These are stories Report on Business is following Wednesday, June 22. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
iCloud to be iPopping The new iCloud service from Apple Inc. is shaping up to be a huge hit. Or, as RBC Dominion Securities puts it, "iPopular."
"Proprietary RBC survey data shows 76 per cent of iPhone users intend to use Apple's iCloud service," said analysts Mike Abramsky and Mark Sue, whose price target on Apple shares is $450 (U.S.).
"This high response rate affirms the growing interest in storing, syncing and sharing music, photos, documents across multiple devices. Based off the survey data, Apple could sign up estimated 150 million iCloud users, moving into the scope of leading of online user bases."
The new iCloud service which allows users to access music or photos on various devices, was part of a broader sweep that also included iMessage, similar to the BBM function on the Research In Motion Ltd. BlackBerry.
The iCloud venture was unveiled earlier this month as the war heats up among the likes of Apple, RIM and Google Inc. , whose Android operating system is a big success.
"Thirty per cent of surveyed iPhone users are very/somewhat likely to spend $24.99 per year for iTunes Match to host their non-Apple music libraries in iCloud," the RBC analysts said in a research note.
"Seventy-three per cent of iPhone users intend to use iMessage, equating to up to 150 million iMessage users ... Because it stores user data, iCloud, along with iTunes is expected to enhance loyalty and stickiness of Apple's customers, helping defend against threats from Android."
Greece still in eye of storm We already know from its fiscal mismanagement that the Greek government has trouble with basic math. So someone needs to explain to Prime Minister George Papandreou that a 12-vote victory is not an overwhelming show of confidence.
Perhaps the markets are doing just that, and that's why the euro hasn't moved much and investors are taking last night's confidence vote in stride.
Mr. Papandreou's government survived - note how everyone uses the term "survive" - what had been billed as a crucial parliamentary vote that will allow Athens to push forward with a fresh round of cuts tied to the terms of its bailout.
It survived because the 155 politicians in his party voted to support him, against the 143 opponents who wanted him gone. That's in a parliament of 300 seats, and, really, that vote has changed little.
Mr. Papandreou still has to push through severe austerity measures that will slash the public sector and increase taxes. And while the politicians in his own party may have confidence in the prime minister, not so the Greek public, who continue to protest in the streets.
"Markets quickly shook off the 155-143 results of last evening's confidence vote in Greece's Parliament," said Derek Holt and Karen Cordes Woods of Scotia Capital.
"One reason is that it's a sideshow in advance of the June 28 vote on further austerity measures that the Greek cabinet is discussing today," they said in a report.
"Another reason is that the vote unfolded entirely on party lines and that fails to signal the broadly based support for additional fiscal austerity that the rest of Europe has been seeking before releasing the next tranche of financing and offering a longer term solution before eventual multiple defaults. Lastly, even if short-term bridge financing and additional austerity measures are both enacted, the ball is then tossed back in the court of Europe's leaders (especially Germany) when it comes to offering a solution that takes Greece beyond the next test when additional financing would be required in September."
At stake are billions in rescue funds. Officials of the EU and the International Monetary Fund are refusing to give Athens €12-billion from their original bailout package until they're assured the austerity measures will be implemented. Then there's a second rescue package under discussion.
What's happened here is that Mr. Papandreou has, as the saying goes, simply dodged a bullet. Greece and the wider euro zone still have many challenges ahead.
Risks on rise Risks to the economy and financial system are rising, the Bank of Canada warns in a report that cites Europe's debt crisis, an uneven global rebound and debt-burdened consumers are still vulnerable.
In their latest semi-annual assessment of the financial system, central bank policy makers said today that Canada's banking sector remains relatively sound, Globe and Mail economics writer Jeremy Torobin reports.
But they warned again that Canadian banks could be affected significantly should the European debt crisis spread to the continent's bigger countries or beyond, or if Canadian households are unable to manage their debt loads when interest rates rise, or if there's another downturn in the jobs market
Markets await Fed All eyes are on the Federal Reserve, which is expected today to hold its benchmark lending rate steady, but may signal a softer economy. And he's expected to stand pat on quantitative easing, or QE, the Fed's controversial asset-buying program.
