Every day ROB Insight delivers exclusive analysis on breaking business news and market-moving events. Streetwise offers news and analysis on Bay Street and the world of finance. Insight the Market delivers up-to-the-minute insights on developing market news.
Here are our editors' picks of some of the best reads available to Globe Unlimited subscribers this week.
Turbulence in the cheap seats
The glory days of the discount airline may be coming to a close, writes Carl Mortished in ROB Insight. Ryanair, the sector's poster child and Europe's biggest airline, has issued two profit warnings in as many months, prompting the take-it-or-leave-it carrier to rethink its approach to customer service. But that may not be enough to win a return to the higher load factors and yields it has enjoyed in the past, as its target demographic suffers a sustained decline in spending power on the back of stagnant wages, high unemployment and rising household costs.
Big Canadian banks tighten their belts
Despite record profits, Canadian financial institutions are reining in costs in the face of slowing loan growth and a murkier outlook for the year ahead, writes Tim Kiladze in Streetwise. HSBC is the latest bank to outline such plans to increase "efficiencies," following in the footsteps of TD and Scotiabank. BMO has a head start, having booked $255-million in restructuring costs over the past two years.
Canadian oil stocks march to different drummer
In less than a month, Canadian oil prices have plummeted 25 per cent, so one might expect oil stocks to have also tumbled precipitously. But that's not the case, with the TSX oil producers index down a mere 2 per cent. What gives? A close look at the movements of the two over the past 24 months shows very little correlation: the real driver of Canadian oil stocks is the price of U.S. crude, explains Scott Barlow in Inside the Market.
Scouring globe for growth a fool's errand
Investors thinking of pulling out of the U.S. to search for greener pastures will be sorely disappointed, writes Brian Milner in ROB Insight. Growth of 1.6 per cent expected this year is projected to rise to 2.6 per cent next year – hardly cause for celebration, and the prognosticators are even gloomier about Europe, calling for a pitiful 1.1-per-cent expansion after a contraction in 2013. But investors turning to emerging markets for deliverance will find no relief there, either, with analysts offering only tentative forecasts and warning they could be easily derailed by a tide of hot money flooding in.
Has BlackBerry been tossed a lifeline?
Don't write the obituaries for BlackBerry just yet, writes Boyd Erman in Streetwise. The capital infusion the company secured earlier this week actually puts them in a stronger position than the aborted buyout would have. An LBO would have left it with a heavy debt load and burdened by higher interest servicing costs. Instead, the company retains all its patents, remains independent, and is flush with cash with a relatively clean balance sheet, allowing much more manoeuvre room for a turnaround.
A better way to invest in indexed funds
Ordinary indexed funds invest based on market capitalization, but recent research suggests so-called fundamental indexing can produce much higher returns, writes David Berman in Inside the Market. Indexes that opt to base their weightings on sales, or earnings, or return on equity have beat the benchmarks from anywhere between 53 and 114 per cent over the period dating back to 1991. While the study found greater volatility over short periods, the benefits for long-term investors appear compelling.