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Daily Pulse

One of our most accessible tools, this daily comment keeps you abreast of developments on the North American and international financial markets.

Michel Doucet

Michel Doucet
Vice-President and
Portfolio Manager

January 18, 2019

Canada

Canada is still conducting its security review of 5G telecommunications technology, and a decision on whether to restrict Huawei Technologies Co. is still at least months away, people familiar with the plans say. Canada’s security agencies continue to study the issue, including what potential security vulnerabilities exist, the people said, speaking on condition of anonymity because they weren’t authorized to discuss the issue publicly. That review could lead to a particular company, such as Huawei, being restricted or banned. They’re divided on how soon a decision will come. One said the decision is expected before the Canadian election in October, while others said it wasn’t imminent.

Canada’s statistics agency will stop releasing monthly merchandise trade data indefinitely because of the U.S. government shutdown. Statistics Canada said Thursday the next trade report, due Feb. 5, won’t be published as scheduled. The delay will likely last until after the U.S. Census Bureau resumes normal operations. Since 1990, the Canadian agency has been using U.S. figures to calculate the nation’s exports to its biggest trading partner. The shutdown in Washington isn’t just impacting the trade report. Export numbers are also used as inputs for quarterly gross domestic estimates, but Canada’s statistics agency said it will still be able to publish GDP numbers for the fourth quarter as scheduled because it has enough data from October and November to make calculations.

United States

U.S. Senate Majority Leader Mitch McConnell, Vice President Mike Pence and White House adviser Jared Kushner met for about 30 minutes on Thursday about the ongoing partial government shutdown, but no progress was made in ending the political stalemate, a person familiar with the discussion says. McConnell indicated that Republicans remain unified about the need for a barrier along the U.S.-Mexican border.



Walmart Inc. resolved a dispute that will allow its stores to continue participating in CVS Health Corp.’s pharmacy networks to provide drugs to patients through commercial and Managed Medicaid programs. The agreement comes only days after Walmart said it would withdraw from CVS prescription networks in a dispute over pricing. The retailer indicated it was resisting efforts by CVS to steer consumers to certain pharmacies to have their prescriptions filled. Walmart’s continued participation gives CVS some 68,000 pharmacies participating in its network throughout the U.S.

Europe

Michelin Chief Executive Officer Jean-Dominique Senard, a frontrunner to replace Carlos Ghosn atop Renault SA, has passed one of the tests required for the job: Support of the French state. Senard, 65, has boosted profitability during his seven years at the helm of the French tiremaker, winning the favor of the government -- Renault’s biggest shareholder. The carmaker said Thursday it will seek new governance, almost two months after Chairman and CEO Ghosn was detained in Japan for alleged financial misdeeds.

Asia

Japan’s key inflation gauge slowed again in December, highlighting the difficulty of reaching the central bank’s 2 percent price goal and its dependence on oil prices. Consumer prices excluding fresh foods rose 0.7 percent from a year earlier in December, for the first back-to-back slowdown since April as energy costs offered less support for inflation, according to the ministry of internal affairs Friday. That’s slightly weaker than a median estimate of 0.8 percent.

  

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