The chase by Frances Horodelski:

“………and to be brutally honest, unlike their male counterparts with thinning hair, laugh lines, and graying temples, these ladies’ on-camera careers typically have a “sell-by” date…..” Randall Forsyth, Barron’s. Ouch.So with that as your thought for the day, let’s get going.

Last week was miserable for commodity and Canadian stock investors. There were margin calls (or the worry of them) as well as some wholesale selling of Canadian equities (program trades) with no-one on the other side willing to step up. We are also into the end of the quarter which can see wild shifts in portfolios.

At the same time, the U.S. dollar’s bid hasn’t dissipated putting further pressure on the commodity trade. Last week saw the material sub-sector decline almost 5%. Only utilities and industries were up last week on the TSX. In other weakness, the small cap sectors in the U.S. were bleeding and not keeping up with the big cap new highs. Indeed, the Russell 2000 was down 1.21% last week and has declined three weeks in a row.

The week isn’t quite as busy as last week, but influential things are happening. First, we start with merger Monday with more than $25 billion worth of deals announced – all kind of “old-tech” with Siemens buying Dresser-Rand and Merck KGaA buying Sigma-Aldrich. Both deals are all cash and at premiums of 14% and 37%, respectively (with DRC the premium is based on the price before the rumour spiked the stock on Friday and +37% since July). EMC is highlighted in the Wall Street Journal as talking about a potential combination with the likes of Hewlett Packard.

In other news, the week is active with climate change front and centre in advance of the UN’s climate change summit which starts tomorrow. It is also “flash” PMI time (again!) with HSBC’s PMI for China to be released tonight (estimate 50 versus last month’s 50.2). We will see similar numbers for the U.S. and Europe tomorrow with France being the expected very weak link with a 47 level (versus last month’s 46.9). A number under 50 indicates a contraction in the manufacturing side of the economy.

We’ll also get a third and final look at U.S. GDP that is estimated to be even higher than the previous look at 4.2% (that number comes out Friday). There are a few major companies reporting results including Bed Bath & Beyond on Tuesday and Nike on Thursday. We have Blackberry’s new product launch (the Passport) on Thursday.
With respect to monetary policy, this week will see speeches from eight Federal Reserve officials including New York Fed Dudley today. Also today, Mario Draghi attends a European Parliament committee on monetary policy.

Other things to be watching. The price of gasoline in the U.S. is down 34 cents in the past 13 weeks. For context, each penny drop in gasoline adds $1 billion to consumers’ pockets – like a tax cut. Barron’s has bullish stories on Bank of America (50% upside), Yahoo! (potential value to $58) and a positive turn to European equities and beer stocks.
According to people who watch the calendar, beware the autumnal equinox “markets have a history of moving up or down” into this day (uh, duh, don’t they always go up or down?). Alternatively, there is the old “sell Rosh Hashanah, buy Yom Kippur” adage. The Jewish New Year holiday begins Wednesday evening.

According to Richard Ross, technician at Auerbach Grayson who has been negative on equities, watch the dollar index as it approaches the 89 level where previously two spikes there have resulted in a 57% and 17% declines in the S&P 500. Standard & Poor’s notes that 46% of S&P 500 sales come from foreign sources – a strong dollar can ultimately pressure those return profits (I say ultimately because hedging and smooth are on-going ways that big corporations alleviate the immediate pain).

And that’s it. Market weakness is evident this morning as investors grapple with the euphoria of Alibaba, enthusiastic pace of M&A, the narrowing breadth in the markets but more importantly, for Canadian investors, who wants to buy our “stuff” and our companies? It’s tough out there – looking for opportunities requires a very sharp pencil. We’ll cover the opportunities all day long on BNN. Join us.
Every morning Business Day Host Frances Horodelski

Market Today

BUZZ-U.S. Stocks on the Move-USEC, Vivus, Marchex, Emcore (Thomson Reuters)

(For faster updates on individual market-movers, Eikon users please use search string "STXBZ US"; for more market insights, including options activity, ; for the Day Ahead newsletter, http://link.reuters.com/mex49s; for the Morning News Call newsletter, http://link.reuters.com/nex49s) U.S. stock indexes rose on Thursday. The Dow Jones industrial average was up 0.53 percent at 17,247.6, the S&P 500 was up 0.40 percent at 2,009.58 and the Nasdaq Composite was up 0.60 percent at 4,589.788.

