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These are stories Report on Business is following Monday, Dec. 3, 2012.

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Calgary weathers storm
Calgary, home to Canada's oil patch, is weathering the housing storm playing out in some other major cities, notably Vancouver and Toronto.

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"Despite elevated concerns regarding household debt and activity in other Canadian markets, the housing market continues to demonstrate resilience in Calgary," Ann-Marie Lurie, chief economist at the Calgary Real Estate Board, said in a statement.

"This is related to the migration, wage and employment growth recorded in the city."

Having said that, some easing is seen on the horizon.

"Slower growth trends in the employment market along with changes in lending policy and near-term challenges in the oil sector will likely dampen demand, preventing a boom," Ms. Lurie said.

"The decline in new listings will compensate for any adjustment in demand, helping maintain price stability in the market."

Sales in November rose 8 per cent from a year earlier, the group said today, to 1,457 from 1,345. So far this year, sales are up by more than 15 per cent, to 20,128 from 17,471.

New listings fell 11 per cent from a year earlier, and active listings 28 per cent.

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The benchmark selling price rose 7.3 per cent from a year earlier, to $388,800.

"Clients are more cautious today and considering all their options," said Bob Jablonski, president of the group.

"They have reverted back to considering if this is a home they can stay in for many years, because the quick equity gains are less likely."

Saputo in major deal
Canada's Saputo Inc. has struck a $1.45-billion (U.S.) deal to acquire Morningstar Foods LLC, a major expansion in the United States.

The Canadian dairy company is buying its U.S. rival from Dean Foods Co., The Globe and Mail's Bertrand Marotte reports.

Morningstar also produces dairy items, including creamer, ice cream, sour cream, cottage cheese and "half and half." (And, no, the deal's all cash.)

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It has some 2,000 employees and 10 plants in nine states.

On a pro-forma basis, the combined businesses would have meant revenue of $8.6-billion (Canadian) in the year ended Sept. 30.

China looks better
China's economy continues to perk up, buoying the hopes of investors.

Purchasing managers indexes released by the government and HSBC/Markit showed readings of 50.6 and 50.5, respectively, both above the key 50 mark that separates contraction from expansion.

It's the first time in more than a year that both are above that line.

As Carolynne Wheeler reports from Beijing today, the fresh readings suggest that China's fortunes continue to pick up despite the global uncertainty and troubles in Europe.

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And it's the government that is largely driving the recovery.

"The recovery is unbalanced, with smaller firms reporting that conditions are the weakest in six months," said Mark Williams and Qinwei Wang of Capital Economics in London.

"Over all, the broad picture from November's PMIs is encouraging," they added in a research note today.

"But it is a concern that the small and medium-sized firms that account for two-thirds of industrial output and a larger share of the economy are not participating in the recovery."

Europe suffers
Europe's manufacturing sector, in turn, continues to contract, though the latest readings today suggest it's not as bad.

The Markit PMI for the euro zone climbed in November to 46.2 from 45.4 a month earlier, though it has been below 50 for well over a year. Britain's reading was better than markets expected, but it's still continuing to contract, as well. Both measures come in advance of policy announcements later this week by the European Central Bank and the Bank of England.

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"Despite some improvement in the U.K. measure, Monday's survey results continue to suggest that underlying growth in the U.K. and euro zone remains weak which could put pressure on the ECB and BoE to pull the trigger on further easing when the respective committees meet later this week," said Carl Campus of BMO Nesbitt Burns.

Separately, Greece unveiled a plan worth some €10-billion, $13-billion (U.S.), to buy back bonds, a move tied to its bailout money

The prices are said to be better than expected, and holders have until Friday to sign on.

This comes amid another meeting of euro zone finance ministers.

The U.S. reading from the Institute for Supply Management also was disappointing, at 49.5.

Canaccord keen on Lululemon
CanaccordGenuity analysts are giving Lululemon Athletica Inc. a strong vote of confidence, with an initial "buy" rating as the company evolves from its yoga roots to "a lifestyle brand."

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Analyst Camilo Lyon today initiated coverage of the Canadian retailer with a target price on its stock of $91 (U.S.) in advance of its third-quarter earnings report Thursday.

As The Globe and Mail's Marina Strauss reports today, Lululemon generally defies the naysayers and beats the targets of analysts. It was among just a handful of U.S. retailers that stayed away from promotions on Black Friday.

Canaccord's Mr. Lyon is keen on the company, saying he believes key manufacturers are expanding production lines decided to Lululemon next year, and that online retailing should boosts its international breadth.

"We believe LULU is evolving from an athletic brand with its roots in yoga to a lifestyle brand that is marrying from and function," he said, referring to the company by its U.S. stock symbol.

"To that end, the company has had issues in keeping pace with demand."

Lululemon has been earning below its potential because of this, and "we estimate increasing production capacity could result in an incremental 9 cents to 18 cents in [earnings per share] in 2013," he said in his research note.

"We believe LULU has solid unit growth prospects both domestically and internationally," he added. "With just 200 total stores today, we believe LULU can double its U.S. sq. ft. while growth abroad is in its infancy."

Lululemon is among the most productive chains in the United States.

In mid-November, U.S. researcher Retail Sales ranked the chain number three in terms of money made per square foot, at $1,936, behind Tiffany and Co.'s $3,017 and Apple Inc.'s $6,050.

It also put Lululemon among the 10 fastest-growing retailers, based on the annual gain in store sales.

Bonus expectations rise
More Canadians expect to get a holiday bonus this year despite the trying times, a new survey suggests, and the majority of those who do aren't going to spend it.

The Bank of Montreal poll released today shows about 25 per cent of working people expect the year-end payout. Of those who are actually eligible for a bonus, 44 per cent expect one, a finding well up from last year.

The majority of those who expect it – 60 per cent – believe the payout will be the same as last year, while 26 per cent expect more and 14 per cent less.

What's really interesting is what people plan to do with the money. Twenty-six per cent would save or invest it, 25 per cent would cut their debts, and 20 per cent would use the money to buy holiday gifts.

Less than 10 per cent would "reward" themselves by buying something (seems like my category), and 9 per cent would take a vacation.

Just sayin'
The newest royal couple is expecting a royal baby, and the duchess is now in hospital with acute morning sickness, according to a statement they released today, adding that "the Queen, the Duke of Edinburgh, the Prince of Wales, the Duchess of Cornwall and Prince Harry and members of both families are delighted with the news." So the focus is off Mark Carney and the Bank of England for a while, at least.

Tony Clement, the chief of Canada's Treasury Board, had this to say on Twitter last night while watching TV: "The Walking Dead is seriously intense tonight." (You should hear what the Liberals say about him.)

The Vatican said today that Pope Benedict XVI will begin tweeting on Dec. 12, using the Twitter handle @Pontifex. Pontifex has more than one meaning, one of which is "bridge builder." It's also a game for $20 from Chronic Logic where you design and test bridges.

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