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Loonie up, markets look to Bank of Canada rate announcement, China growth data

TORONTO - The Canadian dollar advanced Monday at the start of a key week for the currency.

The loonie rose 0.12 of a cent to 88.8 cents US amid gains in Canadian wholesale sales during August.

Statistics Canada said those sales edged up 0.2 per cent to $53.1 billion. The agency said that gains in three subsectors, in particular the machinery, equipment and supplies subsector, more than offset declines elsewhere. Excluding the motor vehicle and parts subsector, which recorded the largest decline, wholesale sales rose one per cent.

The Bank of Canada delivers its next scheduled interest rate statement on Wednesday. The central bank is universally expected to leave its key rate unchanged at one per cent, where it has been for over four years, and leave its neutral bias intact.

The bank will also release its latest monetary policy report containing its latest estimates for growth and inflation.

Traders will also focus on the morning news conference by Bank of Canada governor Stephen Poloz.

Also on Wednesday, Statistics Canada delivers the August read on retail sales.

Financial markets were calm Monday morning following a very volatile week, mirroring a sharp selloff on equity markets amid worries about the state of the global economy. Markets have been particularly concerned about the eurozone and whether it could slip back into recession.

Central banks also figure largely in sentiment. The market volatility was occurring just days before the end of the Federal Reserve's key stimulus program, which involved the purchase of hundreds of billions of dollars of bonds, an exercise that kept long-term rates low and encouraged the huge rally on stock markets over the last few years.

Markets regained some equilibrium at the end of last week after St. Louis Federal Reserve Bank president James Bullard said that the Fed should consider delaying the end of quantitative easing program, given declining inflation expectations.

Investors are also looking for the European Central Bank to do more to reduce deflationary pressures and encourage growth.

Markets will focus on China this week for reassurance that the world's second-biggest economy can deliver strong growth. However, analysts' expectations for growth have narrowed over the last few months.

The consensus called for third quarter gross domestic product to fall to 7.2 per cent from a year ago, which would be a five year low.

Commodity prices were mixed with November crude up 27 cents to US$83.01 a barrel, December copper was three cents lower at US$2.98 a pound while December gold gained $7.20 to US$1,246.20 an ounce.\\

The Canadian Press


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Wholesale sales up 0.2 per cent to $53.1 billion in August: Statistics Canada

OTTAWA - Statistics Canada says wholesale sales increased 0.2 per cent to $53.1 billion in August.

The federal agency says gains in three subsectors — especially in machinery, equipment and supplies — more than offset declines elsewhere.

Economists had expected a loss of 0.2 per cent, according to Thomson Reuters.

Wholesale sales rose 1.0 per cent when the motor vehicle and parts subsector — which had the largest drop — was excluded.

In volume terms, wholesale sales edged up 0.1 per cent.

Statistics Canada says sales rose in four provinces in August, which together represented two-thirds of wholesale sales in Canada, with Ontario accounting for much of the gain.

The Canadian Press


Canadian Pacific ends talks with fellow railroad operator CSX about a possible deal

Canadian Pacific Railway says it has ended talks with U.S. counterpart CSX about a possible combination and plans no more discussions.

The railway operator did not say why it ended talks, but it did note in a brief statement that regulatory concerns appear to be a major deterrent for railroads considering combinations.

Several reports had surfaced recently that CSX Corp. had rejected a merger offer from Canadian Pacific Railway Ltd. Both railroads declined to comment on those reports, but CSX CEO Michael Ward said last week that the Surface Transportation Board, which regulates freight rail prices, would likely take a cautious approach to consolidation because there are only six Class I railroads in the U.S. and Canada.

Canadian Pacific said Monday it believed that regulatory approvals would be achievable for the right deal.

A CSX spokeswoman did not immediately return a call from The Associated Press seeking comment.

Besides Jacksonville, Florida-based CSX Corp., the other large railroads include Norfolk Southern, Union Pacific, BNSF and Canadian National.

Railroad lobbyists have told Congress that the industry is struggling to keep up with a sharp increase in freight rail demand created in part by an oil fracking boom and two years of unusually bountiful harvests. Shippers have complained that widespread delays in freight rail shipments are hurting an array of industries.

Canadian Pacific said Monday that a "pro-competition, customer-friendly" railway combination that also focuses on safety is a solution that could not be ignored on its merits by regulators. The railroad operator added that the industry's significant problems "will only worsen over time if solutions aren't put in place immediately."

CSX operates more than 21,000 miles of track in 23 Eastern states and two Canadian provinces.

CSX shares fell 4 per cent, or $1.36, to $32.50 about an hour before markets opened Monday. The stock had climbed about 18 per cent so far this year, as of Friday's close, while the Standard & Poor's 500 index rose about 2 per cent.

The Canadian Press


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Stocks to open lower: traders look for bottom, IBM delivers major disappointment

TORONTO - The Toronto stock market headed for a lower open Monday amid a big earnings disappointment from IBM Corp. and concern about the overall global economy.

The Canadian dollar gained 0.09 of a cent to 88.77 cents US.

Most U.S. futures were firmly in the red with the Dow Jones industrials down 94 points to 16,215, the Nasdaq futures added one point to 3,805 and the S&P 500 futures declined 4.9 points to 1,876.1.

IBM shares tumbled eight per cent in pre-market trading in New York after the company announced that its adjusted earnings were $3.68 per share, while revenue totalled $22.4 billion, missing expectations of analysts who predicted earnings of $4.32 per share on revenue of $23.39 billion. IBM also said that it will pay $1.5 billion to Globalfoundries in order to shed its costly chip division. It took a $4.7 billion charge for the third quarter.

In Canada, Valeant Pharmaceuticals International Inc. (TSX:VRX) reported US$275.4 million of quarterly net income, or 82 cents a share, and adjusted earnings of $718.8 million or $2.11. Analysts had estimated $2 per share of adjusted income and 64 cents in net earnings. Valeant is also raising its fourth-quarter adjusted profit estimate and its 2015 revenue growth forecast.

The expected negative showing on markets Monday comes as traders are looking for a bottom to a selloff that started last month and has pushed indexes well off the record highs set during September.

The TSX is down about nine per cent from its September highs, the Dow down five per cent and the S&P 500 has fallen 6.5 per cent amid worries that the eurozone could slip back into recession and a global economic downgrade by the International Monetary Fund.

There are also worries that growth in China is slowing. Investors will be particularly interested in the latest growth data coming out Tuesday from the world's second-biggest economy.

Some analysts predict the economy expanded 7.2 per cent from a year earlier, slowing from 7.5 per cent in the second quarter.

Central banks also figure largely in sentiment. The market selloff is happening just days before the end of the Federal Reserve's key stimulus program that involved the purchase of hundreds of billions of dollars of bonds, an exercise that kept long-term rates low and encouraged the huge rally on stock markets over the last few years.

Markets regained some equilibrium at the end of last week and chalked up significant gains Friday as buyers moved into stocks badly beaten down in price over the last few weeks and St. Louis Federal Reserve Bank president James Bullard said that the Fed should consider delaying the end of quantitative easing program, given declining inflation expectations.

The TSX ended last week flat, ending six straight weeks of losses while the Dow shed one per cent.

Investors are also looking for the European Central Bank to do more to reduce deflationary pressures and encourage growth.

In other corporate developments, Canadian Pacific Railway Ltd. (TSX:CP) confirmed Monday it held exploratory talks about a possible combination with U.S. railway CSX Corp. but those discussions have ended without a deal and no further talks are planned. The statement followed news reports more than a week ago that CSX had been approached by Canadian Pacific but rebuffed the overture.

Commodity prices were mixed with November crude off six cents to US$82.81 a barrel, December copper was three cents lower at US$2.98 a pound while December gold gained $7.20 to US$1,246.20 an ounce.

The Canadian Press


IBM to pay $1.5 billion to Globalfoundries in order to shed profit-eating chip division

NEW YORK, N.Y. - IBM will pay $1.5 billion to Globalfoundries in order to shed its costly chip division.

IBM Director of Research John E. Kelly III said in an interview Monday that handing over control of the semiconductor operations will allow it to grow faster, while IBM continues to invest in and expand its chip research.

