INVESTMENT STRATEGY GROUP MARKET BEAT Monday, November 09, 2020 MACRO VIEW Market Indicators Index Level* Change YTD YTD (C$) The TSX (+1.9%) hit a two-month high and Wall Street’s main indices S&P/TSX 16,590.29 1.89% -2.8% -2.8% rallied after the pharmaceutical company Pfizer said its experimental S&P 500 3,620.68 3.17% 12.1% 11.8% COVID-19 vaccine was more than 90% effective in drug trials. West NASDAQ 12,097.34 1.70% 34.8% 34.5% Texas Intermediate crude oil (+10.1%) prices rose, supported by a Dow Jones 29,587.54 4.46% 3.7% 3.4% Saudi oil minister’s comment that OPEC output cuts could be adjusted Nikkei 225 24,839.84 2.12% 5.0% 8.1% to offset rising supply and weak demand. Gold (-4.3%) retreated as Euro Stoxx 50 3,426.85 6.95% -8.5% -3.5% stock markets rallied on positive vaccine news. North American bond FTSE EM 2,505.24 1.75% 8.4% 8.1% yields jumped in morning trade with the U.S. 10-year at 0.96% and the Canadian 10-year at 0.78%. The Canadian dollar strengthened against Canadian Market Movers the greenback to a 2-year high following news of a promising COVID-19 vaccine development. SU Suncor Energy 17.7% CVE Cenovus Energy 14.6% CANADIAN MARKETS CNQ Can Natural Res 14.2% IMO Imperial Oil 11.7% Air Canada (AC, +19.6%) reported Q3 revenue of $757 million but missed BAM/A Brookfield Ass 10.9% consensus by 29%. AC posted an adjusted EBITDA loss of $554 million, SHOP Shopify Inc -6.9% which excludes contributions from the Canada Emergency Wage Subsidy KL Kirkland Lake Go -8.0% program (CEWS), missing consensus expectations of a loss of $514 ABX Barrick Gold Crp -8.4% million. Cash burn came in at $9 million/day, lower than the company’s AEM Agnico Eagle Min -8.9% prior guidance of $15 million/day to $17 million/day. It plans to reduce K Kinross Gold -9.8% its available seat miles capacity by 75% year-over-year (Y/Y) in Q4. *As of November 9 2020 10:31 AM. Source: Bloomberg Canopy Growth (WEED, +7.6%) reported net revenue of $135 million beating consensus of $118 million. Adjusted EBITDA came in at a loss of U.S. Market Movers $86 million, slightly better than consensus expectations for a loss of $87 SPG Simon Property 20.1% million. Based on the company’s own proprietary market share tracker, AXP American Express 18.3% it increased its Canadian recreational market share by 200 basis points to 15.5%. It noted that it is working on implementing initiatives to yield SLB Schlumberger Ltd 16.4% between $150 million and $200 million in cost savings. Aurora Cannabis BKNG Booking Holdings 15.7% COP Conocophillips 14.4% (ACB, +15.9%) reported Q1/F21 revenue of $68 million which was higher than the consensus of $64 million. ACB reported an adjusted EBITDA loss LOW Lowe'S Cos Inc -5.0% of $10.5 million (excluding restructuring payments of $47.4 million) ABT Abbott Labs -5.1% which was higher than the street’s expectations for a loss of $9 million. TMO Thermo Fisher -5.3% Aurora expects to generate positive adjusted EBITDA in Q2/F21. NFLX Netflix Inc -5.5% Brookfield Infrastructure Partners (BIP.UN, +5.8%) posted funds from FDX Fedex Corp -8.1% operations (FFO) and adjusted EBITDA that topped consensus. The *As of November 9 2020 10:31 AM. Source: Bloomberg results from its utilities segment were impacted by the weakness in the Brazilian real. However, after adjusting for the depreciation in the Benchmark Bonds & Rates Brazilian real, net income across all segments showed Y/Y 1 1 2 2 Chg Yld Dec-20 Mar-21 improvement. CA 2YR 0.02% 0.28% 0.35% 0.35% Canaccord Genuity (CF, +6.8%) announced Q2/21 adjusted EPS of CA 10YR 0.13% 0.78% 0.70% 0.80% $0.28, ahead of consensus of $0.17. CF generated a revenue of $390.4 US 2YR 0.03% 0.18% 0.25% 0.30% million, beating consensus at $342 million. The primary reason for the US 10YR 0.14% 0.96% 0.80% 1.00% beat was a growth of over 150% in investment banking revenue in 1 2 2 Rate Dec-20 Mar-21 Australia, Canada, and the U.S. CA Prime 2.45% - - Equinox Gold (EQX, -8.4%) reported inline cash flow from operations CA Overnight Tgt 0.25% 0.25% 0.25% (CFO) per share for Q3/20. It produced 124,867 ounces of gold, below Fed Funds Tgt 0.25% 0.13% 0.13% 1 - As of November 9 2020 10:31 AM.; 2 - CIBC forecasts. Source: Bloomberg CIBC PRIVATE WEALTH MANAGEMENT INVESTMENT STRATEGY GROUP 1 Market Beat Currencies & Commodities the consensus forecast at 134,000 ounces of gold. EQX noted all mines Price* Change YTD are operating in-line