Ian McGugan
Alex Salmond's scheme to boost worldwide tartan sales worked out beautifully, didn't it? And so, for that matter, did Jack Ma's plan to sell off a piece of his gigantic Chinese flea market, Alibaba.
The question this week is whether the business news will continue to be positive – and, just as important, how the happy tidings will be distributed geographically.
In North America, economists expect Canadian retail sales to enjoy a seventh straight month of gains when numbers for August are published Tuesday. They also foresee increases in existing and new home sales in the United States; figures for both will be reported this week.
But elsewhere the news isn't quite so shiny. To be sure, the defeat of Mr. Salmond's bid to lead Scotland to independence removes one uncertainty from European politics. Unfortunately, the continent's economy – at least in the euro zone – continues to stagger along with the dazed look of someone emerging from a Mario Draghi lecture on his latest monetary sorcery.
China's economy, too, is showing signs of weakness despite Mr. Ma's success in pulling off the largest IPO in U.S. history. The enthusiastic reception that investors gave to Alibaba stock in New York demonstrates that U.S. investors are in a jovial mood. It also spotlights the growing gap between a recovering North American economy and a less happy outlook elsewhere.
China's check-up
Is it just a sprain or is something broken?
Last week came news that growth in China's industrial production was limping along at its most sluggish pace since the financial crisis, while electricity production fell for the first time in four years. Soon after, the People's Bank of China decided to inject $81-billion (U.S.) into the nation's financial system, presumably as a central banker's version of a get-well-soon card.
On Monday, the HSBC Flash China Manufacturing PMI will provide a fresh check-up on the state of the country's factories. Economists predict the gauge will ease down slightly to 50.1 from the previous 50.2. (Any number above 50 indicates the sector is expanding.) If the number is significantly higher or lower, expect a vigorous market reaction.
The issue, of course, is that any queasiness in China means more acute pain elsewhere – especially in countries such as Canada and Australia that have large resource sectors devoted to feeding the Middle Kingdom's appetite for raw materials.
One worrisome sign is that China's real estate frenzy, a key driver of the domestic economy, appears to be fading fast. Prices for new homes dropped in 68 out of 70 Chinese cities in August, according to numbers released last week by the country's National Bureau of Statistics.
For China watchers, falling home prices provide one more reason to keep the pain medication handy.
Wanted: a game changer
As the announcers say on Sunday afternoons: This game is getting ugly.
Except this time the sentiment doesn't apply to a fourth-quarter blow out. It describes the inglorious state of the National Football League.
After decades of hiring large, violent men to inflict brutal punishment on one another, the NFL is being forced to grapple with the consequences of that behaviour off the playing field. A flurry of domestic violence charges against star players, as well as an admission by the league that many former NFLers will develop cognitive disabilities, is causing sponsors to slowly – very slowly – inch away.
Indra Nooyi, chief executive of PepsiCo, said last week that she is deeply disturbed by the "repugnant behaviour" of some players. Anheuser-Busch InBev told the league it wasn't satisfied with its handling of "behaviours that so clearly go against our own company culture and moral code."
Campbell Soup and McDonald's Corp. also issued statements condemning domestic violence. But none of the sponsors actually ended its association with the league.
So expect the questions to be fierce when Nike Inc. delivers its earnings on Thursday. The world's largest sporting goods maker suspended its endorsement deal with Minnesota Vikings running back Adrian Peterson after allegations of child abuse and severed its association with Baltimore Ravens running back Ray Rice after a video showed him knocking his then-fiancee unconscious.
Nike, though, is still deeply involved with the NFL. Unless it, or another major company, cuts its ties to the sport, there's no real game-changer in sight.