These are stories Report on Business is following Thursday, July 17, 2013.
Bernanke on bullion
Ben Bernanke no doubt got the tongues of gold bugs wagging today with this comment: "Nobody really understands gold prices, and I don't pretend to really understand them, either."
The Federal Reserve chairman was in his second day of congressional testimony in Washington, discussing how some investors hold gold as a type of disaster insurance. Gold prices, he added, have declined because there's less need for that among investors.
"One reason gold prices are lower is people are less concerned about extreme outcomes, particularly negative outcomes, and therefore they feel less need for whatever protection gold affords," he told the Senate banking committee when asked about prices.
"A lot of people hold gold as an inflation hedge but the movements of gold don't predict inflation very well."
Mr. Bernanke also again buoyed markets on reassurances from the central bank chief that the Fed would be cautious in any move to wind down quantitative easing, its asset-buying program worth $85-billion (U.S.) a month.
Gold, funny enough, also gained on the second day of Mr. Bernanke's testimony.
Bank of Montreal's chief economist believes the Bank of Canada is rather "perky" when it comes to the economic outlook beyond 2013.
That, Douglas Porter says, is because the central bank is betting consumers will do their part for the recovery given that we're saving more and getting a better handle on our record levels of personal debt.
"The Bank of Canada is consistently more optimistic on the growth outlook than most others, especially when looking beyond the current year," Mr. Porter said today.
"Why so perky? The bank is counting on the consumer to contribute more than half the growth in coming years, and they may have something there."
As The Globe and Mail's Sean Silcoff reports, the Bank of Canada now believes the economy expanded by a weak 1 per cent in the second quarter of the year, but projects a pickup in the current quarter.
"While growth will be chopping in the near term as a result of unusual temporary factors, underlying momentum in the economy is expected to build into 2014," the central bank said in its monetary policy report yesterday.
"After picking up sharply in the first quarter of 2013, exports are projected to continue to recover, which should boost confidence and lead to increasingly solid growth in business fixed investment," it added.
"The economy will also be supported by continued growth in consumer spending, while further modest declines in residential investment are expected."
While economic growth is forecast at just 1.8 per cent for all of 2013, the central bank projected that that would climb nicely to 2.7 per cent in each of 2014 and 2015 as the U.S. economy picks up steam and business confidence rises.
"As a share of GDP, Canadian consumer spending is not particularly high – in fact, at 54.1 per cent of nominal GDP, it's now slightly below the 30-year average," Mr. Porter said.
"And, with the personal savings rate at 5.5 per cent and debt/income easing, there may be some scope for consumers to make a nice contribution in 2014/15."
- Poloz spells out ground rules for rate hike
- Sean Silcoff in ROB Insight (for subscribers): Poloz makes a compelling case for uncertainty
- Bank of Canada sees housing market on 'sustainable path'
Telus wants 'parity'
Telus Corp.'s top executive says the federal government's quest to "manufacture" more competition in the $19-billion wireless industry is creating a tilted playing field that is poised to give unfair advantages to deep-pocketed foreign carriers like Verizon Communications Inc. at the expense of Canadian incumbents.
Ottawa is courting Verizon, which under current rules could buy smaller Canadian carriers that other incumbents would not be allowed to acquire. Verizon would also have an advantage in the coming spectrum auction because it would be treated as a new entrant and allowed to buy more wireless licences that telecom executives consider to be the industry's lifeblood.
"All I am asking for is parity in the way Verizon is treated," Telus chief executive officer Darren Entwistle told The Globe and Mail's editorial board today, Rita Trichur and Boyd Erman report.
In doing so, he called on Ottawa to create a level playing field for the industry.
Separately today, Verizon, which is in talks to acquire Canadian wireless upstart Mobilicity, said it sees potential in the Ontario and Quebec wireless markets, reiterating its interest in crossing the border into Canada.
"We continue to explore and have discussions," chief financial officer Francis Shammo told analysts after the U.S. wireless giant posted its quarterly results today.
Mr. Shannon sees potential in Ontario and Quebec, specifically, The Globe and Mail's Bertrand Marotte reports, given the concentration of the country's population.
Shoppers posts gains
Canada's biggest drugstore chain today cited a "challenging economic, competitive and regulatory environment" as it posted gains in profit and sales for the second quarter.
Shoppers Drug Mart Corp., which just this week agreed to a $12.4-billion takeover by the country's biggest grocer, posted a jump in profit to $147-million or 73 cents a share, compared to $145-million or 69 cents a year earlier, The Globe and Mail's Bertrand Marotte reports.
Sales rose 3.3 per cent to $2.5-billion, while same-store sales, a key measure in retailing, rose 3.1 per cent.
"Together with our associate-owners and their teams at store level, we continue to execute on our strategic priorities and growth initiatives which are driving sales and market share gains in our core health, beauty and convenience categories," said chief executive officer Domenic Pilla.
"At the same time, we remain diligent in our efforts to reduce costs and drive efficiencies across the business. Our efforts thus far have us well-positioned heading into the back half of the year in what remains a challenging economic, competitive and regulatory environment."
Dell meeting postponed
The proposed takeover of Dell Inc. has suffered a setback, the company adjourning its meeting today.
No sooner had the meeting begun in Texas, it was put over to next week.
"Dell Inc. announced that today's special meeting of stockholders was convened and adjourned to provide additional time to solicit proxies from Dell stockholders," the company said in a short statement, putting the meeting over to July 24, presumably because it faced an uncertain outcome.
Founder Michael Dell is leading a bid to take the company private for $13.65 (U.S.) a share.
Morgan Stanley profit climbs
Another day, another U.S. bank topping expectations.
Morgan Stanley today posted a hefty jump in second-quarter profit, following in the footsteps of several other U.S. banks that have reported results over the past several days.
The bank's profits climbed to $802-million (U.S.) or 41 cents a share from $564-million or 29 cents a year earlier, as revenue rose to $8.5-billion from $6.9-billion.
Income from continuing operations rose to $1-billion or 43 cents from $562-million or 28 cents.
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