** APPLE INC, $101.929, +0.34 pct

The company's iPhone 6 received regulatory approval in China for use on domestic frequencies, but still requires one more critical license before it may be sold in the country, the official Xinhua news agency reported on Thursday.

Separately, Internet news website Daily Dot reported, citing sources, that Apple is set to launch two new iPads and release the next version of its Mac operating system at its next event on Oct. 21. Apple plans to unveil the sixth generation of its iPad and the third edition of the iPad mini, as well as its operating system OS X Yosemite, which has undergone a complete visual overhaul, the website said.

** MSCI INC, $49.07, +6.01 pct

The stock market indexes provider declared its first-ever quarterly dividend and more than doubled its stock repurchase program to $850 million from $300 million. The company said the buyback, which includes a $300 million accelerated share repurchase agreement with Goldman Sachs, and the dividend would return about $1 billion to shareholders by the end of 2016.

** MARCHEX INC, $4.185, -44.20 pct

The mobile advertising company cut its call-driven revenue forecast for fiscal 2014, hurt by a revision of fee model by its customer Allstate Corp, for the fourth quarter ending December. Marchex said that going forward, Allstate has decided to adopt fixed fee model instead of the current performance-based model. Marchex said it "does not believe it is in its best long-term interest to work under such an arrangement."

** REPROS THERAPEUTICS, $9.58, -25.62 pct

** LIPOCINE INC, $5.763, -23.16 pct

A U.S. Food and Drug Administration advisory panel voted to restrict the use of testosterone replacement therapies to people with medically related low testosterone, such as a genetic disorder or a tumor. If implemented, the restriction would prevent companies from marketing products for age-related low testosterone.

Repros and Lipocine's lead drugs are being tested to treat low testosterone levels.

** USEC INC, $1.97, -22.75 pct

The Uranium supplier said it expected to emerge from Chapter 11 restructuring on Sept. 30 under the name Centrus Energy Corp .

Equity holders will be left with about 5 percent of new shares, according to a reorganization plan confirmed by a bankruptcy court in Delaware.

USEC filed for bankruptcy in March, after struggling with weak prices for the enriched uranium it supplies to nuclear power plants.

** FOAMIX PHARMACEUTICALS LTD, $7.15, +19.17 pct

Shares of the pharmaceutical company soared as much as 83 percent to $11 in their debut, valuing the company at about $218.8 million. The offering of 6.7 million shares raised about $40.2 million.

** PROQR PHARMACEUTICALS BV, $17.1, +31.54 pct

The company's shares rose as much as 68 percent to $21.87 on their debut, valuing the company at about $458.5 million. The offering, which was priced at $13 per share, raised about $97.5 million.

** VIVUS INC, $4.7899, +23.45 pct

** AUXILIUM PHARMACEUTICALS, $31.04, -0.45 pct

The U.S. Food and Drug Administration approved a faster-acting version of Vivus' erectile dysfunction drug, Stendra. The drug, which was first approved in 2012, is sold by in the United States and Canada by Auxilium.

** SINOCOKING COAL & COKE CHEMICAL INDUSTRIES INC, $4.63, -24.35 pct

The coal processor and two other investors agreed to sell 2.8 million shares in an offering. The company said it expected aggregate gross proceeds from the sale of shares to be about $14.3 million. (http://1.usa.gov/1rf2MjU)

** SONY CORP, $17.91, -5.14 pct

The Japanese consumer electronics maker's U.S.-listed shares are on track for their worst week since November 2013. The company cut on Wednesday its profit forecast for the sixth time on CEO Kazuo Hirai's watch.

** EMCORE CORP, $5.49, +27.97 pct

The semiconductor-based products provider agreed to sell its space solar power business to an affiliate of private equity firm Veritas Capital for $150 million in cash.

Emcore said separately that its CEO, Hong Hou, had resigned in connection with the sale.

** PENN WEST PETROLEUM LTD, $7.61, +8.56 pct

The Canadian oil producer reported a profit for the second quarter compared with a year-earlier loss. The company also said it was strengthening its accounting practices after a review uncovered irregularities that forced to company to restate some of its prior results.

