Good morning all! An interesting batch of stories here to keep you in tune with the business chatter of the day. But a tidbit of trivia to start you off: Microsoft (Micro-Soft) was founded on April 4, 1975 as a partnership between Bill Gates and Paul Allen to develop and sell interpreters for the BASIC programming language for the Altair 8800, arguably the first personal computer.
Natural gas producers and analysts want to solve a mystery: Who signed a century-long contract to ship gas on TransCanada’s pipeline system? As Geoffrey Morgan writes, the typical contract period is about 25 years in an open-season bidding process, though this recent process averaged out at a whopping 107 years. As one observer noted, someone must have bought a far lengthier contract in order to pull the average down to 107. “I just don’t understand how you can run your business with a 100-year time horizon,” another said.
‘CAR BIZ IS HELL’
Elon Musk says he is “back to sleeping at the factory” while trying to fix production delays with the Model 3 electric car. He did the same with Tesla’s Model X — keeping a sleeping bag near the production line so he could immediately address any hiccups. Tesla’s Q1 production numbers fell short of its forecasts: It built 2,020 Model 3 cars in the past seven days, well short of its target for 2,500 units. It delivered 8,180 of the sedans in the first three months of 2018, missing analysts’ estimates for about 8,800 units. It’s not clear where the current bottlenecks are, whether it’s with robots at Tesla’s battery Gigafactory in Germany or with car assembly in California. But if the sleeping bag is in California …
SAME OLD STORY?
The bull market narrative has taken a dark turn, but has anything really changed? Joe Chidley takes a dive in to the reasons, such as the end of FANG’s rocket ride upward and Trump’s buzzkill on the revived growth of global economies. Chidley considers whether the world has really changed much in a month or whether this correction will eventually turn around like the five other ones (on the S&P 500) that have failed to stop this bull market.
Interest rate hikes are going to pinch this one province hardest — and it’s not the one you think it is. “Given expensive housing markets in B.C. and Ontario, it would be natural to assume that households in those provinces would be the most vulnerable,” RBC’s Robert Hogue said. But no. One other province may feel the impact of higher rates sooner, as 18% of mortgage borrowers there have terms of two years or less, by far the highest share in the country. The average household there had $124,000 in mortgage debt, with term loans, credit lines and leases adding another $68,000.
President Trump wants a NAFTA draft by next week, so he can announce an updated pact at the Summit of the Americas that begins April 13 in Peru. The countries’ negotiators will try to work fast magic on the most contentious issues and try to finish work on topics where there’s more consensus. The U.S. wants to wrap up its biggest trade pact as stocks tumble on concern Trump’s protectionism is sparking a trade war.