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.
Goodbye, big spender These are not hard times on Wall Street by any measure, but year-end bonuses are taking a hit, the biggest since the financial crisis began, according to The Wall Street Journal.
Gone are some private jets for holiday getaways, catered meals, yachts, Lamborghinis and $65,000 watches, the newspaper said, as bonuses fall by between 22 per cent to 28 per cent. Besides the dip in the size of bonuses, there's also less cash because of new pay schemes urged by shareholders and regulatory authorities.
Here's how Wall Street bankers are coping, according to the report:
- Some are jet-pooling with strangers for holiday flights.
- Some are bringing their own lunches on board, rather than having catered meals.
- "It's a little quiet," Jeff Drajin of Manhattan Motorcars, a luxury outlet with Lamborghinis and Bentleys, told the newspaper.
- Yacht rentals in the Caribbean appear to be down.
- Demand for high-end watches at one Manhattan shop is still high, but the money is from Chinese and Brazilians.
U.S. retail sales rise U.S. retailers headed into the key holiday shopping season in a stronger position.
Retail sales in the United States climbed 0.8 per cent in November, more than projected, amid good signs for holiday sales. Numbers for October and September were also revised up today, giving even more pep to the data.
"Now one can say that stores had really stepped up to the plate this year and swung hard with more discounting, as well as more and longer days," said BMO Nesbitt Burns senior economist Jennifer Lee.
"Some stores started the Black Friday sales early, during the Halloween weekend. Some stores such as Sears, Wal-Mart and Toys "R" Us were open on Thanksgiving Day (which was a first for some).
"And retailers with online capabilities had a record Cyber Monday (non-store retailers grew 2.1 per cent in November, the heftiest monthly rise since December 2009). But given the still high rate of unemployment, the fact that core retail sales (excludes autos, building supplies and gas stations) jumped 0.9 per cent is darn encouraging,"
Economist Alistair Bentley of Toronto-Dominion Bank said sales will probably top pre-recession levels either this month or early next year, though employment in the industry is still 7.3 per cent shy of its pre-slump peak.
"This means U.S. retail firms are selling comparable levels of merchandise with only 92.7% of the work force - a trend which has been mirrored across the U.S. economy."
What to watch for from the Fed The last meeting of the Federal Reserve was actually the main event, as the U.S. central bank announced its $600-billion (U.S.) quantitative easing program, or QE2. The plan was aimed at driving down longer-term interest rates, in turn spurring borrowing and spending, through hefty purchases of longer-term Treasuries.
Still, today's meeting will be closely watched for how the Federal Open Market Committee, the central bank's policy-setting panel, views the latest indicators, which have been mixed.
Here's a primer on the 2:15 p.m. ET announcement from Scotia Capital currency strategist Sacha Tihanyi:
"Of particular interest will be how the FOMC's communication transmits the view of how subsequent economic data (including the highly disappointing November nonfarm payrolls) colours the outlook for the sufficiency of the $600-billion in additional QE.
"The extra fiscal boost coming from the extension of the hotly-debated tax cuts will provide support for domestic demand, but the lackluster employment and inflation data may still outweigh the marginal impact and remove tones of optimism from the Fed's message.
"All in all there is no reason to believe that such an outcome, if realized, will support the [U.S. dollar] and the market's positioning over the past two sessions speaks to the lack of enthusiasm over the Fed's communication ... This is the first post-QE2 statement, and if the Fed is to use adjustments in its forward looking pre-announced bond buying intentions as equivalent to policy rate changes, then the tone of the statement should draw much attention."
More bad news for bond market Recent losses in the bond market have breached some key technical levels that may presage further losses for investors in Government of Canada debt, Streetwise columnist Boyd Erman reports today.
The rout in bonds has been sharp and sudden, and many investors are suddenly underwater on bonds that they bought of late. Those who piled into Wal-Mart's huge offering two months ago, which went out the door so fast it set a record low for corporate borrowing costs, recently saw their bonds trading 5 points below par.
Trichet wants bigger bailout fund The chief of the European Central Bank is calling for a fatter bailout fund to deal with the burgeoning debt crisis.
"We're calling for maximum flexibility and maximum capacity, quantitatively and qualitatively," Jean-Claude Trichet told reporters yesterday.
So far, Greece and Ireland have taken bailout packages, and markets are speculating that Portugal and Spain could be next.
And today, Standard & Poor's warned it could downgrade Belgium's debt, given the political uncertainty in the country.
As markets focus on the continent's debt troubles, there are still some encouraging economic signs emerging. Industrial production in the euro zone, the 16 countries that use the common currency, climbed 0.7 per cent in October. That's weaker than expected but the second month of gains in a row.
Telus projects boost from wireless Telus Corp. today forecast profit and revenue increases next year, largely on its outlook for its wireless and data units.
The western telecom giant said in a statement it sees revenue increasing by between 1 per cent and 4 per cent, and earnings per share by between 9 per cent and 22 per cent.
"Next year's results are expected to benefit from the continuation of healthy wireless subscriber loading and accelerating adoption of wireless data services, as well as significantly reduced financing costs due to $2-billion in successful debt financings in the last 12 months at significantly lower interest rates," said chief financial officer Robert McFarlane.
Agrium in talks to sell AWB unit Agrium Inc. is in talks to sell the commodity management business of AWB Ltd., the Australian company it purchased.
The agricultural products concern said in a statement today it was releasing the information because of stories in the Australian press, adding it is in dicsussions with several parties.
"No definitive agreement has been entered into with respect to the sale of the commodity management businesses and accordingly no assurance can be given that any agreement will be entered into or any sale completed," it said.
In Personal Finance today
For charities, a few bucks here and there can add up. But to consumers, being asked for donations at retail stores can feel like a guilt trip. Find out how to give without the guilt.
Clients would be better off with a single, national designation, says Personal Finance columnist Rob Carrick.
A Toronto couple is quickly outgrowing their small income-generating property. Is it time to move on? Financial expert Kelley Keehn weighs in.
You need to have insurance, have a budget surplus and pay off high-interest debt, says columnist Preet Banerjee.
Last-minute shopping and overspending go hand in hand, so make a plan before you head out. Smart Cookies columnist Angela Self shares her tips.
In Technology today
An advocacy group focused on ending the trade in conflict minerals used in consumer electronics has released a report ranks technology firms' efforts in keeping conflict minerals out of their electronic devices.
Blogger Amber MacArthur offers some tips on making sure your passwords are strong enough to prevent a security breach. On Monday, Gawker.com revealed hackers had broken into their database of users and had published some user names and passwords.
From today's Report on Business