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Euro crisis rears head Europe's debt crisis returned with a vengeance today to haunt global markets, as bond yields hit record highs and speculation mounted that Portugal will be next in line for a bailout. The European Central Bank also today reportedly went into markets to buy Portuguese bonds.
The euro dipped again, and government borrowing costs in Portugal and Greece climbed again. Costs in Belgium also surged, though there it's a question of a political stalemate as the country continues to run without a day-to-day government. This is a big week for Europe, as Portugal, Spain and Italy prepare for their first bond auctions of the year, looking for at least $43-billion (U.S.).
Reports today suggested that Germany and France are pressing Portugal to formally seek a bailout, in a bid to calm markets, though the European Commission said no talks were being held.
"The talk last week of some form of default mechanism for bank bondholders by the European Commission has further spooked the markets and seen subsequent increases in peripheral bond yields, which continue to highlight the vulnerability of Portugal, Belgium and Spain to further confidence shocks," said CMC Markets analyst Michael Hewson.
"This week we have Spanish, Portuguese and Italian bond auctions and with Portuguese 10-year rates pushing above 7 per cent it would seem inevitable that Portugal may be the next country to ask for a bailout if their funding costs continue to spiral higher. Speculation has already started to that effect with a report in German magazine Der Spiegel at the weekend that Germany and France were putting pressure on Portugal to do just that."
Companies to hire, invest more Canadian companies are slightly less bullish about their sales prospects for the next year, but are confident enough in the recovery that they plan to ramp up hiring and investment, according to a quarterly Bank of Canada survey.
The central bank's Business Outlook Survey for the October-through-December period found firms are less optimistic about their sales prospects over the next 12 months than they were in the last poll, Globe and Mail economics writer Jeremy Torobin reports from Ottawa today.
However, executives continue to "position themselves for growth," the central bank said, by adding workers and continuing to invest in the type of machinery and equipment that policy makers say will be crucial to being able to keep up with competitors in emerging markets.
HudBay strikes deal for Norsemont HudBay Minerals Inc. is acquiring Norsemont Mining Inc. , a deal the Toronto-based miner says will boost its annual copper output by some 145 per cent.
The companies valued the cash-and-stock deal at more than $500-million.
With the deal, HudBay will also take control of the Constancia copper project in Peru, which it says is projected to produce 172 million pounds of copper and 2 million pounds of molybdenum concentrate "at attractive cash costs" over 15 years.
Oil on rise Oil prices climbed today in the wake of the shutdown of a key Alaskan pipeline.
Analysts don't believe the closure, sparked by a leak will be for long. The pipeline accounts for some 15 per cent of U.S. oil output.
Duke to acquire Progress Duke Energy Corp. has struck a deal for Progress Energy Inc. worth $13.7-billion (U.S.), a takeover that would create the biggest utility company in the United States.
The deal by Duke, which already accounts for some four million customers in the Carolinas and other states and, with this deal, would boost that to more than seven million, is the latest in a series in the energy sector as companies grapple with declining prices.
Playboy going private My Internet controls wouldn't allow me on Playboy's website today, but I nonetheless tracked down the company's announcement that it has agreed to a proposal by founder Hugh Hefner to take the company private.
Mr. Hefner's deal for Playboy Enterprises Inc. is worth $6.15 (U.S.) a share.
"With the completion of this transaction, Playboy will come full circle, returning to its roots as a private company," said Mr. Hefner. "The brand resonates today as clearly as at any time in its 57-year history. I believe this agreement will give us the resources and flexibility to return Playboy to its unique position and to further expand our business around the world."
Today's deal tops an earlier offer by Mr. Hefner of $5.50 a share, and values the company, whose flagship magazine has been losing both readers and advertising, at more than $200-million.
Mr. Hefner, who launched the magazine in 1953, owns about 70 per cent of the class A common shares of the company, and 28 per cent of its class B stock. Mr. Hefner's Icon Acquisition Holdings LP will buy the remaining shares, along with Rizvi Traverse Management.
Brazil sees trade war Brazil, which got some tongues wagging last year when it said the world was in a currency war, now is warning against an all-out trade war.
The country's finance minister, Guido Mantega, also told the Financial Times in an interview that Brazil is planning even more measures to halt the appreciation of its real. He cited the United States and China for currency manipulation.
"This is a currency war that is turning into a trade war," he told the newspaper, adding that currency manipulation will be on the Group of 20's agenda this year.
As Scotia Capital economists Derek Holt and Gorica Djeric noted today, Mr. Mantega has "a penchant for getting headlines."
"Brazil and others are stuck in a bind over currency strength, but instead of threatening trade wars in 1930s fashion, what would be more helpful is a constructive approach to furthering domestic supply side reforms in order to more openly ensure that capital flows go toward constructive uses," they said.
"The global history of using measures to restrict cross-border capital flows casts strong doubt against policy success in this regard. It seems to us that Brazil is at least as guilty as anyone else when it comes to manipulating its exchange rate against market forces."
Earnings season kicks off Fourth-quarter earnings season begins today when Alcoa Inc. reports results after markets close.
A handful of major U.S. companies, including Intel and JPMorgan Chase, also report this week.
Boyd Erman's Morning Meeting Bonus season is going to get a lot less fun if Credit Suisse has anything to do with it, Streetwise columnist Boyd Erman reports today.
Cash bonuses are about to get smaller for those in the banking industry as pressure from regulators and politicians grows, with Credit Suisse now introducing much higher deferral levels for its employees.
In Your Business today
Laura Jones, vice-president for Western Canada at the Canadian Federation of Independent Business, is spearheading the organziation's effort to bring attention to the problems created by excessive government regulations and bureaucratic processes, and to push for change. Red Tape Awareness Week starts today.
At a time when a growing number of employees, particularly younger people, are seeking jobs that offer more than just a pay cheque, columnist Mark Evans argues that fun should receive more love and attention.
Learn from the failures of others, and avoid these five blunders made by businesses from every niche.
In Personal Finance today
Ottawa allows unused grants and bonds to be carried forward, and registered savings plans to be rolled over into RDSPs.
Fake credit card company agents call victims asking for three-digit security number on the back of their MasterCard or Visa.
Canadians urge early financial literacy in classrooms.
From today's Report on Business