Friday, September 15, 2006, 4:15 PM EST (Thomson Financial Corporate
Services): As its southern neighbour posted figures showing an easing in
the rise of its CPI, the TSX had its fears of higher interest rates eased
as well. On a quiet trading day, Bay Street absorbed good news from Adobe,
which raised American markets as it was upgraded on the strength of its
growth from its acquisition of Macromedia, and mixed news from Ford, which
plans to close one plant in Ontario but give new projects to two more. Oil
closed up slightly but the yellow metal continued its slide, lowering the
gold sector. Finally, the Bank of Nova Scotia surged after announcing its
new China deal yesterday, boosting financials.
* The S&P/TSX Stock Exchange Composite Index edged up 7.30 points, or
0.06%.
* US consumer prices rose 0.2% in August, right in line with
expectations, and after recording a 0.4% increase in July; relieved markets
leapt as traders believe the data will keep interest rates unchanged.
Overall, core inflation rose 2.8% over the year, above the Fed's 2% comfort
level; but markets still think the Fed will hold rates steady on September
20.
* Ford has announced that it plans to cut about 700 jobs by closing a
plant in Windsor, one of nine large operations the beleaguered motor mogul
plans to shut down. The company also announced that it will slice its
white-collar workforce by 10,000. However, plants in St. Thomas and
Oakville will be producing new vehicles. The cuts should reduce Ford's
operating budget in North America by US$5 billion per year by 2008; even
so, Ford does not expect to turn a profit on the continent until 2009.
* The Bank of Canada warned today that provincial governments faced
with surpluses should resist the temptation to spend them in ways that will
overheat the economy and raise inflation. Senior Deputy Governor Paul
Jenkins, speaking in Vancouver, said, "Economic outcomes are better and
adjustments less costly when macroeconomic policies are working in tandem."
Coincidentally, the IMF sounded a similar message at its meeting in
Singapore, saying that the danger of inflation was rising in a world that
was close to capacity in production.
* In the resource sector, uranium miner Denison might be acquired by
International Uranium Co. or SXR Uranium Ore; it is one of only two
companies able to explore and produce in Canada, making it more valuable
than its half- a-billion valuation would suggest. Point North Energy has
put itself on the block, after a tax hit and disappointing results from its
Fort Liard reserves in the NW Territories. Finally, Falconbridge is
redeeming certain classes of preferred shares for C$306 million.
* Crude kept its level as a feared Nigerian strike was averted. A
terrorist attack on a Yemeni facility was thwarted, and hurricane season
began to enter its final phase with no damage done to Gulf facilities. Oil
closed up a mere US$0.11 at US$63.33.
* Gold closed down again, as the greenback surged against the Euro. The
yellow metal has lost about 5.6% of its value since last Friday, closing
down US$3 at US$583.
-- Carolyn.Crapo@contractor.Thomson.com; Thomson Financial Corporate
Services
This is Thomson Financial Corporate Services Canadian Commentary, which
is updated twice daily. The information herein is believed to be true and
accurate, we take no responsibility for inaccurate information and reserve
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SOURCE Thomson Financial Corporate Group
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