The Daily Chase: Investors brace for bank earnings

Here are five things you need to know this morning.

It’s giving thanks: Trading volumes will be low with Americans giving thanks for the rally in U.S. stocks and bonds. The S&P 500 is just five per cent away from an all-time high and the bond market is on track for its best month since March. As for the TSX, well, it’s been watching from the sidelines. The go-nowhere index continues to hum merrily along the 20,000 mark. This morning we got a read of economic activity in the Euro area that showed both manufacturing and services increasing from two-year lows, but still stuck in contraction. Oil posted an intraday reversal after an initial sharp sell-off on the back of OPEC+ delaying its meeting. But it is a delay, not a cancellation, so perhaps investors are still skittish about being short into the Nov. 30 meeting.

Origin story: Brookfield Asset Management has been trying to buy Origin, Australia’s largest utility, for the past year. That deal was dealt another blow as it appears its top investor was poised to reject an amended offer by Brookfield. In classic Brookfield form, the deals on the table are far from straightforward. Under the newest amendment, Brookfield is giving investors the opportunity to re-invest into Origin’s energy generation and retailing business. Its backup plan is to try and acquire Origin’s energy unit while its partner in the bid, EIG, would make an off-market offer for the remaining business. The holdout is AustralianSuper, a pension fund which owns 17 per cent of Origin. AustralianSuper said in a statement that the latest offer is a “low-ball” and argued Origin should remain owned by AustralianSuper members, not in the hands of “a private equity consortium planning to shortchange them.” A shareholder vote on the amended deal that allows for reinvestment will now be held Dec. 4.

Clean up on aisle two: We will watch shares of Empire after catching a downgrade from Vishal Shreedhar at National Bank. Yesterday, grocery stocks were in rally mode on no specific news (perhaps no news in the fall fiscal update was the good news). Empire, which owns Sobeys and Farm Boy, is up eight per cent so far this year and Shreedhar thinks it’s time to cash in. While Empire trades a discount to peers, it is not enough to tempt the analyst who says Empire has less exposure to pharmacy which is the real crown jewel these days.