with guidance except for Los Filos. C$/US$ 0.772 -0.009 0.3% Vermilion Energy (VET, +16.8%) announced Q3/20 CFO per share that US$/€ 0.844 -0.002 -5.4% beat consensus. It produced 95.5k boe per day, slightly ahead of Gold $1,864.26 -$87.06 22.9% consensus at 94.6k boe per day. VET reduced the upper-end of 2020 Copper per 100 lb $318.50 $3.10 12.7% production guidance by 2k boe per day to 94-96k boe per day. Oil (WTI) $40.81 $3.66 -33.2% CCL Industries (CCL.B, +5.1%) will acquire Kuala Lumpur based, Super Oil (WCS) $31.54 $3.56 -18.2% Enterprises Printing along with its China’s operation for US$20 million. Natural Gas (NYMEX) $2.84 -$0.04 29.9% Super Enterprises generated approximately US$26 million in revenue and Natural Gas (AECO) $2.04 -$0.18 19.3% *As of November 9 2020 10:31 AM. Source: Bloomberg US$3 million of adjusted EBITDA over the past 12 months. U.S. MARKETS Equity Indices YTD 120 Pfizer (PFE, +6.1%) and BioNTech (BNTX, +10.9%) announced that its 110 COVID-19 vaccine was found to be effective in over 90% of participants 100 from its phase-3 clinical trials. The results were discovered in study 90 participants who were not previously infected with COVID-19. Shares of 80 travel companies also received a boost from the promising study results, 70 with Royal Caribbean (RCL, +30.9%), Carnival (CCL, +36.7%), Norwegian (NCLH, +25.3%), United Airlines (UAL, +16.3%), American 60 Airlines (AAL, +14.6%) Delta Airlines (DAL, +13.3%) and Southwest 31 Jul 31 30 Apr30 31 Jan 31 31 Oct 31 30 Jun 30 30 Sep30 31 Mar31 29 Feb 29 31 Aug31 31 Dec 31 Airlines (LUV, +14.6%) all posting gains. May 31 S&P/TSX Dow Jones S&P500 McDonald’s (MCD, +1.7%) posted a profit of US$2.22 per share for its third quarter, beating the consensus expectation of US$1.90 per share. Revenue of US$5.42 billion also came in above the consensus estimate. Earnings Releases Q3 global comparable sales fell 2.2% year-over-year (Y/Y) and were in Name Date Est. Act. line with consensus while U.S. comparable sales topped expectations. Mcdonalds Corp (MCD) 11/09 $1.91 $2.22 * Wheaton Precious (WPM) 11/09 $0.33 -- * Party City (PRTY, +23.7%) reported Q3/2020 EPS of US$0.10, surpassing an anticipated consensus loss of US$0.32 per share. Revenue also beat, Simon Property (SPG) 11/09 $2.28 -- * and the company provided better-than-expected guidance. Brookfield Infra (BIP) 11/09 $0.11 $0.19 * Intl Flvr & Frag (IFF) 11/09 $1.45 -- * Volkswagen’s (VOW3, +7.6%) heavy truck segment, Traton SE (8TRA, Canopy Growth Co (WEED) 11/09 -$0.40 $0.01 +7.0%), has finalized its deal to take over the large vehicle Occidental Pete (OXY) 11/09 -$0.77 -- * manufacturer, Navistar (NAV, +0.7%). Traton will pay US$3.7 billion to Howmet Aerospace (HWM) 11/09 $0.05 $0.03 * acquire the shares of Traton it doesn’t already own. Can Apartment (CAR-U) 11/09 $0.57 -- Berkshire Hathaway (BRK.A, +6.6%) reported a rise in its overall Ivanhoe Mines Lt (IVN) 11/09 -$0.02 -- * Q3/2020 earnings, helped higher by a jump in the value of its stock Norwegian Cruise (NCLH) 11/09 -$2.24 -- * portfolio. However, operating profit was lower year-over-year with the Air Canada (AC) 11/09 -$2.85 -$2.31 company’s insurance underwriting segment weighing on performance. Equinox Gold Cor (EQX) 11/09 $0.27 $0.21 Source: Bloomberg * = USD Economic Calendar - Canada Economic Calendar - U.S. Day Release Prior Est. Actual Day Release Prior Est. Actual 11/9 Bloomberg Nanos Confidence 52.5 -- 52.5 11/10 NFIB Small Business Optimism (Oct) 104 104.2 -- 11/16 Bloomberg Nanos Confidence 52.5 -- -- 11/10 JOLTS Job Openings (Sep) 6493 6500 -- 11/16 Manufacturing Sales MoM (Sep) -2.00% -- -- 11/11 MBA Mortgage Applications 3.80% -- -- 11/16 Existing Home Sales MoM (Oct) 0.90% -- -- 11/12 CPI MoM (Oct) 0.20% 0.20% -- 11/16 Bloomberg Nov. Canada Economic Survey () 0 0 0 11/12 CPI Ex Food and Energy MoM (Oct) 0.20% 0.20% -- 11/17 Housing Starts (Oct) 209.0k -- -- 11/12 CPI YoY (Oct) 1.40% 1.30% -- 11/17 Wholesale Trade Sales MoM (Sep) 0.30% -- -- 11/12 CPI Ex Food and Energy YoY (Oct) 1.70% 1.70% -- 11/17 Int'l Securities Transactions (Sep) 15.51b -- -- 11/12 CPI Index NSA (Oct) 260.28 260.474 -- 11/18 Teranet/National Bank HPI MoM (Oct) 1.10% -- -- 11/12 CPI Core Index SA (Oct) 269.264 269.576 -- 11/18 Teranet/National Bank HPI YoY (Oct) 6.70% -- -- 11/12 Real Avg Weekly Earnings YoY (Oct) 4.10% -- -- Source: Bloomberg Source: Bloomberg BRAD BROWN, CFA - SR.