Briefing highlights
- Windsor rides high as Calgary laid low
- Wells Fargo shares up after CEO replaced
- Global markets tumble
From auto crisis to oil shock
The fortunes of Canadian cities are shifting dramatically, along with their industries.
BMO Nesbitt Burns compared Windsor, Ont., once laid low by the recession-era auto industry crisis, to oil-shocked Calgary, and found a sharp reversal.
As BMO chief economist Douglas Porter noted, the auto centre of Windsor struggled under an unemployment rate that topped 15 per cent during the crisis, for the worst showing in the country.
Riding a string of strong North American vehicle sales, Windsor now boasts one of Canada’s lowest jobless rates, just 5.7 per cent, down four percentage points in a year.
“The unfortunate offset to the comeback in the auto sector is the steep reversal in the energy industry, and the ongoing trauma in Alberta,” Mr. Porter said, citing the fact that Calgary’s jobless rate has just about doubled amid the oil shock to 9.5 per cent.
Looked at another way, unemployment in Calgary sat eight percentage points below that of Windsor in 2009, and is now 3.8 points above.
Mr. Porter’s colleague, BMO senior economist Sal Guatieri, noted in a separate research note that Calgary’s jobless rate is outpacing that of many of its peers.
“Calgary’s unemployment rate is not only the highest among major cities in Canada, it’s relatively high compared with other hard-hit energy-producing regions in the United States,” Mr. Guatieri said. “And, it has risen a lot faster, with no end in sight.”
Wells Fargo up
Wells Fargo & Co. shares are up in premarket action after Wednesday’s shakeup at the scandal-ridden bank.
The stock was up about 1.5 per cent with several hours still to go before the New York open.
The American bank replaced John Stumpf as chief executive officer with Tim Sloan, a Wells Fargo veteran, after being pounded by the controversy over sales practices.
The move came just before the bank’s latest earnings report on Friday.
Politicians aren’t all that pleased with Mr. Sloan as they had been hoping for someone who would “refresh the corporate culture” at the bank, noted CMC Markets analyst Jasper Lawler.
“He has already courted controversy, saying Mr. Strumpf quitting was an ‘incredibly selfless act when you think about it,” Mr. Lawler said.
“Mr. Sloan’s tenure could end up being pretty short-lived.”
Stocks tumble
Global markets are flashing red everywhere but for China, whose trade numbers are helping to drive down stocks.
Tokyo’s Nikkei lost 0.4 per cent, and Hong Kong’s Hang Seng a steep 1.7 per cent. The Shanghai composite inched up 0.1 per cent.
In Europe, London’s FTSE 100, Germany’s DAX and the Paris CAC 40 were down by between 0.4 and 1.1 per cent by about 5:20 a.m. ET.
New York futures were also down.
“The unwelcome combination of Federal Reserve minutes, signifying a likely U.S. interest rate hike this year, and signs of slowing global growth from weak Chinese export data sent U.K. stocks lower on Thursday,” said CMC's Mr. Lawler.
Where markets ended Wednesday