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These are stories Report on Business is following Wednesday, Oct. 16, 2013.

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Senate strikes deal
You don't have to listen too keenly to hear the can clinking down the road.

As The Globe and Mail's Kevin Carmichael reports, U.S. Senate leaders today reached a short-term agreement to end the fiscal showdown in the United States, which means averting a potential default.

But, as the saying goes, this is a can that's being kicked: The U.S. government's partial shutdown would end as its spending authority is restored, but only through to Jan. 15. The debt ceiling, meanwhile, would be raised through Feb. 7.

Which could well mean another period of market turmoil in the New Year, though, all things considered, it wasn't too bad this time around because few believed there wouldn't be at least a temporary solution.

"I just don't see what kind of compromise you could reach given how the lines are so drawn," said geopolitical analyst Pierre Fournier of National Bank of Canada.

"I'm not saying they won't come to an agreement … but the most likely scenario is another period of brinkmanship."

While the markets took this most recent turmoil largely in stride, with some burps here and there ending with a surge today, it's more the impact on the economy from what is seen a broken government system.

"With the U.S. economy outperforming those of most advanced economies since the recession, and with some undeniable progress on the deficit and long-term debt, the U.S. political system is failing to deliver the policies, the focus and the stability which are needed to restore more normal rates of economic growth," Mr. Fournier said.

U.S. risks reputation
There's certainly an issue of credibility where the United States and its currency are concerned, but it's not as simple as Fitch Ratings would have you believe.

Here's what the ratings agency said late yesterday as it warned U.S. politicians about the threat of the fiscal impasse:

"The prolonged negotiations over raising the debt ceiling (following the episode in August 2011) risks undermining confidence in the role of the U.S. dollar as the preeminent global reserve currency, by casting doubt over the full faith and credit of the U.S. This 'faith' is a key reason why the U.S. triple-A rating can tolerate a substantially higher level of public debt than other triple-A sovereigns."

Observers certainly agree there's a credibility concern here, but that the status of the greenback isn't about to change any time soon.

"The issue of credibility is a real one; however, the U.S. still has the largest and deepest capital markets in the world which for now still buys them the title of global reserve currency," said Camilla Sutton of Bank of Nova Scotia.

"There really are not a lot of alternatives, potentially Japan, but that too has its own problems," the bank's chief currency strategist added.

"European markets also have hurdles. For the U.S., politics could see its position as global reserve currency deteriorate fast than it otherwise would – but this is still likely to be measured in years, not months."

Sébastien Galy of Société Générale's foreign exchange group also sees things differently.

"The U.S. trades as a triple-A because the world is financing a higher degree of consumption in the U.S.," he said.

"The alternative would be to let the USD fall vs. the rest of the world, largely wiping out the manufacturing and export industries in emerging markets," he added, referring to the currency by its symbol.

"As the speed with which this imbalance can adjust is slow, the U.S. finds it easy to finance itself externally and especially so in an environment of still significant risk aversion as the world operates below its output gap."

The short-term impact is on Treasury yields, but, as Ms. Sutton noted, that's not to suggest there couldn't be a shift over time.

"Certain officials in China, the U.S.'s largest creditor, have accepted that for now there is little alternative to holding U.S. debt due to the sheer size of their reserves," said market analyst Craig Erlam of Alpari.

"However, they have said in the future, eurobonds could be an alternative if and when they are introduced. The damage being done in Congress right now may not be instantly felt, but may be irreversible further down the line."

Canada, U.S. strike tentative deal
Canada and the European Union have reached a tentative trade agreement, but the Canadian government wants the provinces to sign on before it's sealed, The Globe and Mail's Steven Chase reports.

The government is telling industry it was reached the framework for a deal, sources say.

The tentative deal came after a breakthrough as Canada agreed to more than double how much cheese from Europe can enter the country without hefty tariffs.

Sawaris slams Canada
Egyptian telecom investor Naguib Sawiris vows to never again consider investing in Canada after the government's decision to block a $520-million bid for Manitoba Telecom Services Inc.'s Allstream division, according to a published report.

"I am finished with Canada, I tell you," Mr. Sawiris is quoted in a lengthy article in Ahram Online, the English-language website of Egyptian news organization Al-Ahram.

"I regret that we wanted to invest in Canada," Mr. Sawiris is quoted as saying, The Globe and Mail's Bertrand Marotte reports.

The bid by Accelero Capital Inc., led by Mr. Sawiris, was rejected by the government on national security grounds.

SNC cuts outlook
SNC-Lavalin Group Inc. is slashing its annual profit forecast to well below its previous projection, The Globe and Mail's Bertrand Marotte reports.

The Montreal-based company engineering and construction giant said late yesterday now expects 2013 profit of between $10-million and $50-million. That's in stark contrast to previous guidance of between $220-million and $235-million.

"Certain legacy fixed price contracts entered into by the company between 2010 and 2012 and the ongoing softness in the mining sector unfortunately continue to stress our performance in 2013," SNC chief executive officer Robert Card said in a statement.

What's up with the 5C?
Is there an issue with the new iPhone 5C?

Various reports today suggest Apple Inc. is planning to cut orders of the new model in the current quarter.

Reuters, for example, reports that Apple has told manufacturers it will do just that, suggesting that the new lower-end, plastic phone was priced too high to begin with.

Indeed, CanaccordGenuity analyst Michael Walkley said today that his checks at stores indicate the higher-end 5S are outpacing sales of the 5C by about 2.5"1.

This "significantly higher sell-through" should help Apple results, Mr. Walkley said as he boosted his price target on Apple shares to $580 (U.S.) from $560.

"With our expectations for a full redesign for iPad 5 and increased near-term iPad 5 versus iPad Mini supplier build rates, we believe December quarter iPad sales mix will shift toward the iPad 5 versus iPad Mini," he added, referring to an Oct. 22 announcement by the tech giant.

Some analysts warned against reading too much into the reports related to the 5C.

"There are too many moving parts in the supply chain to draw any conclusions," Benedict Evans of Enders Analysis told Reuters.

Factory sales slip
Canadian manufacturers suffered a setback in August as sales dipped 0.2 per cent, ending three months in a row of increases.

Sales slipped in 11 of 21 sectors measured by Statistics Canada, the agency said today, which accounted for about 40 per cent of all shipments.

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