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Results from retailers mixed The bedroom and the bathroom are among the high points of U.S. retailers reporting June sales results today. While some retailers reported sluggish sales, largely because of discounts on clothes, others are reporting stronger gains, including Abercrombie & Fitch Co. and J.C. Penney Co. .Limited Brands , which runs the Victoria's Secret and Bath and Body Works chains, did better than projected, seeing a 6-per-cent jump in June.
Merck shuts down plants Merck & Co. announced today plans to shut down eight plans and eight research sites, including its research centre in Montreal. Merck, the second largest pharmaceutical company in the world after last year's takeover of Schering-Plough Corp., has announced plans to shed 15 per cent of its post-merger work force, representing some 16,000 jobs. Merck said it is also sticking to its target of annual savings of $3.5-billion (U.S.) by 2012. Read the story
IMF sees slower growth next year Canada's economy will perform better this year than the International Monetary Fund expected, but the outlook for next year is growing dimmer. The global economy is rebounding faster than originally projected, the IMF said in a new report today, but it warned the spreading fears over swollen government debts could derail the recovery. For Canada, the group raised its growth forecast to 3.6 per cent this year, from its earlier projection of 3.1 per cent, but cut its 2011 outlook to 2.8 per cent from 3.2 per cent.
European rates unchanged Both the European Central Bank and the Bank of England held their benchmark lending rates steady today. That was expected but markets are more interested in what ECB President Jean-Claude Trichet has to say about bank stress tests when he holds a press briefing. The stress tests, the results of which will be released July 23, are a big issue across Europe.
"There is a lot of apprehension in the market over what may be potentially revealed by the stress tests, and there are some already voicing criticism that these tests may not be putative enough," said Scotia Capital currency strategist Sacha Tihanyi. "We hold the view that transparency is preferred to opacity, and while there is risk that banks are shown to be sitting on unstable capital bases, European policy makers can manage the risks by suggesting financial support for vulnerable cases (as they have in recent days)." Read the story
Germany shows strength Europe's biggest economy is picking up steam and, on a brighter note for G20 leaders, taking "a step in the right direction" in the area of global imbalances. Industrial production in Germany rose 2.6 per cent in May while its exports soared more than 9 per cent, fresh signs of a rebound driven by industry. What may be more notable - at least from the perspective of other countries that are watching Germany closely - the country's trade surplus narrowed markedly in May to €9.7-billion from €13.1-billion. That was due to a surge in imports of 14.8 per cent, good news for other countries as demand grows. Correcting global imbalances was a key theme at the recent G20 summit in Toronto and, while it's just a one-month measure, it is a step in the right direction, said BMO Nesbitt Burns economist Benjamin Reitzes.
"Improved demand out of Germany is something global leaders have been pleading for, to help rebalance the global economy and boost global growth," Mr. Reitzes said.
China's current account surplus to shrink China says its current account surplus will shrink for a second consecutive year this year as domestic demand grows. The State Administration of Foreign Exchange, or SAFE, said the current account surplus fell last year to 6.1 per cent of gross domestic product from 9.6 per cent a year earlier.
"The momentum for the trade surplus to widen will moderate," it said. "The current-account surplus as a percentage of GDP will decline further."
The current account is the broadest measure of trade.
Cogeco Cable shows cable growth Cogeco Cable Inc. posted third-quarter results today that showed continued growth in its Canadian cable business and some stabilization of its Portuguese subsidiary, where tough competition and a dismal economy had driven the company into deep discounting. Revenue of $319.3-million fell below analysts' estimates. But profit of $31.2-million, or 64 cents a share, beat estimates even though it trailed last year's showing of $32.5-million or 67 cents.
"Overall, we continue to believe the stock is fundamentally undervalued, with a discounted multiple that is well below multiples for its peers," said Desjardins analyst Maher Yaghi. "The Portuguese operations are continuing to show stabilization in terms of subscribers, which should eventually lead to stabilization financially and thus remove the drag from Portugal on consolidated results. At the same time, the Canadian operations continue to show decent growth trends, driven by subscriber additions and pricing increases." Read the story
Stock markets rally Global stock markets are rallying this morning, following yesterday's strong showing in North America. London's FTSE 100 rose more than 1 per cent by about 6 a.m. ET, while Germany's DAX gained 0.4 per cent and the CAC-40 in Paris 0.9 per cent. U.S. stock futures are also rising.
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