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Canada's economy sputters Canada's economy stalled out in April, ending seven consecutive months of growth and getting the second quarter off to an exceptionally slow start. A hefty drop in retail trade and a smaller drop in manufacturing left gross domestic product unchanged, Statistics Canada said this morning. The main drag on retailing activity was a slowdown among new car dealers, while manufacturing output dipped for the first time since August 2009.
"Despite the significant slowdown in economic activity in April, we expect the recovery in Canada to remain on track," said Toronto-Dominion Bank economist Dina Cover. "However, there will be several bumps along the way and the pace of growth going forward will not likely repeat the robust performance seen over the past two quarters."
Jonathan Basile, vice-president of economics at Credit Suisse in New York, said the weaker-than-expected showing increases the chances that the Bank of Canada, which raised its benchmark overnight rate to 0.5 per cent in early June, may sit tight at its next policy meeting in late July. Read the story
Markets begin to steady Global markets steadied today, with European stocks helped by indications that Europe's banks may not be under as much pressure as feared. The European Central Bank said today that banks in the euro zone, made up of the 16 countries that share the common currency, sought €131.9-billion in three-month loans, much less than expected, in the runup to the expiry tomorrow of an existing lending scheme. More than 1,000 banks have to repay €442-billion in one-year loans from the ECB, and today's announcement from the central bank suggested to investors that the situation isn't as bad as they had believed.
"The final session of the second quarter looks set to finish with a whimper rather than a bang," said Anthony Grech, head of research at IG Index. "And it has certainly been a tricky period for equities, with indices on both sides of the Atlantic at multiple-month lows. Investors will be hoping that markets can shake off the fears surrounding recovery prospects, with the key area of debate still the differing strategies of the U.S. and Europe in balancing economic recovery and a tightening of the government purse strings.
Related: Banks borrow €131.9-billion from ECB
Billabong to acquire West 49 Billabong International Ltd., the Australian company steeped in the surfing culture, has struck a $90.2-million deal to acquire Canada's West 49 Inc. The companies announced today that Billabong will pay $1.30 a share cash for West 49, a specialty retailer that targets the 12-16 age group through 138 stores across the country, primarily in shopping malls. "Billabong will strengthen the company's future growth prospects and provide new business opportunities," Lucio Di Clemente, chairman of West 49's special committee that is recommending the deal, said in a statement.
"It is a positive outcome that one of the two leading international board culture apparel brands (Billabong and Quiksilver) has agreed to acquire West 49, the leading board culture apparel retailer in Canada with revenues in excess of $200-million," said analyst Keith Howlett of Desjardins. Read the story
Shaw tops profit estimates Shaw Communications Inc. today beat analysts' esimates on third-quarter profit but fell shy on the revenue side. Shaw earned $158-million or 37 cents a share, up from $132-million or 31 cents a year earlier. Revenue climbed to $944-million from $861-million.
"Overall, Shaw remains our favourite buy in the large cap telecom space," said Desjardins analyst Maher Yagni. "The company should continue to exhibit decent growth trends in cable in the near to medium term as its potential customer base is less penetrated versus other cablecos in Canada; in the long term, its growth profile remains promising given its plans to enter the wireless market in 2011. Finally, its recently announced acquisition of CanWest's television assets is an opportunistic investment that could see material upside as the economy continues to recover." Read the story
Goldman in spotlight The number two man at Goldman Sachs Group Inc. , Gary Cohn, faces the Financial Crisis Inquiry Commission today, and is expected to be grilled on the Wall Street giant's exposure to American International Group Inc. Also expected to testify today is Joseph Cassano, the former chief of the key AIG operation at the centre of the insurer's troubles. It will be, The Wall Street Journal notes, Mr. Cassano's first public comments in more than two years.
Old Spice man trades horse for wheels The Old Spice man - ex-NFL player Isaiah Mustafa in his role as pitchman for the men's product line from Procter & Gamble Co. - still isn't wearing a shirt but he's switched his horse for a motorcycle. A new ad is set to debut today with the "Hello, Ladies" opening line and Mr. Mustafa moving from a beach to a kitchen, then to a hot tub and a motorbike, The Associated Press reports.
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Companies & investments Mentioned In This Article (4)
SJR.B-T 23.3 0.16
0.691% 523,587 Goldman Sachs
GS-N 158.18 3.71
2.402% 4.178M Procter & Gamble
PG-N 80.02 -0.18