Here are five things you need to know this morning:
Here comes Santa Claus: Futures are cooling it following a stellar November. U.S. financial markets including stocks and bonds put in their best monthly showing since 2008. The TSX put in its best monthly showing in three years. This Wednesday we are expecting a Bank of Canada rate decision (rates are expected to stay on hold for the third meeting in a row). On Friday, we will get the unemployment rate in the U.S. While futures are pulling back this morning, we had gold hit a record high of $2,100 per ounce in the early hours of trading before retreating slightly. Meanwhile, Bitcoin is surging to more than a 1.5 year high at nearly $42,000. I won’t pretend to know the reason why. Of course, there is enthusiasm around a possible spot Bitcoin ETF getting approved in the U.S. The index makers of the TSX announced some new members and some deletions. Kelt Exploration & New Gold will be added to the composite starting Dec. 18. Dye & Durham, Endeavour Silver, Park Lawn and Telus International will be deleted. These stocks could come under pressure ahead of the changes.
Origin story: Origin Energy has rejected Brookfield Asset Managements US$12.8 billion takeover bid. Origin’s largest investor opposed the offer as too low and argued that the company's value is better without the acquisition. Brookfield has acknowledged the results and says it will take into account a new government plan to accelerate the rollout of green energy before it moves forward.
Downward dog: Shares of Lululemon are getting clipped in the pre-market after surging to a two-year high on Friday. Wells Fargo is downgrading the stretchy clothing maker even as the company nudges up its profit expectations. It seems to be a valuation call. The analyst was prescient in his upgrade of the stock in January but now feels Nike is a better opportunity. It’s an interesting call ahead of earnings, which are out after the close on Thursday.
Halo: Shares of Nuvei are pumping in the pre-market after announcing an expanded partnership with Microsoft. Microsoft is now going to be using Nuvei’s payment technology in its Middle East and African regions. Nuvei tech will be implemented to deal with recurring billing and transactions across Office and Xbox. Not sure if this should qualify as reason to move the stock, since no financial terms were disclosed, but I am paying attention to the price action especially considering the stock has been run over this year and is down more than 85 per cent from its 2021 peak. Even the mighty Ryan Reynolds has not been strong enough to prop up the stock. It has lost 50 per cent of its value since the actor announced his investment in the company.
Mele Kalikimaka: It’s a Merry Christmas for shareholders in Hawaii Airlines. Alaska Airlines announced on Sunday it plans to buy Hawaiian at a 270 per cent premium to where the stock closed Friday. Of course, the deal is still subject to regulatory approval and you see that hesitancy in the pre-market, with the stock trading about US$5 below the offer price. At $18 per share, the all-cash offer sounds very impressive relative to the recent close. However, it’s about where the stock has traded on average over the past five years and is well off of its peak of nearly $60 per share in 2016. Alaska is putting investors out of their misery as Hawaii Air has been hit by a slower return to tourism and increased competition. So perhaps investors will be keen to say mahalo for the premium and hang loose to the company.