- Recovery: Ottawa to allocate $1.5 billion in funding to help Canadians in hard-hit industries access skills training to transition to new jobs.
- Bonds: Yields on the 10-year US Treasury rallied last week to a seven-month high. Yields rise as bond prices fall, so the recent move signals investors were jumping on the positive vaccine news from Monday. US Treasury yields still remain below typical levels.
November 15, 2020
Support your local restaurants
Happy Monday. And a belated happy Diwali to anyone who celebrated over the weekend!
If you like The Peak, you'll love this one weird trick to learn about the news – reporters hate it!
If you like The Peak, you'll love this one weird trick to learn about the news – reporters hate it!
Markets
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TSX | 16675.64 | 0.56% |
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S&P 500 | 3585.15 | 1.36% |
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DOW | 29479.81 | 1.37% |
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NASDAQ | 11829.29 | 1.02% |
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Gold | 1896.00 | 0.52% |
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Oil | 40.68 | 0.52% |
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Dollar | 0.76 | 0.017% |
The Globe and Mail reports that a number of high profile hospitality businesses are on the brink of bankruptcy as government’s impose new restrictions to fight a second wave of COVID-19:
- Montreal’s storied boîte à chansons 2Pierrots announced it would close permanently.
- King Street Company, the owners of Toronto’s Jacobs and Buca, obtained creditor protection after owing nearly $35 million.
Why it matters: Canada’s hospitality sector accounts for $35 billion (2.5% of GDP) and 1.27 million jobs. Not to mention, our world-class bars, restaurants and venues are critical to our culture and a big part of why our cities are considered some of the world’s most liveable. A successful economic recovery depends on these businesses, and the jobs they create, to still be around.
What’s the problem? Inadequate support from the Federal Government and new restrictions on indoor dining threaten to undermine the entire industry.Restaurant owners express frustrating with delays over the Federal Government’s rent relief programs and argue that existing wage subsidies don’t go far enough.
What’s next: Look for provincial governments to intervene if the Federal Government can’t provide adequate relief in a timely manner.
What’s the problem? Inadequate support from the Federal Government and new restrictions on indoor dining threaten to undermine the entire industry.Restaurant owners express frustrating with delays over the Federal Government’s rent relief programs and argue that existing wage subsidies don’t go far enough.
What’s next: Look for provincial governments to intervene if the Federal Government can’t provide adequate relief in a timely manner.
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As America devises a plan to forcibly remove a delusional 75 year-old billionaire squatting in the Oval Office, China snuck in the Regional Comprehensive Economic Partnership (RCEP), a historic trade deal with 14 other Asia-Pacific countries.
What is it: The deal reduces trade tariffs and bureaucracy among members of the Association of South East Asian Nations, as well as China, Japan, Australia and New Zealand.
Why it matters: The real winner of the deal is China. Beyond the benefits of tariff reduction on Chinese goods, the agreement demonstrates how China has filled the policy void in the region left behind by President Trump.
- Canadian producers – left out of the agreement – may find it tougher to compete in Asia against reduced tarriff products originating in RCEP member-states.
Looking ahead: While President-elect Biden will look to improve relations in Southeast Asia, he’s vocally opposed to free trade agreements citing the loss of manufacturing jobs in the Midwest and is unlikely to enter into any new ones.
- And Canada? Prime Minister Trudeau is generally in favour of free trade but voters are much more divided over the issue which will likely discourage his government from entering into new trade agreements.
Uber for Elon? Yesterday, SpaceX, in partnership with NASA, successful launched four astronauts to the International Space Station on the shuttle ‘Resilience’.
Why it matters: Sunday’s launch marks the beginning of regular taxi missions into space by NASA astronauts abroad a private aircraft. More people means more research and that should result in accelerated innovation at the Station’s laboratory.
What’s the back story?
Nine years ago the Untied States decommissioned its space shuttle program. Since then, the Untied States has relied on Russian spacecraft to send NASA astronauts and supplies to the ISS.
- In 2014, NASA put out a request for private sector partners to help them develop a new spacecraft capable of multiple spaceflights per year. Both SpaceX and Boeing qualified for the program.
- While Boeing’s shuttles have been plagued by delays, SpaceX’s reusable rocket was certified by NASA earlier this year.
Looking forward: The SpaceX reusable Falcon 9 Booster is set to land in the ocean shortly and will be reused for the next launch in March with the current crew set to return in April. Boeing’s spacecraft is set to be tested early next year.
Doordash released their IPO prospectus and the question on everyone’s mind is, ‘will investors bite?’ (Last food pun).
What’s their pitch?
Unlike the rest of us, 2020 was actually a great year for Doordash.
What’s their pitch?
Unlike the rest of us, 2020 was actually a great year for Doordash.
- Boosted by restrictions on indoor dining, Doordash’s revenue grew 226% in the last months of 2020 vs. the previous year.
- The company, along with Uber, Lyft, and Instacart, won a California ballot initiative that overturns labour legislation that would’ve significantly affected Doordash's ability to operate in one of their largest markets.
Why it matters: The Doordash IPO is a test of investors appetite for their model of food delivery.
- Critics point out that, even in the midst of the pandemic, Doordash still lost money on every order and question whether the model can ever reach the efficiency needed to generate a profit.
- But Doordash is arguing that the pandemic has permanently accelerated consumer preferences to delivery. Their bet is that rapid growth will create economies of scale that can drive down costs and increase profit.We'll soon find out where investors stand...