IBM will make payments to the chipmaker over three years, but it took a $4.7 billion charge for the third quarter when it reported earnings Monday.

The company fell short of Wall Street profit expectations and revenue slid 4 per cent, sending shares down 8 per cent before the opening bell.

The tech sector is under heavy pressure in early trading, with IBM, Microsoft Corp., Intel Corp. and Cisco all moving lower.

Privately held Globalfoundries will get IBM's global commercial semiconductor technology business, including intellectual property and technologies related to IBM Microelectronics. It also gets IBM's semiconductor manufacturing operations and plants in East Fishkill, New York and Essex Junction, Vermont, as well as access to thousands of patents and IBM's commercial microelectronics business.

Globalfoundries said that it plans to employ substantially all IBM workers at the East Fishkill and Essex Junction plants, except for a team of semiconductor server group employees who will stay with IBM.

Under the agreement, Globalfoundries will become IBM's exclusive server processor semiconductor technology provider for 22 nanometer (nm), 14nm and 10nm semiconductors for the next 10 years. Globalfoundries was spun off from Advanced Micro Devices in 2009 to handle chip production.

IBM said handing over the chip division will allow it to concentrate on fundamental semiconductor research and the development of future cloud, mobile, big data analytics, and secure transaction-optimized systems.

The transaction is expected to close next year.

On Monday, IBM reported that its adjusted earnings from continuing operations were $3.68 per share, while revenue totalled $22.4 billion. The performance missed the expectations of analysts polled by FactSet, who predicted earnings of $4.32 per share on revenue of $23.39 billion.

Shares of International Business Machines Corp., based in Armonk, fell $14.35 to $167.70 in premarket trading.

The Canadian Press


Small biz lagging in Canada, but has potential over next 5 years: CIBC study

TORONTO - Small business activity in Canada is lagging the economy as a whole, but it has the potential to pick up and grow in the next five years, according to a new report from CIBC World Markets.

It says that currency fluctuations have less impact on small and medium-sized businesses and notes that a meaningful drop in the Canadian dollar below the U.S. greenback has helped exports.

"Just as small and medium enterprises are less responsive to a rise in the value of the loonie, they are just as insensitive to Canadian dollar weakness," said Benjamin Tall, the bank's deputy chief economist, who co-authored the report.

The Canadian dollar is currently worth about 89 cents US, down from about 97 cents US a year ago.

The report identifies Alberta as the most favourable place in Canada for a small business to flourish as it has the strongest projected growth, while also possessing good demographics and immigration trends.

"Those latter characteristics offer a steady stream of future entrepreneurs and workers to drive operations in tomorrow's small and medium enterprises,"

However, Alberta does lack an advantage in export orientation, "with a concentration in Alberta's outbound flows in larger, energy-focused firms," he added.

British Columbia and Ontario ranked second and third, respectively, with a three-way tie for fourth between Saskatchewan, Manitoba and Quebec.

B.C.'s strong growth prospects, solid urban concentration and labour dynamics suggest that smaller enterprises can exploit emerging opportunities, Tal said.

While small firms in Ontario are well integrated into larger firms' manufacturing supply chains, the province isn't aligned to industries that are poised to see the highest growth, he notes.

"It will need to work on its weaker readings on debt management to give firms the capital they need to expand toward industries with brighter prospects."

CIBC estimates that small businesses activity accounts for about 40 per cent of private-sector gross domestic product in Canada.

Since the 2008-09 recession, small business overall has been the little engine that could, more than pulling its weight when its comes to growth and employment, the report noted.

For example, since the recession, the study found that the number of small businesses with between 20 and 49 employees has risen close to 18 per cent, while those with 10 to 19 employees is up by 12.5 per cent and those with less than 10 employees up by 10.3 per cent.

"While economic conditions have deteriorated for them recently, small businesses have been contributing a greater than normal share of hiring recently," Tal said

"That's partly because hiring in the rest of the economy has been muted, but small businesses have also been adding to their workforce at a greater rate than they have historically."