Here's what some observers expect when the U.S. central bank's policy-setting panel, the Federal Open Market Committee, announces its decision at 12:30 p.m., followed by a news conference with chairman Ben Bernanke:
"The FOMC should note the completion of QE2 and continuation of the reinvestment program in the near term. Softer data since April could see the economic assessment marked down. Since the April 27 FOMC meeting, however, private sector economists have revised down their 2011 GDP forecast from 2.9 per cent to 2.5 per cent, so arguably this would simply be a catch-up move with limited information content." Adam Cole, global chief of foreign exchange strategy, RBC
"Together, the comments are likely to remind markets that the Fed is a long way from meeting its dual mandate and is likely to maintain exceptionally loose monetary policy much longer than most other central banks. We find it hard to create a sustainable medium-term case for [U.S. dollar]strength, when the combination of loose U.S. monetary policy, the lack of a fiscal plan, an uneven growth pattern and negative investor sentiment all favour a weaker [U.S. dollar]" Camilla Sutton, currency strategist, Scotia Capital
"The only issue in the press release is how the Fed describes the lacklustre performance of the economy since the prior meeting on April 27. A lot of economic water has flowed under the bridge over those eight weeks, and most of it pretty murky. After a mixed April, May results were uniformly bad, and the early June data are not much better. Last time, the Fed voted unanimously to end QE2 in June, and official comments and rising core CPI have all but ruled out QE3 (but never say never) ... Look for the FOMC to retain a commitment to continue reinvesting its maturing assets, to prevent a de-facto tightening in policy, and to repeat the 'extended period' language on rates, effectively ruling out the chance of a near-term rate hike." Douglas Porter, deputy chief economist, BMO Nesbitt Burns
"The signs of a renewed economic slowdown should not prompt a knee-jerk reaction from the U.S. Fed when its two-day policy meeting concludes today ... The accompanying statement is bound to acknowledge the evident loss of momentum, as should Fed Chairman Ben Bernanke in his second ever post-meeting press conference. But given that the slowdown could be due to temporary factors, that the imminent threat of deflation has eased and taking into account the mixed results of QE2, we see little prospect of QE3, at least not this year." Paul Ashworth, chief U.S. economist, Capital Economics
Alberta a draw Job seekers are flooding back to Alberta after a two-year lull, lured by a resurgence in the oil patch and growing hiring demands, The Globe and Mail's Janet McFarland writes today.
Alberta saw a net inflow of 5,300 people from other provinces in the first quarter of 2011 - its highest rate of interprovincial migration since the first quarter of 2006, according to Statistics Canada preliminary population data reported today.
The province saw steady inflows of workers from other parts of Canada between 1995 and 2009, but saw outflows in 2010 for the first time in 15 years.
TD cuts Encana TD Securities has cut its 12-month price target on shares of Encana Corp. after its proposed joint venture with PetroChina International Investment Co. died yesterday.
Analyst Menno Hulshof cut his target to $34 (U.S.) from $37, and kept his recommendation at "hold," citing the collapse of the deal involving its Cutbank Ridge shale gas project in northeastern British Columbia.
As The Globe and Mail's Nathan VanderKlippe and Carrie Tait report, the deal fell apart over issues of overseeing the joint venture.
"It is hard to argue that this news is anything but negative in the near term, but for those with a long-term view, the good news is that [Encana] will be retaining what we view as one of its best assets (contingent upon the outcome of its revised JV initiative for its Cutbank Ridge assets)," Mr. Hulshof said in a report.
"Our [Encana]production estimates increase, since production originally carved out for the JV has been reincorporated into our model. The impact to our financial statements, on the other hand, is far more pronounced since a reduction to its projected cash position (the $5.4-billion associated with the JV) causes its interest payments to increase."
In Economy Lab today The concept of "average debt" is worse than meaningless, Stephen Gordon writes.
In International Business today The question about the prospects for Greece is not whether the country will default. It's whether a default would be enough to return the economy to reasonable health. Martin Wolf of The Finance Times doubts that.
In today's Report on Business
- Reinsurers promoting 'longevity risk' products
- Mirabel emerges as aerospace 'magnet'
- Frank Stronach sells large stake in Magna
- Neil Reynolds: A debt disaster by whatever measure you use