INVESTMENT STRATEGY GROUP

MARKET BEAT

Friday, October 09, 2020

MACRO VIEW Market Indicators Index Level* Change YTD YTD (C$) North American stock markets are trading higher with Canada posting S&P/TSX 16,536.15 0.01% -3.1% -3.1% stronger-than-expected labour data. 378,200 jobs were added in S&P 500 3,461.88 0.44% 7.2% 8.4% September, exceeding estimates of 150,000. 334,000 of the roles were NASDAQ 11,516.46 0.84% 28.4% 29.9% full-time and 44,200 were part-time. Canada’s unemployment rate Dow Jones 28,463.99 0.14% -0.3% 0.9% declined to 9.0% from 10.2% in August. The participation rate improved Nikkei 225 23,619.69 -0.12% -0.2% 3.8% to 65.0% while hourly wages grew by 5.4% year-over-year. Euro Stoxx 50 3,267.90 0.37% -12.7% -6.9% In commodities, West Texas Intermediate crude oil (-0.3%) FTSE EM 2,358.05 0.65% 2.0% 3.2% prices are steady as the U.S. Gulf Coast deals with another hurricane impacting its operations. Hurricane Delta is expected to make landfall Canadian Market Movers in Louisiana sometime today. Gold (+2.0%) is trading higher as the U.S. FM First Quantum 4.3% dollar slips against all the other major currencies as well as the Canadian dollar (+0.3%). Lastly, government bond yields across the KL Kirkland Lake Go 4.0% world have moved lower universally. K 3.8% WPM Wheaton Precious 3.5% CANADIAN MARKETS AEM Agnico Eagle Min 2.8% IMO -2.2%

Advantage Oil & Gas (AAV, -2.6%) has increased its 2020 capital budget CNQ Can Natural Res -2.3% to a range of $147 million to $162 million, from its prior forecast of PPL -2.4% $130 million to $145 million. The budget has been increased primarily to BHC Co -2.9% accelerate a four-well pad into Q4/20. CVE -3.6% Retail liquor stores operator Alcanna (CLIQ, +4.0%) announced the sale *As of October 9 2020 10:34 AM. Source: Bloomberg of eight convenience-format liquor stores in B.C. to Mid-Island Co- operative for a total price of $21.1 million. For Q3, the company U.S. Market Movers expects same-store liquor sales growth of 15% year-over-year (Y/Y) and GE General Electric 2.0% the total liquor gross margin as a percentage of sales to be flat or EMR Emerson Elec Co 1.9% slightly higher compared to Q2. It also expects cannabis sales for Q3 to NFLX Netflix Inc 1.5% be approximately 23% higher than the previous year with a gross margin AMZN Amazon.Com Inc 1.5% as a percentage of sales of approximately 33%. TMO Thermo Fisher 1.4%

Summit Industrial REIT (SMU.UN, +0.7%) is acquiring the remaining 50% IBM Ibm -1.5% stake in a portfolio of eleven properties from its joint venture partner, KMI In -1.8% Groupe Montoni, for a price of $88 million. This will be funded by $31.8 OXY Occidental Pete -2.0% million of mortgage debt and cash from its revolving credit facility. AMGN Amgen Inc -2.1% Summit also announced that it will sell a 50% interest in an office SPG Simon Property -2.4% building in Montreal to Montoni for $5.8 million. *As of October 9 2020 10:34 AM. Source: Bloomberg CI Financial (CIX, -0.6%) reported preliminary assets under management

