The Daily Chase: Honda's EV announcement, U.S. GDP slows
Here are five things you need to know this morning.
Honda set to announce plans for Canadian-made EVs: Our colleagues at Bloomberg broke this news earlier this week, but today’s the day that Honda’s plan to build electric vehicles in Canada becomes official. At 10 a.m. in Alliston, Ont., Honda will announce plans to expand its facilities that currently make gas-powered Civics and CRVs to build electric vehicles in Canada. Bloomberg reports that Honda has committed $15 billion to the plan. They won’t be going it alone, however, as officials from the provincial and federal governments will be on hand at the press event. Details of how much taxpayers will be kicking in are still scarce, and Bloomberg reports that the government commitment will be a moving target, dependent on how much Honda spends on the project. Honda also plans to invest in a cathode materials facility and a battery components plant elsewhere in the province, but those will involve other companies and the exact details will likely come later. We’ll have all the details of what we do know as they emerge, starting a little after 10 a.m. ET.
Meta stock tumbles on ballooning costs: Meta released earnings after markets closed yesterday, and the numbers from the technology giant landed with a thud. While the company stayed mostly in line with expectations on profit and revenue, the company says its costs are going to be much higher than anticipated, rising to as much as US$40 billion this year largely on AI and other infrastructure expenses. That sent the shares tumbling, down by more than 14 per cent at one point premarket this morning. If those losses hold to the open, it would represent a wipeout of roughly $185 billion in shareholder value, and be Meta’s worst one-day decline since October 2022. But it’s important to view that sell-off within the broader context. Meta’s shares are up almost 40 per cent in 2024, and are up by more than 400 per cent since that aforementioned sell-off in late 2022.
BHP shakes up commodities with big bet: The world’s largest mining company, BHP Group Ltd., has made a takeover offer to Anglo American PLC in an all-stock transaction that values the latter company at almost US$40 billion. Australia-based BHP is offering a 28 per cent premium for Anglo American shares in a deal that would make the world’s biggest mining company even bigger, securing control of 10 per cent of the world’s working copper supply. Copper prices have been surging in recent months in anticipation of a looming supply gap for the world’s most commonly used industrial metal. If the deal goes through it would be far and away the biggest merger in the global commodity industry in more than a decade, and could mark a return to consolidation in the sector that has a history of it. Analysts aren’t at all convinced that it’s a done deal, however, as other bidders may emerge.
U.S. GDP shows economy is slowing: Fresh numbers out of the U.S. this morning suggest the economy is slowing in Canada’s largest trading partner. The Bureau of Economic Analysis says the country’s gross domestic product expanded at an annualized rate of 1.6 per cent in the first quarter. That’s less than half the pace of 3.4 per cent clocked at the end of 2023. It’s also the slowest pace in two years and well short of the 2.5 per cent pace that economists were expecting.
Clock ticking on TikTok in U.S.: The clock is officially ticking on TikTok in the U.S. after U.S. President Joe Biden signed into law a bill that passed through the House and Senate that orders the company’s Chinese owners to sell the company or face a ban. The bill sailed through Congress earlier this year and while there was some doubt it would get through the Senate, it passed a vote in the upper chamber this week as the bill was attached to a sprawling foreign aid bill. Technically, the company now has 270 days to divest itself or face a ban in the U.S. TikTok owner ByteDance, however, is vowing to pull out all the legal stops to halt the bill, alleging among other things that it impinges on its users' right to free speech.