Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

These are stories Report on Business is following Friday, Sept. 27, 2013.

Follow Michael Babad and The Globe's Business Briefing on Twitter.

'Nervousness is the order of the day'
Investors are on edge this morning as U.S. politicians head into a crucial weekend that will determine whether the government shuts down on Tuesday.

Story continues below advertisement

There are several factors playing into global markets today, but investors are eyeing what promises to be another round of bitter fighting over the weekend.

"The haggling between U.S. President Barack Obama and the Republicans has already started in the public arena, but in order to ensure that the U.S. does not see its debt downgraded again Mr. Obama needs to move this on, and quickly," said market analyst Alastair McCaig of IG in London.

"This will be the third time in less than two years that the U.S. will have needed to take action to avoid hitting its debt ceiling; rather than once again kicking the can down the road they should tackle the underlying  issues."

The deadline is Monday, the end of the U.S. fiscal year, and tensions are running high, as expected, heightened by wrangling yesterday.

The fear is that the government could shut down on Tuesday, and, though unlikely, default by midmonth.

Tokyo's Nikkei slipped 0.3 per cent today, though that had more to do with Japan's latest inflation reading, while Hong Kong's Hang Seng gained 0.3 per cent.

In Europe, London's FTSE 100, Germany's DAX and the Paris CAC 40 were down by between 0.1 per cent and 0.7 per cent by about 8:45 a.m. ET.

Story continues below advertisement

Dow Jones industrial average and S&P 500 futures also slipped.

"The president isn't prepared to negotiate the implementation of Obamacare as part of a deal to get an increase in the debt ceiling through, so this can go to the wire," said Kit Juckes, the chief of foreign exchange at Société Générale.

"U.S. data have been mixed (yesterday a case in point as pending home sales were soft and jobless claims very strong) and the economy doesn't need even a temporary hit from a government shutdown," Mr. Juckes said in a research note.

"Obviously, that would spook risk sentiment and push back tapering into the future," he added, referring to when the Federal Reserve will begin easing its bond-buying stimulus program.

"If/when a deal is reached economic sentiment and risk appetite are likely to get a simultaneous boost. A strong credit and [emerging markets] rally would/will be unleashed. But for now, nervousness is the order of the day."

BlackBerry posts ugly loss
Here's the good news: BlackBerry Ltd. shares aren't falling this morning. And the bad? As expected, the embattled smartphone maker posted a second-quarter loss of $965-million (U.S.).

Story continues below advertisement

That loss of $1.84 a share compares to a loss of $84-million or 16 cents a year earlier, The Globe and Mail's Omar El Akkad reports.

Revenue slumped to $1.6-billion from $2.9-billion as BlackBerry sold just 3.7-million devices in the quarter.

BlackBerry took a $934-million hit on unsold inventory, a sign of just how much the business has eroded.

The company warned of this a week ago, leading to a plunge in its stock price, and on Monday announced a tentative deal to be taken private by a consortium led by Fairfax Financial Holdings Ltd.

BlackBerry shares, however, are about $1 below the Fairfax proposal of $9 a share, or $4.7-billion, indicating doubt in the market that the deal will be done amid several questions related to the letter of intent between the two companies.

But, as The Globe and Mail's Tara Perkins reports, Fairfax chief executive officer Prem Watsa says he's confident he will succeed.

Story continues below advertisement

BlackBerry shares are up by more than 2 per cent in premarket action in the United States, at $8.13.

"We are very disappointed with our operational and financial results this quarter and have announced a series of major changes to address the competitive hardware environment and our cost structure," BlackBerry chief executive officer Thorsten Heins said today as the company released the results.

"We understand how some of the activities we are going through create uncertainty, but we remain a financially strong company with $2.6-billion in cash and no debt. We are focused on our targeted markets, and are committed to completing our transition quickly in order to establish a more focused and efficient company."

Analyst keen on Bombardier
CanaccordGenuity is awfully keen on Bombardier Inc. stock.

Here's what analyst David Tyerman said today as he maintained his "buy" recommendation and price target of $6 on shares of the Canadian plane and train manufacturer:

"We believe Bombardier (BBD) will prove to be a very strong share price performer over the next few years, driven by expectations of very significant earnings growth. Earnings should increase from much improved BBD Aerospace (BA) demand, substantial incremental earnings from new BA products and improved sales and margins at BBD Transportation (BT. Free cash should also surge from the above factors and from a significant decline in new product investment."

Story continues below advertisement

Mr. Tyerman's research note followed investor meetings with Bombardier Aerospace chief Guy Hachey, and the outlook for the company's new C series planes.

"BBD is very happy with the C series first flight and reconfirmed its expectation of a 12-month flight testing campaign for the CS100 model," the analyst said.

"M. Hachey also reiterated expectations of 300 firm orders at entry into service (EIS) from 20-30 customers. Performance confirmation, which should happen in about six months, could drive increased order flow."

Streetwise (for subscribers)

Economy Lab

ROB Insight (for subscribers)

Story continues below advertisement

Business ticker

Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies