Here are five things you need to know this morning
Canadian economy declines: There is fresh evidence today that Canada’s economy is in sluggish shape. Gross domestic product contracted by 0.2 per cent in February, missing expectations for zero growth and wiping away half of January’s 0.4 per cent expansion. It was the first monthly contraction since November, and was led lower by mining, oil and gas, construction, transportation and warehousing, and real estate. As well, StatCan’s “flash” estimate for March showed output rising by a slight 0.1 per cent. The weak economic outlook will be taken into consideration by the Bank of Canada, which paused its rate-cutting cycle earlier this month. Its next rate decision is set for June 4.
Loblaw revenue and profit rise: Grocery giant Loblaw is reporting a profit of $570 million in its first quarter – up modesty from the same period a year earlier. That profit came after total revenue rose by four per cent to $14.1 billion. Loblaw says same-store grocery sales – a measure of sales performance that excludes newly opened stores – rose by 2.2 per cent, with strong customer response to loyalty offers and promotions. E-commerce sales increased by more than 17 per cent. CEO Per Bank says Loblaw will continue to support Canadian companies and brands and highlight Canadian-made products in its stores.
Starbucks misses estimates: Shares of Starbucks traded down in the pre-market after the company missed earnings and sales estimates in its latest quarter. CEO Brian Niccol says the coffee chain is making progress despite the disappointing results. Since Niccol’s takeover as CEO last year, the company has overhauled its cafes and plans to speed up service by adding more workers and using an algorithm to prioritize orders.
Trump needles Powell again: U.S. President Donald Trump has renewed his criticism of U.S. Federal Reserve Chair Jerome Powell. At a rally just outside of Detroit last night, Trump said: “Inflation is basically down, and interest rates came down despite the fact that I have a Fed person who’s not really doing a good job.” The president’s denunciation came even though earlier this month he said he did not plan to fire the central bank chief.
Mobius sitting on cash: Veteran emerging-markets investor Mark Mobius is keeping the bulk of his funds’ holdings in cash as he waits out trade-related uncertainty. In an interview on Bloomberg Television on Wednesday, Mobius said: “At this stage, cash is king. So, 95 per cent of my money in the funds are in cash… We’ve got to keep the cash and be ready to move when the time is right.” Mobius, who has been investing in developing markets for about three decades, said some emerging market countries such as India will do quite well in the current environment, “but we have to wait until all of this evens out and we see a settling down of this uncertainty.”
