MORNING NEWS CALL Powered by Re ute rs

Canada Edition Friday, July 30, 2021

TOP NEWS • Chevron tops profit estimates, joins share buyback stampede Chevron reported its highest profit in six quarters and joined an oil industry stampede to reward investors with share buybacks, as rebounding crude oil prices carried earnings and cash flow to pre-pandemic levels.

• Fed's Powell bets economy will navigate new coronavirus surge Federal Reserve Chair Jerome Powell's belief that the U.S. economy has "learned to handle" the coronavirus and won't be swamped in a fresh wave of infections or by rising inflation may get tested in coming weeks as schools reopen, supply chains remain clogged, and federal unemployment benefits wane.

• 's spectrum auction raises record $7.2 billion as firms gear for high-speed internet Canada's auction of 3500 MHz spectrum, which is key for next generation 5G networks, generated a record $7.2 billion, with the country's three dominant telecom companies accounting for more than 80% of the amount raised.

• Restaurant Brands revenue beats estimates on Burger King sales boost Burger King parent Restaurant Brands beat estimates for quarterly revenue, as more customers ate out after COVID-19 restrictions in Canada and the United States were eased.

• Caterpillar adjusted profit rises as economic growth drives demand Caterpillar reported a rise in second-quarter adjusted profit, as a recovery in global economic activity from pandemic lows fueled demand for its heavy machinery and construction equipment.

BEFORE THE BELL Futures for Canada's main stock index fell, weighed by weaker commodity prices, while investors awaited GDP data for cues about the pace of economic recovery. U.S. stock futures fell, while investors awaited a key inflation report. European stocks dropped from record highs as concerns about the fast-spreading Delta variant and regulatory actions in China outweighed optimism around quarterly earnings season and an economic recovery. Japan's Nikkei closed at its lowest since the start of the year. The U.S. dollar was little changed as dovish remarks by the U.S. Federal Reserve together with underwhelming economic data took the steam out of a month- long rally. Gold prices slipped. Oil prices were in the red.

STOCKS TO WATCH

Results • Restaurant Brands International Inc: The Burger King parent beat estimates for quarterly revenue, as more

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DATA IS JUST 1 THE BEGINNING ~ MORNING NEWS CALL - CANADIAN EDITION Jul 30, 2021 customers ate out after COVID-19 restrictions in Canada and the United States were eased. For Restaurant Brands, same-store sales at Tim Hortons — its biggest revenue maker — jumped 27.6% in the second quarter, while those at Burger King rose 18.2%. Net income attributable to common shareholders rose to $259 million, or 84 cents per share, from $106 million, or 35 cents per share, a year earlier. The company's total revenue increased to $1.44 billion in the second quarter ended June 30, compared with $1.05 billion a year earlier. IBES data from Refinitiv had estimated revenue of $1.37 billion.

• Turquoise Hill Resources Ltd: The Canadian miner on Thursday beat estimates for second-quarter profit, bolstered by a strong output from the Oyu Tolgoi mine in Mongolia and higher prices of copper and gold. Turquoise Hill's copper production from Oyu Tolgoi stood at 36,735 tonnes in the quarter, compared with 36,495 ounces last year. Its gold output more than tripled to 113,054 ounces. Turquoise Hill's all-in sustaining costs fell 32% to $1.48 per pound of copper produced in the quarter. Its income attributable to the owners of the company was $96.9 million, or 48 cents per share, for the three months ended June 30, compared with $72.6 million, or 36 cents per share, a year earlier.

In Other News • Canadian Pacific Railway Ltd & Canadian National Railway Co: Canadian Pacific Railway on Thursday asked Kansas City Southern shareholders to vote against a deal with Canadian National Railway at a meeting next month. Kansas City shareholders should reject Canadian National's $33.6 billion bid as there are regulatory risks involved, Canadian Pacific said in a regulatory filing, adding that the proposed acquisition can be decided later. The terms of Canadian National's deal would bind Kansas City shareholders with the merger agreement until next year, "instead of being free to pursue other opportunities that may be in the best interests of KCS stockholders," Canadian Pacific Railway said.

• TransAlta Renewables Inc: BHP said it would build two solar farms and a battery storage system in partnership with Canada's TransAlta Renewables at its nickel project site in Western Australia. The global miner said the project will help reduce carbon emissions by 12% compared with 2020 levels at its Mt Keith and Leinster operations, where power is currently being generated through diesel and gas turbines. The proposed solar farms will also help produce sustainable low-carbon nickel used in electric-vehicle batteries, BHP said, for which the company signed a supply agreement with Tesla last week. BHP said the construction of the farms is scheduled to begin in the second quarter of 2022 and would take 12 to 14 months for completion.

