Skip to main content
business briefing

These are stories Report on Business is following Monday, Jan. 5, 2015.

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

Stocks, loonie hit
Financial markets reeled today as the price of oil sank at one point below the $50 mark.

Stocks tumbled around the world, particularly in Toronto, where the market lost 2.4 per cent.

The Canadian dollar hit its lowest level in more than five years, at 84.55 cents U.S. before regaining ground to top 85 cents, and the euro its lowest in about nine years.

"It is Groundhog Day for oil, and stocks like Chevron and Exxon have seen a couple of per cent shaved off the value of their share price," said market analyst Alastair McCaig of IG in London.

And the "relentless battering" of major oil stocks will only get worse, he predicted.

The February contract for West Texas Intermediate, the U.S. crude benchmark, slipped below $50 (U.S.) a barrel before closing at $50.04 - the lowest settlement price since April 28, 2009.

The U.S. dollar, meanwhile, continued to push higher, spelling weaker times for its Canadian counterpart.

"The strong U.S. dollar trend is very strongly in place as we move into the new year," said chief currency strategist Camilla Sutton of Bank of Nova Scotia.

"The trend is hard to fight."

Adding fuel to the fire are fresh concerns over the possibility of Greece leaving the euro zone.

The euro fell below a key mark after new reports suggested Germany wasn't all that worried about a currency union without Greece.

German officials later stressed, however, that they still want the Greeks in the euro zone.

On top of that are the gains scored by anti-austerity politicians in the run-up to a Greek election.

"We are now entering what could be the final chapter of the Greek saga, in which the indebted nation breaks free from the single currency and tries to go it alone," said IG's Mr. McCaig.

"The rise of the anti-austerity Syriza party has sent shivers down the spine of dealers as they are well positioned for the election this month," he added.

"A victory for the left-wing party does not automatically mean a Greek exit but traders will certainly see it that way. Angela Merkel seems to have accepted Greece's withdrawal from the single currency as a foregone conclusion, and this tell traders the struggling country has Germany's seal of approval."

Loonie headed lower
Observers expect the Canadian currency to sink lower yet.

Indeed, Nomura Securities believes it could hit about 82.5 cents, possibly within a few weeks.

Nomura's Charles St-Arnaud gives six reasons in a new report:

1. The oil market rout continues.

2. The Bank of Canada is likely to trim projections for economic growth at its next meeting this month.

3. So-called fair value models suggest "an equilibrium" of about 82.5 cents, so "the currency seems to have some additional catch-up work to do."

4. The make-up in global reserves could be a "new negative force" for the loonie. In fact, central banks have been shying away from the Canadian dollar, according to the last reserve currency report from the International Monetary Fund, released last week.

5. Flows into Canadian assets have been weak.

6. Many investors were "disappointed" by how the loonie trailed the rally in the U.S. dollar in the second half of last year.

Data stolen
One of Wall Street's big players has disclosed the theft of partial account information on up to 10 per cent of its wealth management clients.

Morgan Stanley said today it fired an employee and told authorities about what happened.

"While there is no evidence of any economic loss to any client, it has been determined that certain account information of approximately 900 clients, including account names and numbers, was briefly posted on the Internet," the bank said.

"Morgan Stanley detected this exposure and the information was promptly removed."

It wasn't immediately clear what information was stolen, but the bank said passwords and social security numbers weren't included.

Business ticker

Report an editorial error

Report a technical issue

Editorial code of conduct

Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 12/04/24 4:18pm EDT.

SymbolName% changeLast
Bank of Nova Scotia
Bank of Nova Scotia
Canadian Dollar/U.S. Dollar
Morgan Stanley

Interact with The Globe