The Daily Chase: What do you think BoC will do?; Home Capital reinstates dividend
BNN Bloomberg
Who’s side are you on in prognosticating the Bank of Canada’s rate-hike plans?
Who’s side are you on in prognosticating the Bank of Canada’s rate-hike plans? 1) The market data which, as of 5:25 a.m. today, was showing investors are pricing in the equivalent of seven quarter-point moves this year, which would take the main policy rate to 2.0 per cent from today’s 0.25 per cent. 2) David Rosenberg, the famed economist and strategist, who told us yesterday afternoon the central bank would be “playing with fire” if it tightens more than three times. 3) Bank of Canada Deputy Governor Timothy Lane, who said in a speech mere minutes after we wrapped up with Rosenberg that the bank is prepared to be “forceful” to address whatever situation arises.
This is the most consequential issue facing Canada’s economy, and we’ll keep chasing informed perspective leading up to the rate decision next month, when traders seem to think liftoff is a slam dunk.
ANOTHER CHAPTER IN HOME CAPITAL’S TURNAROUND
The alternative mortgage lender that was pushed to the brink in 2017 by the onslaught of a regulatory probe, a run on its deposits, and a short seller, is about to reward investors that have stayed by its side and those who bought into the recovery. Home Capital Group said this morning its board approved a 15-cent dividend that will be paid out at the end of next month. That’ll be the first dividend from the company in more than half a decade. Suffice to say, there’ll be plenty to discuss with CEO Yousry Bissada when he joins us this afternoon. On top of the dividend, there’s also quarterly results that included an uptick in mortgage originations.
POST-MORTEM ON SHOPIFY ROUT
Our Bloomberg Television partner Emily Chang tried to pin down Harley Finkelstein on yesterday's wipeout, but the company's president talked right around the market reaction. Instead, he focused on double-digit growth last year, a growing merchant base that's he's convinced is "going to do very well," and spoke confidently about the company's evolving fulfillment strategy. I see at least one analyst who covers the stock (at Roth Capital Partners) downgraded his recommendation to neutral this morning.