** RITE AID CORP, $5.395, -18.75 pct

The third largest U.S. drugstore chain cut its full-year profit forecast for the second time this year as lower margins from its pharmacy business continue to eat into earnings.

** PIER 1 IMPORTS INC, $12.55, -19.24 pct

The home furnishings and decor products importer cut its full-year earnings forecast to $0.95-$1.05 per share from $1.14-$1.22. The company also reported a weaker-than-expected profit for the second quarter, hurt by a decline in merchandise margins and lower-than-expected sales. Pier 1 said investments in its omni-channel strategy, which integrates online sales within stores, were hurting its near-term financial performance.

** HERCULES OFFSHORE INC, $2.7199, -10.53 pct

Cowen and Co cut its price target on the company's stock to $4 from $6. The median price target on the stock is $4.50. "The drop-off in demand has been more pronounced than we anticipated, and activity is set to stay depressed through the end of the hurricane season," Cowen and Co analysts wrote in a note.

** A10 NETWORKS INC, $10.1, -9.50 pct

The 180-day lockup period for the network equipment maker stock has ended, Seeking Alpha reported. The lockup period began on March 20with the company's IPO. (http://bit.ly/1qhtDpU)

** CONAGRA FOODS INC, $33.12, +3.47 pct

The maker of Hunt's Ketchup and Chef's Boyardee pastas reported a higher quarterly net income as sales increased in its commercial foods business.

** FLEXION THERAPEUTICS, $17.99, -7.17 pct

The U.S. Food and Drug Administration placed a hold on patient enrollment and dosing on the company's ongoing mid-stage trial on an experimental drug, codenamed FX006 - Flexion. The drug was being studied as a potential treatment for patients with osteoarthritis of the knee. The FDA indicated the clinical hold was due to single occurrence of infection in the injected knee joint of a patient.

** PDL BIOPHARMA INC, $7.78, -8.25 pct

The company's auditor Ernst & Young LLP said it would resign effective Sept. 11. PDL said it was surprised by the resignation as it did not have any disagreements with the auditor.

** ERICSSON, $13.23, +4.59 pct

The world's top mobile network equipment market will stop developing modems, it said, shutting a loss-making unit it took on after joint venture partner STMicroelectronics pulled out a year ago.

** YAHOO INC, $41.9001, -1.62 pct

Chinese e-commerce giant Alibaba Group Holding Ltd , in which Yahoo owns 23 percent stake, is set to sell some $22 billion of shares on Thursday, capping a two-week road show that drew frenzied interest from investors worldwide and may be the world's largest ever initial public offering.

Yahoo's stock was the most traded share on the Nasdaq on Thursday.

** DISCOVERY COMMUNICATIONS INC, $39.99, +2.90 pct

** HASBRO INC, $53.81, +0.07 pct

Discovery is seeking a controlling interest in The Hub, reducing partner and toymaker Hasbro's share of the children's cable TV network, the Wall Street Journal reported on Wednesday, citing sources familiar with the matter.

** PEABODY ENERGY CORP, $13.32, -6.13 pct

** ARCH COAL INC, $2.64, -5.71 pct

** ALPHA NATURAL RESOURCES INC, $3.17, -6.21 pct

** WALTER ENERGY INC, $3.08, -10.47 pct

Goldman Sachs lowered its outlook for U.S. thermal coal prices in 2015 to reflect coal plant retirements, rail issues, lower exports and higher levels of coal-to-gas switching. The brokerage also cut its rating on Peabody Energy's shares to "sell" from "neutral" and cut its price target on the stock to $13 from $15. Analysts cited challenging prices and margins for thermal coal in the United States and for metallurgical coal in Australia as reason for rating and price target cuts.

** EPR PROPERTIES, $52.3, -4.27 pct

The real estate investment trust said it planned to sell 3.2 million common shares, but it did not disclose the share price. The company plans to use the proceeds from the offering to reduce debt and to fund acquisitions and real-estate projects.

