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Briefing highlights

  • Holding more than one job
  • Stocks, Canadian dollar, oil at a glance
  • Encana to move to U.S., change name
  • BCE beats estimates
  • Bombardier to sell unit, posts loss
  • Economy grows 0.1 per cent
  • Fiat Chrysler, PSA strike merger deal
  • SNC-Lavalin names new chief
  • Honk Kong sinks into recession
  • Thomson Reuters beats estimates
  • Shell warns on buyback
  • What analysts are saying today
  • Required Reading

Take these jobs and ...

More than one million Canadians are holding down more than one job, and paying for it in the number of hours they’re working.

They account for 5.7 per cent of the work force, Statistics Canada said in a recent study, up from 5 per cent in 1998 and just 2.4 per cent in 1978. That latest number is the highest on records kept since 1978, noted Bank of Montreal senior economist Sal Guatieri.

“People who are in part-time employment (particularly if it is involuntary) are more likely to hold multiple jobs, although the majority of multiple job holders work full-time in their main job,” Statistics Canada analyst Meghan Fulford and senior analyst Martha Patterson said in their study.

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“This means that multiple job holders work more hours per week than single job holders, on average. Lower weekly earnings are also associated with a higher likelihood of holding multiple jobs.”

Some highlights of the study:

  • Almost 66 per cent of those holding multiple jobs are employed full-time in a main position.
  • Those with more than one job work an average 10 hours a week longer than their counterparts with just one position. Their main job took up an average 32.1 hours, with their secondary position accounting for 13.9 hours. Compare that to the 36.1 hours of a person with just one job.
  • “Over the past 20 years, the incidence of multiple job holding has consistently been higher among women compared to men, and has also increased more among women.” Indeed, 6.8 per cent of women with jobs held more than one in 2018, for an increase of 1.2 percentage points from 20 years earlier.

Source: Statistics Canada

  • “Multiple job holding varies across the 15 major industrial sectors …. In both 1998 and 2018, workers whose main job was in health care and social assistance had the highest multiple job holding rate (8.2 per cent in 1998; 8.7 per cent in 2018). Just over one-quarter of the rise in multiple job holding among women between 1998 and 2018 can be attributed to increased employment in this sector.”
  • “People engage in multiple job holding for various reasons, such as out of financial necessity, to ensure continuous employment, or to accumulate skills and expertise in other occupations. Although multiple job holding can provide some benefits, it is also associated with an increased risk of injury, both at work and not at work. Multiple job holding may also be a partial indicator of the extent to which changes in the economy – including the ‘gig’ economy – have contributed to the prevalence of non-standard or precarious work.”
  • More than 8 per cent of employees in temporary positions held more than one job in 2018. Compare that to the 5 per cent of those with a permanent primary position.
  • Similarly, those for whom part-time work is a primary position are “more likely” to hold down more than one job. And “involuntary part-time workers were even more likely to hold multiple jobs (14.6 per cent).”
  • “Among paid employees, the likelihood of holding multiple jobs declines as the main job earnings increase.”
  • Young people between the ages of 20 and 24 account for the “highest rate” of holding more than one job, at 7.6 per cent compared to 6.5 per cent for the 25-29 age group and 4.7 per cent among those 55 and up.
  • Self-employed Canadians are “more likely” to be working more than one job.

Source: Bank of Montreal

“The rate of multiple job holding is also higher in Canada than in the U.S. (5 per cent, actually slipping this century),” said BMO’s Mr. Guatieri.

“This partly reflects more part-time workers in Canada (18.7 per cent of total versus 16.7 per cent in the U.S. in 2018) and perhaps more affordable daycare.”

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Markets at a glance

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Encana to move to U.S.

Encana is ditching Canada in more ways than one.

The energy giant said this morning it’s moving to the U.S. early next year and changing its name to Ovintiv Inc.

The move to the U.S. will need the approval of the company’s shareholders, the stock exchange and the court.

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“A domicile in the United States will expose our company to increasingly larger pools of investment in U.S. index funds and passively managed accounts, as well as better align us with our U.S. peers,” chief executive Doug Suttles said in a statement announcing the move.

“The change in corporate domicile will not change how we run our day-to-day activities. However, our actions show that we will leave no stone unturned to capture the value we deeply believe exists within our equity.”

