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Daily Pulse

Canada

Canada's two biggest cannabis companies report earnings this week, giving us the first glimpse -- however murky -- of what recreational sales look like. Aurora Cannabis Inc. reports fiscal 2018 earnings Monday morning and Canopy Growth Corp. reports Thursday after the close, followed by an analyst call on Friday. These earnings won't tell us much about what normalized legal sales will look like, as there were plenty of headwinds in the final quarter of 2018 that will undoubtedly impact results. However, they will help investors "gain a window into how the overall Canadian adult-use market is progressing, as well as the relative ability for LPs to execute and gain market share early on," Eight Capital analyst Graeme Kreindler wrote in a note last week. Kreindler expects significant quarter-overquarter growth in revenue, offset by higher costs and no meaningful cash flow or earnings before interest, taxes, depreciation and amortization.

United-States

With the clock ticking to avoid another partial government shutdown, talks over the weekend seeking an accord on border security broke down without agreement. President Donald Trump is due to go to El Paso, Texas, later today for a rally backing the construction of a wall as parties in Congress remain at loggerheads over immigration issues. While lawmakers could try to punt the standoff with another temporary funding deal, the president may resist signing such a bill, according to White House Chief of Staff Mick Mulvaney. Should there be no resolution, nine federal departments and related agencies would shut down again after Friday.

Europe

Gross domestic product for the U.K. increased a smaller-thanforecast 0.2 percent in the fourth quarter of 2018, with December seeing activity shrinking by 0.4 percent. Economists are predicting a more than 30 percent chance of the country falling into a recession in the next 12 months, according to a Bloomberg survey. While the news will not be welcomed by British Prime Minister Theresa May, she seems likely to be too busy trying avoid plunging out of the EU without a deal to give it much attention. Over the weekend, May sent a conciliatory letter to opposition Labour Leader Jeremy Corbyn as she tries to buy more time for negotiations ahead of the March 29 exit date.

Asia

Chinese Vice Premier Liu He will join Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer in Beijing for high-level trade talks this week, with Lighthizer recently warning that time is running short to make a deal ahead of the March 1 imposition of further tariffs on China. Trump said he wouldn't meet his Chinese counterpart Xi Jinping before the deadline runs out, but the president may be willing to delay the imposition of the tariffs if sufficient progress is made this week.

The author

Michel Doucet

Michel Doucet

Vice-President and Portfolio Manager
After obtaining a Bachelor's degree from the Faculty of Social Sciences at the Université du Québec in Montréal and his Master’s degree, Michel Doucet began his career as a junior economist at the National Bank head office in Montreal. In 1992 he joined the institutional equities and fixed income group at Lévesque Beaubien Geoffrion as an economist and market analyst. Over the years, he has led various projects related to the North American and international economies as well as Canadian public finances. In 1996, the team of institutional economists to which he belongs was ranked first in Canada by Brendan Wood International. In August 1997, Mr. Doucet joined the personal services division of Lévesque Beaubien Geoffrion where he served as an economist, fixed income market analyst and vice president. In 2004, he joined the Desjardins Securities full service team as Vice President. He now occupies the roles of fixed income strategist, economist and portfolio manager. He manages the Securities Portfolio Advisory Group, advisor marketing and distribution of financial planning and insurance.