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EI claims on rise Claims for jobless benefits in Canada took a surprising jump in May, rising for the first time in eight months, driven by increases in Ontario and Quebec. Still, noted BMO Nesbitt Burns economist Sal Guatieri, the increase of 8,600 is likely a statistical quirk given that "we're coming offf the strongest job growth in 23 years" and there has been a steady decline in Employment Insurance claims recently. Canada has been churning out jobs in recent months, and the unemployment rate has dipped below 8 per cent.
The increase in EI beneficiaries was noted in most provinces by Statistics Canada, though the number fell in Alberta. In Ontario, Statistics Canada said, the number of people receiving regular benefits jumped by 8,200. That's actually the second increase in a row for the province, though the federal statistics gathering agency said that the number has dropped by 65,700 since peaking in June of 2009.
In Quebec, the number of people receiving benefits rose 4,200 in May, having dropped by 23,500 over the previous 10 months.
Small increases were noted in Nova Scotia, British Columbia and Manitoba, with little change elsewhere.
In the United States, initial jobless claims also rose more than expected, up by 37,000 last week. Continuing claim fells, partly because people are exhausting their benefits, Mr. Guatieri said.
Markets shake off Bernanke testimony European and U.S. investors are shaking off their Bernanke Blues. London's FTSE100, Germany's DAX and the Paris CAC-40 are all up today, while Dow Jones industrial average and S&P 500 futures point to a rebound in New York. North American stocks sank yesterday afternoon after the Federal Reserve chairman, in semi-annual testimony to the Senate banking committee in Washington, cited an uncertain outlook for the U.S. economy but dashed the hopes of some investors for new measures to fight a slowing recovery. Mr. Bernanke gives the second part of his testimony this morning at 9:30 a.m. ET.
There's a greater sense of optimism this morning after some strong earnings reports and purchasing managers numbers in the euro zone that show the recovery is still taking hold.
"Better-than-expected European economic data have lifted overseas equity markets," said BMO Nesbitt Burns economist Sal Guatieri. "S&P 500 futures suggest the market could recoup most of yesterday's 1.3-per-cent drop. Treasuries have given back a fraction of yesterday's sharp gains, when fears of a double-dip recession drove 10-year rates down 11 basis points to new 14-month lows of 2.87 per cent (and down nearly one full percentage point from the start of the year) and the 2-year rate to new record lows of 0.56 per cent. The market is starting to price in the possibility of further monetary ease - whether the Fed is willing or not."
- Bernanke says economic outlook uncertain
- Market View: Bernanke's dilemma
- Text of Bernanke's comments
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Markets await Bank of Canada Markets are also waiting for the Bank of Canada to release its Monetary Policy Report at 10:30 a.m. ET, when the central bank and Governor Mark Carney provide more details on their outlook after Tuesday's hike of one-quarter of a percentage point to the benchmark overnight rate. As it boosted the key rate to 0.75 per cent, the central bank also cut its forecast for economic growth, though only slightly, and said developments in Europe, where a debt crisis is playing out, and the United States, where the recovery is fragile, could affect Canada's outlook.
Convenience store war heats up Alimentation Couche-Tard Inc. today upped the ante in its hostile bid for U.S.-based Casey's General Stores Inc., increasing its offer to $36.75 (U.S.) from $36. Casey's, a Midwest convenience store chain, has repeatedly rebuffed its Laval, Que., counterpart.
"Couche-Tard believes its increased offer is even more attractive considering that stock values have fallen since Couche-Tard publicly disclosed its offer," the company said in a statement. "Since April 8, 2010, the S&P 500 Index and S&P Retail Index have declined 10 per cent and 16 per cent, respectively. Couche-Tard believes that absent its offer, Casey's stock would have traded in line with the S&P 500 Index and the S&P Retail Index and therefore its increased $36.75 per share cash offer would represent a premium of 29 per cent and 38 per cent, respectively."
Loblaw profit sinks Loblaw Cos. Ltd. profit slipped almost 7 per cent in the second quarter, though sales rose 1.2 per cent, and it warned of setbacks down the road because of its restructuring. Canada's biggest grocery chain said today it earned $180-million or 64 cents a share, compared to $193-million or 70 cents a year earlier. Revenue rose to $7.3-billion from $7.2-billion.
"We continue to make progress on our overall renewal plan," executive chairman Galen G. Weston said in a statement. "However, we are now in the critical period of heightened risk for the infrastructure and information technology components of the plan. As previously stated, we expect investments associated with this to continue to negatively impact our operating income during this period."
Ford pulls debt issue The financing arm of Ford Motor Co. has scrapped plans for a debt issue, The Wall Street Journal reports today, calling the auto maker's decision the first casualty of a bond market that is uncertain in the wake of the new U.S. financial rules. The company wouldn't comment. But the newspaper quoted sources saying that Ford could not use credit ratings in its documents, which are a legal requirement, because major ratings agencies won't allow their use in bond registration statements. The agencies fear they will be exposed to the new liability in the legislation signed into law yesterday by President Barack Obama.
The offering was backed by auto loans, The Wall Street Journal said. The uncertainty created by the legislation has shut down the market for asset-backed securities, it added. "Issuers have stopped issuing bonds," Paul Jablansky, senior ABS strategist at Royal Bank of Scotland in Stamford, Conn., told the newspaper.
GM in first post-bankruptcy deal General Motors Co. is acquiring a financing company, AmeriCredit, for $3.5-billion, setting up a lending unit for the first time since selling its GMAC business several years ago. It's also the first deal for the auto maker since it emerged from bankruptcy protection last year. "Adding AmeriCredit to our team will improve our competitiveness in auto financing offerings," said chief executive officer Edward Whitacre.
High-end champagne sales on rise Champagne corks are popping again, at least on high-end brands. Both Remy Cointreau and Vranken-Pommery Monopole posted higher sales today, and the outlook is good. "Because of the crisis, consumers temporarily switched to cheaper brands," Vranken-Pommery Chairman Paul-Francois Vranken said, according to Reuters. "This phenomenon is now receding. We're seeing a move back to the major brands and cuvees de prestige."
From today's Report on Business
- Irving empire suffers two losses
- Chanel to quit Sears in dispute over dollar
- The tables turn: Banks woo small firms
- Rising uranium demand still can't outpace supply
- Freed Black enjoying Palm Beach ocean front - for now
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