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. Insight the Market delivers up-to-the-minute insights on developing market news.
Here are our editors’ picks of some of the best reads available to Globe Unlimited subscribers this week.
Stock bubble? What stock bubble?
Strategist Richard Bernstein is one of the best in the business, so when he makes a call you should sit up and listen, says Scott Barlow in Inside the Market. And in a recent report, Mr. Bernstein refutes the notion of an equity bubble in the U.S., saying the current market displays only one of the classic bubble signs – available liquidity. The others – increased leverage, democratization (your barber dispensing hot stock tips), increased turnover, and record new issues – simply aren’t there.
Ontario voters may face stark contrast
In the runup to next election, the leaders of Ontario’s two biggest parties are laying out their economic plans. And while they both share the destination, the chosen routes to getting there couldn’t be more different. Progressive Conservative leader Tim Hudak is pledging corporate tax cuts to attract business and jobs, while Premier Kathleen Wynne believes those goals can best be achieved by revitalizing and expanding the province’s infrastructure. In ROB Insight, David Parkinson parses the merits, and drawbacks, of both approaches.
Plastic’s fantastic for Canada’s banks
Big Canadian banks are boosting their efforts to claim a bigger piece of the increasingly profitable credit card segment. While earnings in some other divisions are in a funk, consumers are using their credit cards as never before for everyday purchases, writes Tim Kiladze in Streetwise, and the transaction fees generated for the banks – often around 2 per cent of a purchase price – are making the business more and more lucrative.
Lululemon valuation is – well – a bit of a stretch
The yoga gear seller has issued a profit warning and said its fourth-quarter results will be below the previous year’s. Even factoring in recent operational woes – which presumably can be rectified – its valuation of 26 times is pretty heady for a stock that has been disappointing investors, writes David Berman in Inside the Market.
Thanks for the bailout. Can we have a subsidy now?
Consumers shop around for the best deal, and auto makers are no different. Chrysler has said it’s keen to invest heavily – industry sources say the total could go north of $2.3-billion – to revamp its Windsor minivan plant, providing Ontario and the feds are willing to cough up a hefty chunk of the cash. And there’s no pressure – other than the fact CEO Sergio Marchionne has said he needs a decision within weeks, and that if the aid is not forthcoming, the company will set up somewhere else. There will be huffing and puffing from both sides, Brian Milner writes in ROB Insight, but the auto sector’s clout ensures that although there may be compromise, ultimately a deal will get done.
A national regulator in all but name
Canada could get a de facto national securities regulator this year, if brokerage ITG Canada’s prediction is right. The push for a single nationwide body is gathering pace, and despite the outright rejection of the scheme by Alberta and Quebec, if enough provinces get on board the refuseniks could find their non-participation would prove a handicap in capital markets, says Boyd Erman in Streetwise.