These are stories Report on Business is following Thursday, April 24, 2014.
EDC sees better times
Canada’s export credit agency is rather bullish on the future, predicting today that the world is “on the verge of a rush of economic growth.”
In a new forecast, Export Development Canada says the U.S. economy should expand by 3 per cent this year and by just shy of 4 per cent in 2015.
Canada’s economy, it projects, will grow by 2.2 per cent in 2014 and 2.7 per cent next year.
Notable is its forecast for Canadian exports, which calls for an increase of 2.5 per cent this year and a surge of 5.8 per cent in 2015.
The drop in the Canadian dollar, it adds, which will help juice the export market, could add up to half a percentage point to economic growth this year.
“It’s easy to forget that consumers and corporations have been living off the excesses of the past cycle since the 2009 crash,” said Peter Hall, the chief economist at EDC, the agency responsible for helping to finance and insure exports.
“That surplus is now gone, and both industry and consumers are having to open up their wallets in a big way.”
On the global front, Mr. Hall forecasts growth of 3.7 per cent this year and 4.3 per cent in 2015.
The forecast is not entirely rosy, however.
“For companies focused on the domestic market, 2014 is likely to be a tough year,” Mr. Hall said.
“However, it’s not all bad news for the Canadian economy, with a number of key indicators suggesting the outlook may not be so bleak.”
Globally, as well, it will be “no cakewalk” almost six years after the world melted down.
“The world economy’s greatest near-term challenge is the unwinding of extraordinary money policy,” Mr. Hall said.
“The historical debut of quantitative easing is in the final act, but there’s not much of a script to go by,” he added, referring to the Federal Reserve’s pullback on its bond-buying stimulus program known as QE.
Mr. Hall’s projections for next year are more optimistic than those of some others, including the Bank of Canada, which forecasts U.S. economic growth of just 3.2 per cent and Canadian expansion of 2.5 per cent.
The International Monetary Fund, meanwhile, projects the U.S. economy will expand by just 3 per cent in 2015.
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McCaughey unveils retirement plan
Gerry McCaughey says he'll retire as Canadian Imperial Bank of Commerce’s chief executive officer in two years.
Mr. McCaughey, who was named CEO in 2005, will leave the bank in April 2016, The Globe and Mail's Tim Kiladze reports.
A successor for Mr. McCaughey has not been named, a rare move for Canadian banks. When the CEOs of Royal Bank of Canada, Toronto-Dominion Bank and Bank of Nova Scotia all announced plans to retire in the past 18 months, their successors were named at the same time.
Mr. McCaughey’s announcement comes a month after Richard Nesbitt, the bank’s chief operating officer, also said he would retire, effective 2015. With Mr. Nesbit out of the picture, the leading candidates to take the CEO seat are David Williamson, the bank’s head of Canadian personal and commercial banking, and Victor Dodig, who runs wealth management.
Potash beats estimates
Shares of Potash Corp. of Saskatchewan rose today after its first-quarter results topped the estimates of analysts and the agribusiness giant signalled better times ahead.
“After an especially challenging environment in the second half of 2013, greater demand and stability emerged early in the year,” said chief executive officer Bill Doyle.
“We saw strong customer engagement ahead of the spring planting season, particularly in potash. Despite weather-related issues that impacted our results, especially in phosphate, we were able to deliver earnings above our quarterly guidance range.”
The company earned $340-million (U.S.), or 40 cents a share, in the first three months of the year, compared to $556-million or 63 cents a year earlier.
Potash also projected second-quarter earnings per share of between 40 cents and 45 cents, and full-year results at $1.50 to $1.80.
General Motors Co. shares dipped as the auto maker beat expectations, though first-quarter profit plunged.
GM profit slumped to $108-million (U.S.), or 6 cents a share, from $873-million or 58 cents as the company took a $1.3-billion, recall-related hit, as well as being stung by currency fluctuations in Venezuela.
“The performance of our core operations was very strong this quarter, reflecting the positive response of customers to the new vehicles we are bringing to market,” said chief executive officer Mary Barra.
Earnings flood in
Other results also flooded in today, following on the heels of the strong reports late yesterday from Apple Inc. and Facebook Inc.
“A good earnings season is just what the doctor ordered following a few depressing months for the markets,” said Alpari’s Mr. Erlam.
“The ongoing crisis in Ukraine, the reduction in monetary stimulus from the Fed and the poor economic data in the first quarter have left investors feeling fairly downbeat,” he added.
“The recent sell-off in tech and Internet stocks was just the icing on the cake, acting as a warning sign that these massive valuations will no longer be tolerated. It couldn’t have come at a better time as well, with economic data expected to improve in the US following the end of the unusually poor winter weather. We could be looking at a very good second quarter for the markets, as long as we don’t get another flare up in Ukraine, which is far from unlikely."
- Microsoft third-quarter earnings decline, but still top Street
- Amazon profit jumps 32 per cent
- Caterpillar beats the Street, raises outlook
- UPS profit hurt by severe winter
- Jacqueline Nelson: Apple woos investors with stock split, buyback as sales surge
- Susan Krashinsky: Mobile ads buoy Facebook's bottom line
- Domtar misses forecasts as one-time items hit bottom line
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