COLUMN Inflation angst but markets fear 'hawkish error': Mike Dolan Inflation is rising everywhere - but bond investors now appear more worried about central banks overreacting than being asleep at the wheel. Whether the current spike in inflation rates proves durable or not, the milestones are clocking up and businesses around the world are increasingly anxious.

ANALYSTS' RECOMMENDATION • Kinross Gold Corp: raises rating to outperform from sector perform, saying operational risk overhanging the company is falling away.

• Stingray Group Inc: RBC raises target price to C$10 from C$9, following modest upward revisions to broadcast and commercial music forecast.

ECONOMIC EVENTS (All timings in U.S. Eastern Time) 0830 (approx.) GDP mm for May: Expected -0.3%; Prior -0.3% 0830 (approx.) Producer prices mm for June: Prior 2.7% 0830 (approx.) Producer prices yy for June: Prior 16.4% 0830 (approx.) Raw materials prices mm for June: Prior 3.2% 0830 (approx.) Raw materials prices yy for June: Prior 40.1% 1100 (approx.) Budget balance for May: Prior -C$ 31.44 bln 1100 (approx.) Budget, year-to-date for May: Prior -C$ 314.00 bln

COMPANIES REPORTING RESULTS July 30: Capital Power Corp: Expected Q2 earnings of 42 Canadian cents per share Enbridge Inc: Expected Q2 earnings of 57 Canadian cents per share

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DATA IS JUST 2 THE BEGINNING ~ MORNING NEWS CALL - CANADIAN EDITION Jul 30, 2021

George Weston Ltd: Expected Q2 earnings of C$1.87 per share Imperial Oil Ltd: Expected Q2 earnings of 56 Canadian cents per share Snc-Lavalin Group Inc: Expected Q2 earnings of 37 Canadian cents per share Telus International Cda Inc: Expected Q2 earnings of 21 cents per share

August 3: Companies Inc: Expected Q2 earnings of 98 cents per share Canaccord Genuity Group Inc: Expected Q1 earnings of 59 Canadian cents per share Cargojet Inc: Expected Q2 earnings of C$1.04 per share Finning International Inc: Expected Q2 earnings of 45 Canadian cents per share Gibson Energy Inc: Expected Q2 earnings of 21 Canadian cents per share Great-West Lifeco Inc: Expected Q2 earnings of 79 Canadian cents per share Innergex Renewable Energy Inc: Expected Q2 earnings of 10 Canadian cents per share Sleep Country Canada Holdings Inc: Expected Q2 earnings of 32 Canadian cents per share Stella-Jones Inc: Expected Q2 earnings of C$1.47 per share

CORPORATE EVENTS (All timings in U.S. Eastern Time) 0800 Turquoise Hill Resources Ltd: Q2 earnings conference call 0830 Fairfax Financial Holdings Ltd: Q2 earnings conference call 0830 Snc-Lavalin Group Inc: Q2 earnings conference call 0900 Dundee Precious Metals Inc: Q2 earnings conference call 0900 Enbridge Inc: Q2 earnings conference call 0900 George Weston Ltd: Q2 earnings conference call 0900 Yamana Gold Inc: Q2 earnings conference call 1030 Telus International Cda Inc: Q2 earnings conference call 1100 Canfor Corp: Q2 earnings conference call 1100 Capital Power Corp: Q2 earnings conference call 1100 Imperial Oil Ltd: Q2 earnings conference call 1130 Eldorado Gold Corp: Q2 earnings conference call

EX-DIVIDENDS Bank of : Amount C$1.06 Emera Inc: Amount C$0.63 MTY Food Group Inc: Amount C$0.18

(All analysts' estimates are according to I/B/E/S Refinitiv data)

(Morning News Call - Canada edition will not be published on Monday, August 2 on account of the Civic Holiday)

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DATA IS JUST 3 THE BEGINNING ~ MORNING NEWS CALL - CANADIAN EDITION Jul 30, 2021

PICTURE OF THE DAY

A 91-foot (28 metres) tall balloon made in the likeness of Dutch post-impressionist artist Vincent Van Gogh rises above the waterfront, as part of a promotion for the Immersive Van Gogh Exhibit in Toronto, Ontario, July 28. REUTERS/Kyaw Soe Oo

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