Encana also posted a stronger third-quarter profit of $149-million, or 11 cents a share.

“Encana expects to continue generating significant free cash flow in the fourth quarter of 2019,” the company added.

“Strong production results year to date have more than offset the impact of disposition volumes and Encana has increased annual production guidance, lowered cost guidance, and maintained mid-point of original capital guidance,” it added.

“Cost performance has been strong and Encana is now guiding to the bottom end of the previous $12.75 – $13.25 per [barrel of oil equivalent] range.”

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Bombardier sells plants, posts loss

Bombardier Inc. struck a deal to sell its aerostructures business, while sinking to a third-quarter loss but boasting of its progress.

Bombardier is selling the aerostructures unit to Spirit AeroSystems Holding Inc., which means operations in Belfast, Casablanca and Dallas, for US$500-million in cash and the assumption of liabilities.

The Montreal-based plane and train maker also posted a quarterly loss of US$91-million, or 6 cents a share, diluted, compared to a profit of US$149-million or 4 cents a year earlier.

Revenue rose to US$3.7-billion.

“We continue to make progress driving our turnaround,” chief executive officer Alain Bellemare, said in a statement releasing the results.

“We are making steady progress working through our legacy projects, giving us confidence in our ability to deliver stronger financial performance,” he added.

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Economy grows 0.1 per cent

Canada’s economy eked out modest growth of 0.1 per cent in August.

But, hey, that’s better than in July, when it flatlined.

Notable in today’s report from Statistics Canada was the fact that output among goods-producing industries rose 0.2 per cent, having slumped for two months, largely on the back of a better showing of 0.5 per cent in manufacturing.

Also notable was the 0.3-per-cent gain in construction, which marked its third increase in four months, with residential building up 0.6 per cent.

Oil sands extraction slumped 3.6 per cent, declining for the fourth month in a row, partly because of maintenance, Statistics Canada said.

If you strip out the oil sands, crude and gas extraction rose 0.3 per cent “as growth in natural gas extraction more than offset lower crude petroleum extraction, resulting in part from continued production disruptions at some offshore facilities in Newfoundland and Labrador.”

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The August softness “could be blamed on a fall in wholesaling, and disruption in energy output on the east coast (as well as softer oil sands output), and manufacturing was a winner this month but will see the impact of the GM strike ahead, and is only flat from a year ago,” said CIBC World Markets chief economist Avery Shenfeld.

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Fiat Chrysler, PSA to merge

Fiat Chrysler and Groupe PSA have struck a deal to merge and create what they say will be the world’s fourth-larges auto manufacturer.

Each group of shareholders will hold 50 per cent of the company, whose combined revenues would be almost EURO 170-billion a year, with “recurring operating profit” of more than EURO 11-billion.

The new company will boast brands that include Peugeot, Vauxhall, Fiat, Dodge, Chrysler and Maserati, among others.

“The deal is certainly welcome news for Fiat, whose shares have been in slow decline since the start of 2018, in contrast to Peugeot, whose shares have gone from strength to strength since the last of two bailouts in 2014,” said CMC Markets chief analyst Michael Hewson.

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SNC-Lavalin names new chief

SNC-Lavalin Group Inc. has given Ian Edwards the permanent job of chief executive officer.

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Acting as interim CEO since early June, Mr. Edwards will now guide the engineering and construction giant through still uncertain times.

“Mr. Edwards has actively consulted with investors representing the majority of SNC-Lavalin’s shareholder base, and undertaken a comprehensive strategic review of the business, which resulted in the July 22, 2019, decision to exit lump-sum turnkey contracting,” the company said, noting, too, SNC was reorganized into two divisions.

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Ticker

Hong Kong in recession

From Reuters: Hong Kong slid into recession for the first time in a decade in the third quarter, weighed down by increasingly violent anti-government protests and the protracted U.S.-China trade war. The economy shrank 3.2 per cent in July-September from the preceding period, contracting for a second straight quarter and meeting the technical definition of a recession, according to preliminary government data.

