These are stories Report on Business is following today. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
Canada posts third trade deficit Canada recorded its third consecutive trade deficit in May as a 5.7-per-cent climb in imports outpaced the 5.2-per-cent rise in exports. The trade deficit of $503-million compared with a shortfall of $330-million in April, Statistics Canada said today. Notable was that machinery and equipment led the surge in imports as volumes rose 4.2 per cent and prices 1.4 per cent. Export volumes rose 3.9 per cent and prices 1.2 per cent.
Notable, too, was a surge of 25.2 per cent in exports to the European Union. Exports to the United States, Canada's biggest trading partner, increased 5.5 per cent, while imports rose 5.8 per cent.
"With regards to the outlook for economic growth here in Canada, a widening trade deficit obviously is not good news," said Toronto-Dominion Bank economist Francis Fong. "However, given the divergent strength between Canada and its developed peers, this was to be expected; TD Economics expects net exports to detract from growth in the next two quarters, with real export growth of 4-6 per cent and real import growth in the 7-8 per cent range. This will likely change at the end of this year when the U.S. economic recovery finds more solid ground and net exports becomes a driver of growth by next year."
Separately, the U.S. Commerce Department reported that sharply higher imports from China helped push America's trade deficit to $42.3-billion in May, its highest since late 2008. The U.S. deficit with China, widely watched given U.S. complaints over how Beijing holds down its currency, hit its highest since October, at $22.3-billion (U.S.).
"These data are for May and therefore do not capture the slowdown in activity flagged up by more recent indicators," Paul Dales, U.S. economist for Capital Economics in Toronto, said of the U.S. numbers. "Indeed, the survey data suggest that the rapid rebound in both exports and imports growth seen over the last year will soon slow."
Markets take Portugal in stride Moody's Investors Service today cut its ratings on Portugal's debt by two notches, but the government isn't "grieving" and stock markets aren't overreacting. "There is no point grieving over this," the country's finance minister, Fernando Teixeira dos Santos said. "We have to do what the markets demand, which is swiftly put our public finances in order."
Taking some of the sting out of the downgrade, Greece raised €1.25-billion in its first sale of treasury bills since its bailout loans, an auction that was oversubscribed and marked another test of the government's efforts to pull back from the brink.
Despite the downgrade, and renewed fears related to China's overheated real estate markets, European stocks are up and Wall Street futures point to a slightly higher opening in New York. Strong earnings from Alcoa Inc. late yesterday and a rise in shares of BP PLC today appear to be setting the tone.
"The tepid market response to Moody's two-notch downgrade of Portugal's debt overnight (see below) may reflect some 'sovereign debt fatigue,' a preoccupation with the start of the earnings season or, perhaps, the fact that the ratings move was simply 'catch-up' to earlier downgrades by S&P," said RBC Dominion Securities fixed income strategist Mark Chandler and fixed income analyst Kam Bath. "Nevertheless, several weeks ago, such news would have sent equity markets reeling. As it stands, North American equity futures are up slightly more than 0.5 per cent."
- Moody's cuts Portugal's debt rating
- Greece raises €1.25-billion in T-bill auction
- German investor confidence plunges
BP instals sealing cap BP said late yesterday it had put a new sealing cap in place, but it could still be tomorrow before the energy giant knows whether the new measure will stop the flow of oil into the Gulf of Mexico. BP must monitor the result of installing the 80-tonne cap to determine whether the well has been badly damaged, Globe and Mail energy reporter Shawn McCarthy writes. The cap is a temporary measure until BP can complete work on a relief and permanently stop the blowout.
How men and women fare on the jobs front Last week's employment report from Statistics Canada showed a continued rebound in jobs from the depths of the recession. With some 93,000 jobs created in June and an unemployment rate below 8 per cent, employment is now just 0.8 per cent below the peak reached in October, 2008, BMO Nesbitt Burns deputy chief economist Douglas Porter notes. As the chart above shows, the rebound has been led by a surge among men 25 years and up. "In fact," Mr. Porter says, "employment among adult males has now reversed all its (heavy) recession losses, with a big helping hand from a snapback in construction payrolls. For adult females, it was a case of 'recession, what recession?' on the employment front."
Cat:e528746c-3414-401a-b14b-50247e3bdf01Forum:2d13dc33-9921-4d4a-815f-e809277631e4
Plans for regulator to be unveiled The team charged with setting up a national securities regulator unveils its blueprint today, the latest move in a 40-year struggle to replace the country's system of provincial bodies. Key to today's announcement, The Globe and Mail's Karen Howlett reports, is the fact that there won't be a centralized head office, but rather regional offices across the country. So far, Ontario and British Columbia are on board, and offices would be added as other provinces sign on. Alberta and Quebec are leading the fight against the move.
RIM holds annual meeting Executives of Research In Motion Ltd. could face some tough questions when the BlackBerry creator holds its annual meeting in Waterloo, Ont., today, analysts say. As always when talking about RIM these days, questions arise related to competition against the wildly popular iPhone from Apple Inc. RIM has proved the markets wrong time and time again, turning in strong earnings, and today meets its shareholders.
Analysts say RIM will have to prove it's on track for a "game changer" as competition heats up with the iPhone and others, notably smart phones using the Android operating system by Google Inc. "I would expect it to be the most dynamic meeting in the company's history," analyst Nick Agostino of Mackie Research Capital told The Canadian Press.
From today's Report on Business
- TransCanada faces industry pushback on pipeline tolls
- Calgary Stampede sees more upbeat mood
- A breath of (disclosure) fresh air for shareholders
- Setback at polls casts doubt on Japan's economic reforms
And, read our Streetwise blog and Your Business section