledge that these results benefit from our over-earning on both net interest income and below normal credit costs, both of which will normalize over time.,” chief executive Jamie Dimon said in a statement. Dimon warned that the wars in Ukraine and the Middle East could have far-reaching consequences. “This may be the most dangerous time the world has seen in decades,” he said.
JPMorgan’s results mirror similar gains at Wells Fargo & Co., which reported Friday that net interest income — the difference between what a bank earns on loans and the amount it pays out on deposits — also topped estimates. The third-quarter reports offer the latest look at how U.S. consumers and businesses are faring as the United States Federal Reserve leaves borrowing costs higher for longer than most economists had predicted.
Canadian pension funds mull selling stake in Chile’s Transelec
Canadian pension funds including Canada Pension Plan Investment Board are considering selling their stakes in Chile’s biggest power-transmission company Transelec SA, seeking a combined US$3 billion, sources told Bloomberg.
CPPIB, British Columbia Investment Management Corp. and Public Sector Pension Investment Board are in the early stages of evaluating a potential sale of their roughly 72 per cent stake in the Santiago-based utility, the people said, asking not to be identified because the matter is private.
Stock markets: Before the opening bell
Stocks are falling and oil prices are rising this morning on deepening concern over the Israel-Hamas war.
Treasuries rallied as investors turned to havens on signs Israel is preparing for a ground invasion of Gaza.
U.S. futures edged lower, auguring more losses after a retreat Thursday driven by rising bond yields.
What to watch today
We’ll get a fresh look at the state of the housing market this morning with the release of existing home sales data and the MLS Home Price Index for September.
Wall Street kicks off earnings season with JPMorgan Chase & Co., Wells Fargo & Co., Blackrock Inc. and Citigroup Inc. reporting results today.
Need a refresher on yesterday’s top headlines? Get caught up here.
Additional reporting by The Canadian Press, Associated Press and Bloomberg