Stories Report on Business is following today :
Canadian dollar tops 99 cents
The Canadian dollar is back in the running for parity with its U.S. counterpart, topping 99 cents U.S. again this morning after a few down days. "Parity can happen at any time and we certainly expect it to be achieved within three months," Scotia Capital currency strategist Sacha Tihanyi told Bloomberg News. "There's just so much positive economic data coming out of Canada that there hasn't been anything to shake that sentiment."
Manufacturing continues to pick up
The global manufacturing sector is showing signs of a strong recovery, observers say. Readings from the sector in the United States, Europe and Asia today showed a sharp pickup in production, buoying global markets. Across Europe, the weaker euro appears to be boosting exports, based on March data, while production in Britain alone grew at its best rate in more than 15 years. The major European economies such as Germany and France also saw marked activity, and China's manufacturing sector remained strong. The various readings "painted a portrait of on ongoing 'V' shaped global manufacturing recovery," Scotia Capital said. Added Fortis Bank economist Nick Kounis in an interview with Reuters: "We are seeing world trade booming, it's recovering very sharply. Emerging markets were driving this at the beginning but developed markets are also now catching up."
In the U.S., the Institute for Supply Management's widely-watched manufacturing index rose to 59.6 from 56.5, better than economists expected and marking the eighth straight month of a reading well above the 50 level, which separates expansion from contraction. "It is worth noting that the level of the index now sits at the highest level since mid-2004," said TD Securities portfolio strategist Ian Pollick. "... Of course, part of the large increase is a function of the low levels reached during the credit crunch, and the clawing back of lost ground."
BMO boosts economic forecast
Some economists are revising their economic forecasts again after yesterday's reading that showed Canada's economy expanded in January at its fastest pace in three years, at 0.6 per cent, according to Statistics Canada. BMO Nesbitt Burns said today it now projects growth in the first quarter, which ended yesterday, of 5.5 per cent on an annualized basis, a revision from its earlier call of 4.7 per cent. That would bump its 2010 forecast to 3.4 per cent from an earlier projection of 3.2 per cent. "The seemingly unending slew of stronger-than-expected Canadian economic data, highlighted by the 0.6-per-cent surge in January GDP, has prompted us to (yet again) revise our forecast higher," deputy chief economist Douglas Porter said. "... The rapidity at which we are beginning to lift our forecast brings flashbacks of the speed with which we had to chop our 2009 forecast in late 2008, and early last year."
David Rosenberg, the chief economist at Gluskin Sheff + Associates, said first-quarter growth could come in between 5.5 per cent and 6 per cent.
Confidence in Japan rises
Companies in Japan are also seeing better times, according to a key survey of business confidence that indicates they are beginning to see the fruits of a rebound in exports. The quarter tankan survey released by the Bank of Japan today shows confidence rose 11 points, marking the fourth consecutive increase. "There has been this concern that exports go up and nothing else happens," Macquarie Capital Securities economist Richard Jerram told The Associated Press. "We've been arguing that you should get second-round effects ... and that certainly seems to be coming through quite well."
Bombardier profit sinks
Bombardier Inc. posted a sharp drop in fourth-quarter profit to $179-million (U.S.) or 10 cents a share from $312-million or 17 cents a year earlier, results the company described as "good" given the troubled economic backdrop. The bottom line in this morning's results is that the rail market remained "resilient" while the aerospace market suffered. Revenue fell to $5.35-billion. Said chief executive officer Pierre Beaudoin: "In aerospace, we took the necessary steps to adapt to the economic reality by carefully monitoring capital expenditures and reducing our production rates for both business and region jets. We met our target deliveries and increased our market share in both segments ... The rail market remained resilient. Bombardier Transportation increased both revenues and profitability." Read the story
Analysts mixed on RIM
The initial reaction among investors after Research In Motion Ltd. reported quarterly results late yesterday was to sell, but it may be a brighter story. RIM posted a 37-per-cent jump in fourth-quarter profit to $710-million (U.S.) or $1.27 a share from $518.3-million or 90 cents a year earlier. Revenue, too, jumped 35 per cent to $4.08-billion, falling shy of estimates. Its projections calmed investors somewhat but the big concern appeared to be that while it is making headway abroad, its North American foothold is slipping. Goldman Sachs Group Inc., for example, cut RIM stock to a "sell" from a "neutral." But others were more upbeat. UBS Securities raised its price target, as did Raymond James, while Canaccord Adams kept it steady but still said it was impressed.
|CAD/USD-I Canadian Dollar/U.S. Dollar||0.943||
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|BBD.B-T Bombardier Inc.||4.63||
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