The Canadian Press


In blow to Japan's Abe, trade and justice ministers both resign over election fund allegations

TOKYO - Japan's trade and justice ministers resigned Monday after allegations they misused campaign funds in the biggest setback so far for Prime Minister Shinzo Abe's conservative administration.

The two ministers were among five women Abe named to his Cabinet in a reshuffle early last month. Their resignations may help to control the damage to his relatively high popularity ratings, but are a blow to efforts to promote women in politics and business as part of economic revival policies.

Yuko Obuchi, daughter of a former prime minister and a rising star in the ruling Liberal Democratic Party, resigned early Monday as trade minister, saying she needed to focus on an investigation into discrepancies in accounting for election funds. She did not acknowledge any wrongdoing.

Justice Minister Midori Matsushima resigned after the opposition Democratic Party of Japan filed a criminal complaint against her over distribution of hand-held fans or "uchiwa." Matsushima also faces complaints over using parliament-provided housing while keeping security guards at her private residence in downtown Tokyo.

Speaking to reporters shortly after he accepted Matsushima's resignation, a sombre Abe told reporters he was also responsible because he appointed the two women to his Cabinet.

"I deeply apologize to the public," Abe said.

Within hours, Abe named replacements, choosing Yoichi Miyazawa, 64, a former finance ministry official as trade minister. Miyazawa, from Hiroshima, served as a secretary years ago to his uncle, former Prime Minister Kiichi Miyazawa.

Abe chose Yoko Kamikawa, 61, a female lawmaker who has worked on demographic issues, as the new justice minister.

Abe's first term in office, in 2006-2007, was marred by gaffes and resignations by his Cabinet ministers and he stepped down, citing ill health. His current term has been smoother, particularly in the first year as the stock market soared along with his popularity ratings.

Pressure for faster action on economic reforms has risen, however, as the recovery faltered following a 3 percentage point increase in the sales tax in April.

Political funding scandals are a chronic problem in Japan and key factor behind the revolving-door politics of recent decades.

"These rules are in place precisely because vote-buying using gifts used to be very common in Japan and still is according to some accounts in the rural areas," said Koichi Nakano, a politics professor at Tokyo's Sophia University.

The types of gifts and sums of money at the centre of the latest allegations are relatively trivial compared with the record of previous governments. In one case, a stash of gold bullion pulled from an LDP lawmaker's offices. But the rules are well-known, and possible violations by a minister of justice did not set well, Nakano said.

Two other female Cabinet members known as Abe's close allies on the right have been criticized for suspected ties with racist groups, marring his efforts to encourage Japan to accept more women in leadership positions.

Abe's broad gender agenda includes pushing companies to promote more women, expanding spaces for day care, and other measures intended to help encourage improved opportunities for Japan's highly educated but underemployed female workforce. Such moves are vital for economic growth as Japan's population declines and ages.

Obuchi, who as trade minister was overseeing the cleanup and decommissioning of the wrecked Fukushima Dai-ichi nuclear power plant, said a thorough investigation into the problems with her campaign funds would interfere with her duties.

"I apologize for not being able to make any contributions as a member of the Abe Cabinet in achieving key policy goals," Obuchi said.

The Cabinet resignations are the first for Abe since he took office in late 2012.

The opposition DPJ lost power to Abe's conservative Liberal Democratic Party in late 2012 and is seeking whatever leverage it can against the LDP's overwhelming parliamentary majority.

Hence the focus on such issues as presents of leeks, baby clothes, theatre tickets and fans by lawmakers to their supporters. The "uchiwa" distributed by Matsushima reportedly cost a mere 80 yen (75 cents) each, but are a possible violation of the election law.

Matsushima contends they should be allowed as campaign "leaflets."

Analysts said Obuchi's troubles stem from a campaign apparatus set up decades ago when her grandfather and then her father were in office.

She apologized for funding irregularities, though she said she had found no evidence of alleged personal use of campaign funds that were paid to a company run by a relative. But discrepancies in the accounting for several years have raised a "major doubt," she said.

"This is my own fault and I will focus on investigating so that I can regain trust from my supporters as soon as possible," Obuchi said.