(AUM) of $128.2 billion and wealth management assets of $66.0 billion Benchmark Bonds & Rates for September. CI’s AUM declined by 1.8% month-over-month (M/M) and 1 1 2 2 Chg Yld Dec-20 Mar-21 was down 1.1% year-over-year (Y/Y). The company had a total of $2.0 CA 2YR -0.01% 0.22% 0.35% 0.35% billion in net redemptions for 3Q/20. CA 10YR -0.02% 0.60% 0.70% 0.80% MTY Food Group (MTY, +15.3%) reported Q3/20 system sales of $897.5 US 2YR 0.00% 0.15% 0.25% 0.30% million, down 17% Y/Y, however, adjusted EBITDA of $43.4 million was US 10YR -0.02% 0.76% 0.80% 1.00% ahead of consensus of $25.5 million. Better performance of Cold Stone 1 2 2 Rate Dec-20 Mar-21 Creamery and Papa Murphy’s brand along with the reduction of CA Prime 2.45% - - recurring expenses and strong cash management contributed to the positive results. CA Overnight Tgt 0.25% 0.25% 0.25% Fed Funds Tgt 0.25% 0.13% 0.13%

1 - As of October 9 2020 10:34 AM.; 2 - CIBC forecasts. Source: Bloomberg CIBC PRIVATE WEALTH MANAGEMENT INVESTMENT STRATEGY GROUP 1 Market Beat

Currencies & Commodities CAPREIT (CAR.UN, -0.6%) has completed an early buyout of operating Price* Change YTD lease for approximately $7.8 million in , Ontario. CAPREIT noted that it paid $9.0 million to purchase three manufactured home C$/US$ 0.761 -0.005 -1.2% communities in Ontario that have 100% occupancy. US$/€ 0.846 0.006 -5.1% Gold $1,926.23 $32.41 27.0% Alaris Equity Partners (AD.UN, +5.7%) has made a follow-on investment Copper per 100 lb $305.90 $1.70 8.3% of US$55.0 million in GWM Holdings. This investment is expected to Oil (WTI) $40.94 -$0.25 -33.0% result in an annual increase of 9% in revenue and an 8% increase in net Oil (WCS) $31.46 -$0.23 -18.4% cash from operations per unit. Alaris has a total US$101 million Natural Gas (NYMEX) $2.82 $0.19 28.6% investment in GWM, including US$46 million of original investment made Natural Gas (AECO) $1.06 -$0.21 -38.0% in November 2018. *As of October 9 2020 10:34 AM. Source: Bloomberg U.S. MARKETS

Equity Indices YTD Advanced Micro Devices (AMD -2.9%) is in advanced talks to purchase 120 chipmaker Xilinx (XLNX +13.1%) in a potential transaction worth over 110 US$30 billion. The deal could be finalized as early as next week. 100 NXP Semiconductors (NXPI +3.7%) provided improved guidance for its 90 80 third quarter after seeing a “material improvement” in demand. The company enjoyed increased demand across each of its business units, 70 with notable strength in its automotive and mobile end markets. NXP is 60 scheduled to release its quarterly earnings report on Oct 26.

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31 Aug31 31 Dec 31 AT&T (T -0.8%) is reportedly planning to remove thousands of jobs from May 31 its WarnerMedia unit. The communication giant is targeting a 20% S&P/TSX Dow Jones S&P500

reduction to its WarnerMedia staffing costs, following a statement that WarnerMedia would be undertaking a restructuring after being impacted Earnings Releases by the pandemic. Name Date Est. Act. Hospital operator HCA Healthcare (HCA +2.4%) will be paying back Johnson&Johnson (JNJ) 10/13 $1.97 -- * roughly US$6 billion in government aid. HCA received the aid as an Jpmorgan Chase (JPM) 10/13 $2.22 -- * emergency response to the pandemic but will be able to repay the Citigroup Inc (C) 10/13 $0.92 -- * funding with its operating income following a better-than-expected Blackrock Inc (BLK) 10/13 $7.76 -- * quarter. Fastenal Co (FAST) 10/13 $0.37 -- *

