Today will start off with the election in Prince Edward Island, but the voting-to-watch begins tomorrow (sorry, P.E.I.), with Alberta heading to the polls. In the morning, I’ll do a preview of what Maclean’s writers are saying about the future of the province’s oil rout as a leadup.
The international election this week is the British general election on Thursday, which has been a many-monthed odyssey and, as of writing, still seems to be too close to call. For the City, London’s financial centre, this comes at a time of increasing political debate over tax evasion and bank levies, with HSBC recently pledging they would consider relocating their headquarters outside of the U.K. due to the price of the tax.
Meanwhile, the market mover this morning is manufacturing numbers from China (via the HSBC/Markit index), which were revised further below 50 (which separates growth from contraction), to 48.9 from 49.4. What this means is further proof that there is less demand in Chinese factories, despite recent bouts of stimulus from the Chinese government to make borrowing cheaper and push up growth. Nonetheless, European markets reacted by anticipating (still) more stimulus from Beijing, and are feeling strong after jumps in New York on Friday – the TSX also had a 115-point boost, pushed by gains by pharmaceuticals and copper mining companies. In London, markets are closed for a bank holiday.
The big thing to watch for this week in economic data is housing data across Thursday and Friday, and on Friday it’s Jobs Day for both the U.S. and Canada, with the latest unemployment data out for the previous month. There’s also sad news in the tech industry, with the death of David Goldberg, head of the online polling company SurveyMonkey, and husband of Facebook executive Sheryl Sandberg. In Greece news: no news, despite negotiations over the weekend. Talks continue today.
A fitbit for your life insurance? The U.S. division of Canadian insurance company Manulife is trying to get people to track their health – and lower their life insurance costs. They want to use the newest slate of fitness-trackers – which include the Fitbit and the Apple Watch – to collect data on the wearer’s fitness level. Along with doctor’s appointments and gym visits, the “points” add up to discounts on life insurance, and the greater plan is to reboot the sagging growth of insurance companies, through our 21st-century desire to record our every move. The program has also been tried out in other countries, including Indonesia and South Africa, but has yet to come to Canada. In the U.S., companies who pay health insurance have also been pushing employees to wear the devices, in order to track their health data and negotiate discounts on coverage – but they need to overcome privacy concerns and the “creepy factor” in order to do so.
The Big Mac turnaround plan. McDonald’s has seen one bad headline after another: in their latest earnings report, last month, they reported an 11 per cent drop in revenue, with same-store sales down 3.3 per cent. Their problems have been attributed to everything from a strong U.S. dollar, slower economic growth in Europe, food-safety scandals in Asia, the obesity epidemic in the U.S., the rise of gourmet burgers and burrito chains (like Chipotle), and the fact that they still don’t serve all-day breakfast. One of the most persistent trends is what every fast food chain and brand is fighting with in North America: tastes are changing, and customers are demanding fresher, healthier (to some extent) food, and more variety. So today’s the day their brand-new CEO will announce a major “turnaround plan,” which Big Mac watchers are saying will include cutting hundreds of stores, slimming down the menu (while possibly adding more burger toppings and yes, all-day breakfast), buying back shares and selling company-owned restaurants. But for all the claims of a fading giant, let’s not forget what a behemoth McDonald’s continues to be: while the chain will slow down the pace of opening new restaurants, it will still open 600 to 700 this year – and has more than 36,000 worldwide.
Everybody’s talking about the Powerwall. Elon Musk says Tesla, the electric car company, isn’t just about cars – it’s about the batteries that power those cars. Those batteries could soon be showing up in homes – designed to store electricity from either the grid or renewable power systems for when the sun isn’t shining or when grid prices are expensive. In an announcement on Thursday, Musk said, “Our goal here is to fundamentally change the way the world uses energy.” Initially, the battery will likely stay fairly niche: the first models are expensive ($3,000 to $3,500 before installation). But eventually the product could allow homeowners to take advantage of going “off the grid” when energy prices spike during busy hours, or during blackouts. In theory, the batteries would eventually be powerful enough to take a home entirely off the grid. Before then, the uptake will likely come from other companies: Amazon and Target both said they would start using the battery, and the company has announced a factory in Nevada that would make mass production possible by 2017. Meanwhile, Tesla’s core business – cars – has seen a bumpy road lately as expectations for their latest earnings have been repeatedly slashed. Those earnings will be announced next week.
Need to know:
TSX: 15,339.77 (+115.25), Friday
Loonie: 82.26 (-0.63), Friday
Oil (WTI): $59.38, Monday (5 a.m.)