/Posthaste: Golden arches’ veggie test, tax break for Canada’s richest — and where to run when both stocks and bonds go bad

Posthaste: Golden arches’ veggie test, tax break for Canada’s richest — and where to run when both stocks and bonds go bad


Good morning!

News from McDonald’s this morning had Beyond Meat investors salivating. The faux-meat maker’s shares were up 13% in premarket trading after McDonald’s revealed it was launching its first global test of a Beyond Meat sandwich in Canada. Starting Sept. 30, the PLT, which stands for plant, lettuce and tomato, will be tested for 12 weeks in 28 stores in southwestern Ontario so that the fast-food giant can assess the “real-world implications.” The PLT will cost a little more than a Quarter Pounder at $6.49 plus tax. Burger King uses Beyond Meat’s rival Impossible Food for its veggie burger in the U.S.

Talk about no place to hide. Typically when stocks do well, bonds don’t and vice versa, but Capital Economics is forecasting that for the rest of the year both bonds and equities will struggle. So far the S&P500 has delivered 50% returns and an index of Treasuries 8%, but Capital predicts stock returns will turn negative and Treasuries sink just above 0% as the Fed fails to ease by more than investors are assuming. Capital says this has happened before over the past 30 years, most notably in 2015 during worries about a hard landing in China; at the back end of the financial crisis; in parts of the dotcom crash and during the Fed’s 1994 tightening cycle. In each case, Capital says, expectations of corporate earnings proved too optimistic and the Fed, despite that, either signalled tightening or eased by less than investors hoped.

Another headache for oil traders today after the U.S. announced it was slapping penalties on Chinese tanker firms for continuing to transport Iranian oil. China is the world’s biggest oil buyer and the news send crude traders in Asia scrambling to cancel bookings, reports Bloomberg. The sanctions could also complicate U.S., China trade talks.

Here’s what’s you need to know this morning:

  • CIBC hosts its annual Eastern Institutional Investor Conference. Executives from 65 companies will be speaking, including CIBC CEO Victor Dodig, RBC’s CFO Rod Bolger, Rogers Communications CFO Tony Staffieri and Corus Entertainment CEO Doug Murphy
  • The Elevate tech conference hosts speakers including Michelle Obama, Chris Hadfield, and Martha Stewart
  • Unifor national president Jerry Dias holds news conference in Regina to provide update on bargaining and job action involving Saskatchewan’s seven Crown corporations
  • The 2019 Global Business Forum in Banff discusses the impact of rising powers, nationalistic narratives, demographic challenges and technological advancements
  • United Steelworkers Forest & Manufacturing Workers hold a roadside rally in front of the Western Forest Products office in Campbell River, B.C.
  • The Canadian Council for Aboriginal Business and the Shareholder Association for Research and Education announce in Richmond, B.C. the official release of their new report, Moving Capital, Shifting Power
  • Economic Development Minister Ranj Pillai announces in Whitehorse a new immigration initiative in Yukon.
  • Corporate Events: Canopy Rivers AGM
  • Notable Earnings: Micron Technology
  • Today’s Data: U.S. GDP, U.S. pending home sales

Canada’s richest are getting richer with a little help from government. A study by Statistics Canada shows that incomes of Canada’s 1% grew faster than the rest of us in 2017 and their taxes edged down. The ones who saw the biggest income surge were the super-rich. Earners in the top 0.01 per cent ($2.7 million plus) enjoyed a 27% income hike, the fourth biggest annual increase in 35 years. The tax cut, came from the provincial level, especially in Quebec (Ottawa actually hiked the tax rate on the highest income bracket in 2016). Nonetheless, the wealthy 1% saw their overall effective tax rate drop from 31.3% to 30.9% in 2017.

 

— Please send your news, comments and stories to pheaven@postmedia.com. — Pamela Heaven @pamheaven

With files from The Canadian Press, Thomson Reuters and Bloomberg

 

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