Gilead Sciences (GILD +1.2%) reported data from its final study for its First Republic B (FRC) 10/13 $1.38 -- * remdesivir anti-viral treatment. The drug will help to improve the Delta Air Li (DAL) 10/13 -$2.98 -- * recovery time for COVID-19 patients. On average, those hospitalized Unitedhealth Grp (UNH) 10/14 $3.08 -- *

with COVID-19 recovered 5 days faster when treated with remdesivir. Bank Of America (BAC) 10/14 $0.49 -- * The company calls the trial outcome meaningful and says it will have a Wells Fargo & Co (WFC) 10/14 $0.45 -- * sufficient supply of the drug for global distribution by the end of this Goldman Sachs Gp (GS) 10/14 $5.52 -- * month. Us Bancorp (USB) 10/14 $0.90 -- * Progressive Corp (PGR) 10/14 $1.79 -- * Source: Bloomberg * = USD Economic Calendar - Canada Economic Calendar - U.S. Day Release Prior Est. Actual Day Release Prior Est. Actual 10/9 Net Change in Employment (Sep) 245.8k 150.0k 378.2k 10/9 Bloomberg Oct. United States Economic Survey0 () 0 0 10/9 Full Time Employment Change (Sep) 205.8 -- 334 10/9 Wholesale Inventories MoM (Aug F) 0.50% 0.50% 0.40% 10/9 Part Time Employment Change (Sep) 40 -- 44.2 10/9 Wholesale Trade Sales MoM (Aug) 4.60% -- 1.40% 10/9 Unemployment Rate (Sep) 10.20% 9.80% 9.00% 10/13 NFIB Small Business Optimism (Sep) 100.2 100.9 -- 10/9 Hourly Wage Rate Permanent Employees YoY6.00% (Sep) 5.60% 5.40% 10/13 CPI MoM (Sep) 0.40% 0.20% -- 10/9 Participation Rate (Sep) 64.60% 64.70% 65.00% 10/13 CPI Ex Food and Energy MoM (Sep) 0.40% 0.20% -- 10/13 Bloomberg Nanos Confidence 53.1 -- -- 10/13 CPI YoY (Sep) 1.30% 1.40% -- 10/13 Bloomberg Oct. Canada Economic Survey () 0 0 0 10/13 CPI Ex Food and Energy YoY (Sep) 1.70% 1.80% -- 10/15 Existing Home Sales MoM (Sep) 6.20% -- -- 10/13 CPI Index NSA (Sep) 259.918 260.248 -- 10/16 Int'l Securities Transactions (Aug) -8.52b -- -- 10/13 CPI Core Index SA (Sep) 268.747 269.341 -- Source: Bloomberg Source: Bloomberg BRAD BROWN, CFA - SR. MANAGER, EQUITIES PUJA GHOSH, CFA, MBA, MSC. – ASSOCIATE LAUREN ELLISON, CIM, CFP – ASSOCIATE JOHNNY TAM, MASC, CFA - ASSOCIATE ALLAN BISHOP - DIRECTOR, FIXED INCOME ANKUR JAIN – ASSOCIATE

CIBC PRIVATE WEALTH MANAGEMENT INVESTMENT STRATEGY GROUP 2 Market Beat

IMPORTANT DISCLOSURES

Important disclosures, including potential conflicts of interest information, our system for rating investment opportunities and our dissemination policy can be obtained by writing to CIBC World Markets Inc. BCE Place, 161 Bay Street, 4th Floor, Toronto, Ontario M5J 2S8, Attention: Research Disclosures Request. This report is issued and approved for distribution in Canada by CIBC World Markets Inc., a member of the Investment Industry Regulatory Organization of Canada and a member of the Canadian Investor Protection Fund. Any questions should be directed to your sales representative. Every province in Canada and most countries throughout the world have their own laws regulating the types of securities and other investment products which may be offered to their residents, as well as the process for doing so. As a result, some of the securities discussed in this report may not be available to every interested investor. 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Unauthorized use, distribution, duplication or disclosure without the prior written permission of CIBC World Markets is prohibited by law and may result in prosecution. CIBC Private Wealth Management consists of services provided by CIBC and certain of its subsidiaries, including CIBC Wood Gundy, a division of CIBC World Markets Inc. CIBC Private Wealth Management is a registered trademark of CIBC, used under license. “Wood Gundy” is a registered trademark of CIBC World Markets Inc. Insurance services are available through CIBC Wood Gundy Financial Services Inc. In Quebec, insurance services are available through CIBC Wood Gundy Financial Services (Quebec) Inc. If you are currently a CIBC Wood Gundy client, please contact your Investment Advisor. Important Disclosure Footnotes for Companies Mentioned in this Report that Are Covered by CIBC World Markets Corp./Inc.: Stock Prices as of 10/08/2020 Advantage Oil & Gas Ltd. (2g) (AAV-TSX, C$1.93) Alcanna Inc. (2a, 2c, 2e, 2g) (CLIQ-TSX, C$4.97) Summit Industrial Income REIT (2a, 2c, 2e, 2g) (SMU.UN-TSX, C$13.09) Canadian Properties REIT (2a, 2c, 2e, 2g, 7) (CAR.UN-TSX, C$46.11) Alaris Equity Partners (2g) (AD.UN-TSX, C$11.68)

