Every day ROB Insight delivers exclusive analysis on breaking business news and market-moving events. Streetwise offers news and analysis on Bay Street and the world of finance. Inside the Market delivers up-to-the-minute insights on market news as it develops.
Here are our editors’ picks of some of the best reads available to Globe Unlimited subscribers this week.
Fewer jobs, lower pay
The moribund Canadian jobs market is hardly news, with Statistics Canada’s Survey on Employment, Payrolls and Hours (SEPH) reporting this week that non-farm payrolls shrunk in February after a smaller decline the month before. But along with the slowdown in job creation has come perhaps a bigger concern, writes David Parkinson in ROB Insight: An erosion in the quality of jobs being created. A Capital Economics report this week notes that job gains have been concentrated in lower-paying – sometimes much lower paying – sectors. Not only does this mean tougher times for many households, it also suggests that the wider economy will feel the knock-on effects on consumer spending.
Frack that shale, and hold the water
After shaking up the board at Calgary-based Gasfrac Energy Services, Julien Balkany of New York-based Nanes Balkany Partners is pushing for the company to look to foreign markets to export its unique waterless fracking technology, writes Jeffrey Jones in Streetwise. The process of extracting gas and oil from within shale formations requires vast quantities of water (it is, after all, known officially as “hydraulic fracturing”), and so is not practical in parts of the world with drier climes. Gasfrac’s process instead uses propane, and Mr. Balkany says that opens up a huge potential market in countries such as Saudi Arabia, Algeria, Libya, Mexico and China.
Tripping up in the yield chase
With the miserable returns currently on offer from investment-grade bonds, and stocks at heady valuations, many investors have stuck their necks out to plump up their returns by turning to high-yield bonds. The greatest danger is, of course, default, but the relatively low default rate of 1.7 per cent that Barron’s says currently exists may be giving investors a false sense of security. With borrowing rates so low, some bond issuers with less-than-healthy businesses have been able to get by with this cheaper money, but once rates start heading upward, the story is likely to change. In Inside the Market, Rob Carrick looks at why relatively pricey stocks could be a better – and safer – investment.
The rise and stall of working women
The proportion of women in paid employment has risen dramatically in recent decades, first surpassing the 50-per-cent mark in the early 1970s and steadily rising over the intervening years to 82.5 per cent in 2013. Over the same period the labour force participation rate for men has dropped about four percentage points to 90.7 per cent. So can we expect to see parity achieved in the coming years? There are several factors working against that, writes Andrew Jackson in ROB Insight. Women step back from the work place far more often than men to take parental leave or to shoulder the burden of caring for elderly relatives, and policy makers would be well advised to take note that where there is more support offered to raise a family, women constitute a greater component of the work force.
Clash of the gold titans
When a deal to merge gold mining giants Barrick Gold and Newmont Mining was first mooted, it received a thumbs-up from most investors for the possible savings that could be wrung out of the synergies. And yet it was no sooner announced the two were in talks that a trickle of bad news begin to leak. Both sides accused each other of negotiating in bad faith, with Newmont pointing to new Barrick co-chairman John Thornton in particular. The former Goldman Sachs banker – who took the reins from Peter Munk, who officially stepped down this week – had been hailed as a man who knew how to get deals done. Now with the talks dead, plenty of mud has been slung by both sides, but it is Mr. Thornton, explains Boyd Erman in Streetwise, who will be wearing most of it.