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Madison Square Gardens stock sinks Shares ofMadison Square Garden Inc. sank today amid reports that NBA star LeBron James would probably announce tonight that he chose the Miami Heat as his new team rather than the New York Knicks, which is exactly what happened. Madison Square Garden owns the Knicks, and there had been hopes that Mr. James would announce he was leaving the Cleveland Cavaliers for New York. He unveiled his choice on ESPN, which reported earlier today that the Most Valuable Player for the past two years was likely headed to Miami. Yesterday, the stock ran up, boosting the company's market value by almost $100-million (U.S.).
"Madison Square's action has been the ultimate in event-related trading," Michael Block, chief equities strategist at Phoenix Partners Group LP in New York, told Bloomberg News. "I'm not sure anyone thinks he's going anywhere but Miami right now."
Germany shows strength Europe's biggest economy is picking up steam and, on a brighter note for G20 leaders, taking "a step in the right direction" in the area of global imbalances. Industrial production in Germany rose 2.6 per cent in May while its exports soared more than 9 per cent, fresh signs of a rebound driven by industry. What may be more notable - at least from the perspective of other countries that are watching Germany closely - the country's trade surplus narrowed markedly in May to €9.7-billion from €13.1-billion. That was due to a surge in imports of 14.8 per cent, good news for other countries as demand grows. Correcting global imbalances was a key theme at the recent G20 summit in Toronto and, while it's just a one-month measure, it is a step in the right direction, said BMO Nesbitt Burns economist Benjamin Reitzes.
"Improved demand out of Germany is something global leaders have been pleading for, to help rebalance the global economy and boost global growth," Mr. Reitzes said.
China's current account surplus to shrink China says its current account surplus will shrink for a second consecutive year this year as domestic demand grows. The State Administration of Foreign Exchange, or SAFE, said the current account surplus fell last year to 6.1 per cent of gross domestic product from 9.6 per cent a year earlier. The current account is the broadest measure of trade.
"The momentum for the trade surplus to widen will moderate," it said. "The current-account surplus as a percentage of GDP will decline further."
Trichet talks up Europe Whether talking about the economy or the World Cup, European Central Bank chief Jean-Claude Trichet had the same message today: Don't underestimate Europe.
After holding the ECB's benchmark interest rate steady, Mr. Trichet told reporters that Europe's economy, a focus among investors given the fears over mounting debt troubles, is stronger than some believe. He said there is a tendency outside Europe to be "excessively pessimistic" about the continent but that the numbers don't bear that out.
As for soccer, Mr. Trichet cited the success of teams from the euro zone, the countries that share the common currency, saying that "in the best four you have three European teams ... I have said from time to time that one should not underestimate Europe."
European rates unchanged Both the ECB and the Bank of England held their benchmark lending rates steady today. That was expected but markets were more interested in what Mr. Trichet had to say about bank stress tests. The stress tests, the results of which will be released July 23, are a big issue across Europe.
"There is a lot of apprehension in the market over what may be potentially revealed by the stress tests, and there are some already voicing criticism that these tests may not be putative enough," said Scotia Capital currency strategist Sacha Tihanyi. "We hold the view that transparency is preferred to opacity, and while there is risk that banks are shown to be sitting on unstable capital bases, European policy makers can manage the risks by suggesting financial support for vulnerable cases (as they have in recent days)."