Key To Important Disclosure Footnotes: 1 CIBC World Markets Corp. makes a market in the securities of this company. 2a This company is a client for which a CIBC World Markets company has performed investment banking services in the past 12 months. 2b CIBC World Markets Corp. has managed or co-managed a public offering of securities for this company in the past 12 months. 2c CIBC World Markets Inc. has managed or co-managed a public offering of securities for this company in the past 12 months. 2d CIBC World Markets Corp. has received compensation for investment banking services from this company in the past 12 months. 2e CIBC World Markets Inc. has received compensation for investment banking services from this company in the past 12 months. 2f CIBC World Markets Corp. expects to receive or intends to seek compensation for investment banking services from this company in the next 3 months. 2g CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services from this company in the next 3 months. 3a This company is a client for which a CIBC World Markets company has performed non-investment banking, securities-related services in the past 12 months.

CIBC PRIVATE WEALTH MANAGEMENT INVESTMENT STRATEGY GROUP 3 Market Beat

3b CIBC World Markets Corp. has received compensation for non-investment banking, securities-related services from this company in the past 12 months. 3c CIBC World Markets Inc. has received compensation for non-investment banking, securities-related services from this company in the past 12 months. 4a This company is a client for which a CIBC World Markets company has performed non-investment banking, non-securities-related services in the past 12 months. 4b CIBC World Markets Corp. has received compensation for non-investment banking, non-securities-related services from this company in the past 12 months. 4c CIBC World Markets Inc. has received compensation for non-investment banking, non-securities-related services from this company in the past 12 months. 5a The CIBC World Markets Corp. analyst(s) who covers this company also has a long position in its common equity securities. 5b A member of the household of a CIBC World Markets Corp. research analyst who covers this company has a long position in the common equity securities of this company. 6a The CIBC World Markets Inc. fundamental analyst(s) who covers this company also has a long position in its common equity securities. 6b A member of the household of a CIBC World Markets Inc. fundamental research analyst who covers this company has a long position in the common equity securities of this company. 6c One or more members of Investment Strategy Group who was involved in the preparation of this report, and/or a member of their household(s), has a long position in the common equity securities of this company. 7 CIBC World Markets Corp., CIBC World Markets Inc., and their affiliates, in the aggregate, beneficially own 1% or more of a class of equity securities issued by this company. 8 A partner, director or officer of CIBC World Markets Inc. or any analyst involved in the preparation of this research report has provided services to this company for remuneration in the past 12 months. 9 A senior executive member or director of Canadian Imperial Bank of Commerce ("CIBC"), the parent company to CIBC World Markets Inc. and CIBC World Markets Corp., or a member of his/her household is an officer, director or advisory board member of this company or one of its subsidiaries. 10 Canadian Imperial Bank of Commerce ("CIBC"), the parent company to CIBC World Markets Inc. and CIBC World Markets Corp., has a significant credit relationship with this company. 11 The equity securities of this company are restricted voting shares. 12 The equity securities of this company are subordinate voting shares. 13 The equity securities of this company are non-voting shares. 14 The equity securities of this company are limited voting shares.

CIBC PRIVATE WEALTH MANAGEMENT INVESTMENT STRATEGY GROUP 4