** CONTINENTAL RESOURCES INC, $69.47, -8.38 pct

The company boosted its 2014 capital budget on Wednesday, citing more-expensive oil well completion techniques in North Dakota's Bakken shale and a new project in Oklahoma. The company now expects to spend $4.55 billion this year, up from a previous forecast of $4.05 billion.

** TRINA SOLAR LTD, $14.89, +2.90 pct

** RENESOLA LTD, $3.47, +2.66 pct

** JINKOSOLAR HOLDING CO LTD, $33.24, +0.73 pct

** YINGLI GREEN ENERGY HOLDING CO LTD, $3.685, +0.96 pct

Jeferries & Co reiterated its positive outlook on solar stocks. "(Photo voltaic) demand appears to be indeed recovering with module manufacturers ramping up production and pricing turning more favorable," analysts wrote in a note.

** AIR PRODUCTS AND CHEMICALS INC, $133.37, +1.87 pct

The industrial gas supplier said it would reorganize into seven reporting segments. The company's stock rose as much as 5 percent to a record high of $137.45. (Compiled by Amrutha Penumudi in Bangalore; Editing by Kirti Pandey)

Canada's Small Business Job Credit Flaws

The proposed “Small Business Job Credit” has major structural flaws that, in many cases, give firms an incentive to fire workers and cut salaries. Like my colleague Stephen Gordon, I am no fan of this proposal.
  
This “EI cliff” kicks in fairly early, as a small business with as few as 12 employees can have EI contribution costs above $15,000 per year. Those firms then face a decision: Are they close enough to the edge of the cliff that they should cut staff or wages in order to obtain the tax credit. (Full disclosure: I own such a company that is on the “wrong” side of the cliff). The way this proposed system is designed is that the maximum benefit a company can receive from firing a worker and going under the $15,000 threshold far exceeds the maximum benefit a small business can receive from hiring an additional worker:

• The maximum benefit a firm can receive from firing a worker is $2234.04.
• The maximum benefit a firm can receive from hiring a worker is  $190.52.

Although this is sold as a job credit, there is no requirement that companies hire new workers. A firm can have fewer workers and a lower payroll than they had the year before and still receive a tax credit.

A larger problem with this proposal is the discontinuity that occurs when a firm reaches $15,000 in EI payments to the government. Once a firm crosses that threshold, it goes from collecting a tax credit of $2234.04 to collecting nothing.
 Mike Moffat Articles On Canadian Business
Source  

Broadbent Institute: Top 10% own 50% of Canada's wealth (Statistics Canada data on wealth)

Top 10% own 50% of Canada's wealth

The gap between people at the top of Canada's wealth pyramid and those at the bottom is widening and showing no signs of stopping, a major left-leaning think-tank says. 

In a report out Thursday, the Broadbent Institute looked at the most recent Statistics Canada data on wealth levels of Canadians. The data agency typically divides the country into five groups of 20% of the population, known as "quintiles" but the Broadbent Institute divided the number into deciles — 10 groups, each making up 10% of the population — for a new look at the data. 

Under that analysis, income looks to be distributed even more unevenly than previously thought. 

The report found that the top 10% of Canadians owned almost half — 47.9% — of all the assets in the country. 

The bottom half of the population, on the other hand, shares a total of 6% of the wealth. And the majority of Canadians own no financial assets at all, except any pensions they may have access to. 

Similar reports have made the claim that while the rich are, in fact, getting richer, the average person is also benefiting from wealth gains — albeit less extravagant ones. Statistics Canada's own data shows that the richest 20% of Canadians saw their net worth increase by 40.6% between 2005 and 2012 — more than any other group — while the net worth of the poorest 20 per cent was unchanged. 

The report adds fuel to the income inequality fire, noting that since 1999, all four of the poorest deciles in Canada (in other words, the poorest 40% of the country) have seen their share of total wealth decline. 

The share of total wealth for the fifth through the ninth deciles (the richest 40% to 90% of Canada) all saw their share of total wealth increase, by about one per cent each over the last decade and a half. 

The report also found that the wealth gap changes significantly across the country. The concentration of wealth for the top decile is highest in British Columbia at 56.2% and lowest in Atlantic Canada at 31.7%. 

And In all regions except Atlantic Canada, the bottom half of the population held less than 10% of all wealth.

Source