Thomson Reuters beats estimates

From Reuters: Thomson Reuters Corp., parent of the Reuters News agency, reported higher-than-expected quarterly operating profit on Thursday and affirmed its 2019 and 2020 estimates. Operating profit rose to US$262-million, or 27 US cents a share, from US$173-million or 12 US cents a share a year ago, reflecting the revaluation of warrants the company holds in Refinitiv, which the London Stock Exchange has agreed to buy.

Shell warns on buyback

From Reuters: Royal Dutch Shell warned uncertain economic conditions could slow its US$25-billion share buyback program, the world’s largest, after its third-quarter profits easily beat expectations on strong oil and gas trading. The better-than-expected results in the face of oil prices that fell 17 per cent year on year underscores Shell’s transformation in recent years, with deep cost cuts and a focus on returns after the 2014 industry downturn. Net income attributable to shareholders, based on a current cost of supplies and excluding identified items, fell 15 per cent to US$4.8-billion from a year earlier.

Lloyds misses estimates

From Reuters: Britain’s biggest mortgage lender Lloyds Banking Group, posted weaker-than-expected third quarter pre-tax profits after making a further POUND 1.8-billion for mis-sold loan insurance payouts. The bank posted pre-tax profits of POUND 50-million for the three months to end-September.

BoJ holds steady

From Reuters: The Bank of Japan kept monetary policy steady, as expected, but offered a stronger signal it may cut interest rates in future, underscoring its concern that overseas risks could derail the country’s fragile economic recovery.

Zimbabwe’s economy to contract

From Reuters: Zimbabwe’s economy is set to contract by 6.5 per cent this year after a drought and power shortages, the finance minister said, adding power generation could be cut at the largest hydro plant due to low water levels. Mthuli Ncube said Zimbabwe would spend more than US$300-million to import 840,000 tonnes of maize, a staple crop, after the drought left more than half the population in need of food aid.

Switch buoys Nintendo

From Reuters: Nintendo Co.’s second-quarter operating profit more than doubled, blowing past analyst estimates, on strong demand for its Switch console. Nintendo’s operating profit for the July-September quarter was YEN 66.8-billion versus YEN 30.9-billion yen a year earlier

Also ...

What analysts are saying today

“Fiat Chrysler and Peugeot this morning confirmed their plans to merge in a 50/50 merger of equals, suggesting that any concerns the French government may have had have been allayed. The lack of pushback by the French government may be down to assurances on job losses, which could well be bad news for car plants, outside of France and Italy, with the U.K. an obvious target. Any deal will still need to be scrutinized by regulators, but there remains little in the way of overlap outside of markets in Europe.” Michael Hewson, chief analyst, CMC Markets

“In the corporate world, goods news continued flowing in. Facebook and Apple made their investors proud. Both companies beat the strong market expectations as they released their third-quarter earnings after the market close. The gloomy economic conjuncture has not been a concern for them. Facebook, moreover, is expected to benefit from increased ad revenues from end November onwards, as Twitter banned political ads on its platform heading into the 2020 presidential election year in the U.S.” Ipek Ozkardeskaya, senior market analysts, London Capital Group

“Gold is rallying on expectations the U.S.-China trade war will not be ending anytime soon. Chinese officials have voiced skepticism that a broader deal will prove to be very difficult to reach due to the unpredictability of President Trump. China basically said what everyone was already thinking, that this trade war will likely drag beyond the 2020 U.S. presidential election and this big macro risk will keep gold supported.” Edward Moya, senior market analyst, Oanda

Required Reading

Molson pushes beyond beer

Molson Coors Brewing Co. is speeding up efforts to be less of a beer company, Nicolas Van Praet writes. The maker of Molson Canadian and Coors Light announced it is moving forward with a “revitalization plan” in which it will cut 400 to 500 white-collar jobs and regroup its commercial headquarters for North America in Chicago. It will also change its name to Molson Coors Beverage Co. to better reflect its strategic push to expand beyond beer into other offerings.

Auditor issues scathing report

Ontario’s Auditor-General has issued a scathing report on the inner workings of the province’s home-building industry regulator, Tarion Warranty Corp., urging changes that target everything from high-priced salaries, too-cozy relationships with home builders and confusing rules that allowed it to reject thousands of legitimate claims from homeowners. Shane Dingman reports.

Having your back

Do dividend stocks have your back in a bear market? Personal finance columnist Rob Carrick examines the issue.

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