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Wednesday, December 6, 2023

Why retail investors may be headed for stocks in big way

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Plus, Toyota’s stop-and-go troubles deepen. Enbridge boosts its dividend. And, Sherlock Holmes boosts Time Warner

Stories Report on Business is following today :

Toyota’s troubles deepen

Toyota Motor Corp.’s TM-N stop-and-go troubles are spreading, with fresh news of more than 100 complaints of brake problems with its Prius model in the United States and Japan. Already reeling from a massive recall and unprecedented production shutdown of key models related to sticky gas pedals, reports this morning say about 100 complaints have been made to the U.S. National Highway Traffic Safety Administration and another 14 to Japanese officials. Toyota shares plunged again and a spokeswoman for the embattled auto maker said Toyota was looking into the latest issue.

Honda Motor Co. HMC-N , Toyota’s main Japanese rivals, is faring much better. Honda today posted its strongest profit in about 18 months and boosted its outlook well above what markets had been anticipating.


Toyota hit by Prius brake complaints

U.S. to broaden probe of Toyota’s vehicles

Has Toyota bungled the important PR war?

U.S. service sector grows

The U.S. service sector, which represents about 80 per cent of the economy, finally expanded in January for the first time since September, though the reading by the Institute for Supply Management today was soft. The ISM non-manufacturing index rose to 50.5 in January from 49.8 in December. The 50 level is the mark that separates expansion from contraction.Still, of 18 segments, just four grew. “On the whole, this report suggests that the U.S. non-factory sector continues to struggle, and has not benefited in any meaningful way from the acceleration in U.S. economic activity in recent months,” said TD Securities economics strategist Millan Mulraine.

U.S. job losses narrow

Job losses in the U.S. private sector narrowed in January to 22,000, a better showing than expected. Payroll company ADP’s report, widely watched as a signpost for Friday’s government employment report, showed the smallest number of job losses in two years.

Enbridge boosts dividend

Enbridge Inc. ENB-T is raising its quarterly dividend by 15 per cent to 42.5 cents after reporting a 14-per-cent increase in fourth-quarter profit. The pipeline company this morning posted a profit of $302-million or 80 cents a share, up from $266-million or 71 cents a year earlier. Revenue fell to below analysts’ estimates, coming in at $3.19-billion, down from $3.92-billion. Enbridge also announced Statoil ASA is joining its regional oil sands system, bringing to six the shippers on the system. Read the story

UBS cuts Suncor target

UBS Securities Canada trimmed its Suncor Energy Inc. SU-T target by $1, to $47 from $48, but is sticking to its “buy” rating. Suncor yesterday disappointed investors with earnings well below analysts’ estimates, its first full quarter after its takeover of Petro-Canada.

Related: Suncor stalls out of the gate

EU backs Greek fiscal plan

Greece, whose fiscal troubles have rippled through stock and currency markets, got something of a thumb’s up from the EU today. Having reviewed its deficit-fighting measures, the European Commission backed the plan to cut the shortfall to below the EU limit of 3 per cent of GDP by late 2012. But the EU said it wanted Greece to take additional measures, and planned to monitor the implementation closely. Markets were watching for the EU stamp of approval, and Greek markets and the euro rose in response. “We are endorsing the Greek program,” Economic and Monetary Affairs Commissioner Joaquin Almunia told reporters. “But at the same time we know that the implementation of the program is not easy.” Read the story

Potash spot price jumps

One of the world’s major potash exporters boosted spot prices for Asia and Brazil by more than 6 per cent, good news for shareholders of Potash Corp. of Saskatchewan POT-T and Agrium Inc. AGU-T . Since the potash heyday, prices have slumped as farmers cut back, but there are tentative signs demand is coming back. Belarussian Potash, which holds a 30-per-cent of the global market, said it boosted the spot price for standard material to $410 (U.S.) a tonne. Notable, too, was that its sales director Oleg Petrov told the Reuters news agency the company can probably strike new agreements in late March or April as “we’re completely sold out.” Read the story

Time Warner raises dividend

Here’s one Hangover that wasn’t so bad for Time Warner Inc. TWX-N shareholders. The media giant today raised its dividend 13 per cent, boosted its stock buyback plan and posted a turnaround in fourth-quarter results, reporting a profit of $627-million (U.S.) or 53 cents a share, compared to last year’s loss of $16-billion or $13.41, which included hefty writedowns. Time Warner, which cut loose AOL Inc. and Time Warner Cable, saw better results from movies, with hits such as The Hangover and Sherlock Holmes.

Separately, AOL AOL-N posted a slim fourth-quarter profit of $1.4-million or a cent a share, a turnaround from last year’s loss of $1.96-billion or $18.52 a share and better than analysts had expected.

Retail money headed to stocks?

Retail investors may be poised to jump into stocks in a big way, Scotia Capital says. Historically, economists Derek Holt and Karen Cordes said in a research note, turning points in the TSX have led the turning points in net inflows into equity mutual funds by about six months with “remarkable consistency.” Add to that the fact that investors are sitting on bundles of cash and that consumer confidence is rising just in time for the RRSP season and “the net effect … should encourage retail investors to sweep non-tax-sheltered deposits across to tax sheltered vehicles like RRSPs and TFSAs with a potential equity bias,” they wrote.

“I think we’re at a turning point in the markets at which we can expect the retail money to pick up at where some of the institutional money may be leaving,” Mr. Holt said.

AIG bonuses ‘outrageous’

Those AIG bonuses in the news this morning may be “outrageous,” but they’re legal, President Barack Obama’s pay czar says. Kenneth Feinberg told ABC’s Good Morning America that that the executive bonuses totalling about $100-million (U.S.) were agreed to in contracts years ago. Read the story

From today’s Report on Business

Why this budget will be Flaherty’s toughest

Disruption at First Uranium

Coffee chain plans to beat the odds

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