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Daily Pulse

Canada

Protests against a natural gas pipeline are crippling Canada’s railways – key economic arteries in the sprawling, trade-dependent nation – and prompting cries of “insanity” and “ecoterrorism” from business leaders. Canadian National Railway Co., the country’s largest rail provider, has canceled 400 trains in the past week and said on Thursday that it will shut down its operations in Eastern Canada, possibly leading to temporary layoffs. Via Rail, which operates passenger train service across the nation, is canceling all services effective immediately. The cancellations mark the most severe fallout yet from protests that have spread across Canada in recent days, disrupting shipments of oil, grain, propane, lumber and consumer goods. Environmental and indigenous-rights activists are blockading rail lines, ports and other infrastructure to show solidarity with portions of the Wet’suwet’en Nation that are protesting construction of TC Energy Corp.’s planned C$6.6 billion ($5 billion) Coastal GasLink pipeline through their territory in British Columbia.

United-States

The U.S. Federal Trade Commission just ordered major technology companies to fork over details on waves of small acquisitions made during the last decade. A more sizable deal is also seen as a target for the regulator: Google’s $1.1 billion purchase of mapping app Waze. The FTC quickly approved the 2013 transaction, but antitrust experts say the regulator will take a second look because it combined two popular digital mapping services under the same corporate roof, eliminated a fast-growing Google rival and solidified the internet giant’s grip on valuable data. Alphabet Inc.’s Google has acquired dozens of startups over the years to add technical talent, fill product holes, gather new users and accumulate more data. Few of these transactions rang traditional antitrust alarm bells, but in aggregate they helped the company build the western world’s largest online search, digital mapping and advertising businesses. Global watchdogs are now investigating whether this dominance is harming business customers and consumers. Reassessing past acquisitions is part of this effort, and the Waze deal is a clear candidate.

Europe

Germany entered 2020 with a flatlining economy and manufacturers in distress, leaving it ill prepared for continued trade uncertainty and the new coronavirus threat. Europe’s largest economy has been battered by multiple forces that have turned it from a growth engine to one of the region’s weakest performers. Expansion last year was just 0.6% and 2020 may be little better. The euro-area economy grew 1.2% in 2019, though the pace was just 0.1% in the fourth quarter. On top of global factors, Germany has had to deal with domestic issues from struggling lenders to climate-related upheaval in the car industry. More recently, politics has added to the litany of negative headlines, with the resignation of Angela Merkel’s heir-apparent as chancellor. One bright spot in has been the labor market – in Germany and the broader euro area. Figures on Friday showed employment growth in the 19-nation bloc accelerated to 0.3% at the end of 2019.

Asia

Japan’s economy likely suffered its biggest contraction since 2014 at the end of last year leaving it in a vulnerable state, as fallout from China’s viral outbreak threatens to turn a one-quarter-slump into a recession. A sharp drop in consumer spending after a sales tax hike is seen as the main culprit behind an annualized 3.8% contraction estimated by economists. The slide would be the worst for Japan since the second quarter of 2014, when a previous tax increase prompted the economy to shrink by 7.4%.

The author

Michel Doucet

Michel Doucet

Vice-President and Portfolio Manager
After obtaining a Bachelor's degree from the Faculty of Social Sciences at the Université du Québec in Montréal and his Master’s degree, Michel Doucet began his career as a junior economist at the National Bank head office in Montreal. In 1992 he joined the institutional equities and fixed income group at Lévesque Beaubien Geoffrion as an economist and market analyst. Over the years, he has led various projects related to the North American and international economies as well as Canadian public finances. In 1996, the team of institutional economists to which he belongs was ranked first in Canada by Brendan Wood International. In August 1997, Mr. Doucet joined the personal services division of Lévesque Beaubien Geoffrion where he served as an economist, fixed income market analyst and vice president. In 2004, he joined the Desjardins Securities full service team as Vice President. He now occupies the roles of fixed income strategist, economist and portfolio manager. He manages the Securities Portfolio Advisory Group, advisor marketing and distribution of financial planning and insurance.