The Canadian Press


As oilpatch reporting season begins, crude price drop top of mind

CALGARY - The recent rout in oil prices will likely be top of mind for investors as Canada's top oilpatch players release their third-quarter results over the next few weeks.

The steep drop in the key U.S. benchmark crude — to about US$80 a barrel from around US$95 just a month ago — won't be evident in companies' financial reports for the quarter ended Sept. 30.

But analysts and investors will be paying keen attention to the mood of top brass on quarterly conference calls and looking for signals about how oil market volatility may affect future plans, said Lanny Pendill, an analyst with Edward Jones in St. Louis, Mo.

Right now, oil and gas producers are hammering out their budgets for 2015.

"As a whole, we're probably at the price point where I think many of the companies are going to approach the budget season with a little more caution," he said.

"Just the tone and the overall impression that they leave with us ... I think will be key. So we will certainly be focusing on the go-forward comments more than anything."

Projects under construction in northern Alberta should be in good shape, but prospects are less certain for some that haven't yet received a final board arrpoval, said Pendill. In recent months, Canadian units of France's Total and Norway's Statoil have opted not to proceed with their Joslyn and Corner oilsands projects, respectively.

Cenovus Energy Inc. (TSX:CVE), one of Canada's top oilsands producers, will be reporting on Thursday. That company has developed a reputation as being one of the lowest-cost producers in the industry, and Pendill expects it to continue to thrive in the current oil price environment. Supply costs for its projects range between US$35 and US$65 a barrel, meaning even its most pricey projects can generate a decent profit.

Cenovus extracts bitumen using steam-assisted gravity drainage, or SAGD, technology. Steam is pumped underground through a well, where it softens the tarry bitumen enough that it can be drawn to the surface through a second pipe.

Steam-driven, or in-situ, projects are generally much more cost effective than the more traditional surface mining operations. Since most of the remaining oilsands resource in northern Alberta is too deep to be mined, most future projects will employ in-situ techniques.

Husky Energy Inc. (TSX:HSE), also on deck to report Thursday, is close to starting the first phase of its Sunrise SAGD project, part of a partnership with BP. The company has signalled that costs would be higher than its most recent estimate of C$2.7 billion, but hasn't yet said by how much.

Oilsands producers learned some hard lessons during the financial crisis of 2008 and 2009, said Pendill. The oilpatch saw a spate of high-profile project deferrals as crude prices cratered to levels that were at times less than half of what they are today.

Those companies have since done a better job managing their debt. They've also become reluctant to undertake multibillion-dollar megaprojects. Instead, companies like Cenovus and Suncor Energy Inc. (TSX:SU) are building SAGD projects in bite-sized increments, essentially copying and pasting the design with each new phase. Miners, like Canadian Natural Resources Ltd. (TSX:CNQ) and Suncor, are boosting output through "debottlenecking" — squeezing more crude out of existing projects by tweaking equipment, rather than building something new from scratch.

Oilsands projects, many operated by deep-pocketed multinational giants, are planned with a time horizon of 50 years or more in mind, said Sonny Mottahed, CEO and managing partner at Black Spruce Merchant Capital in Calgary.

The industry pays attention to the long-term supply-demand trends in oil prices, not the reactions of traders on any given day, he said.

"Generally speaking, I don't think that there's anybody out there that believes that there is a true fundamental reason for the sell-off in the commodity," he said.

It's a gloomier story for smaller firms elsewhere in the oilpatch, said Mottahed. Lower prices are going to hit cash flow, which is bad news for companies that need to recycle capital back into their business quickly in order to keep drilling.

Oilsands producers have been cushioned from the crude price plunge on a couple of fronts. Currency fluctuations have been to the benefit of Canada's oilpatch, as the loonie has weakened against the U.S. dollar. And the price gap between heavy and light oil has narrowed as more Canadian heavy crude has been able to find its way to market by pipeline, rail and even tanker, Scotiabank commodity market specialist Patricia Mohr noted in a report last week.

While U.S. light oil production surges from shale deposits in Texas and North Dakota, the country's imports of heavier crudes continues to climb, Mohr wrote in her latest Commodity Price Index. Canada has supplied 43 per cent of U.S. heavy crude imports so far in 2014 and further gains are likely to the U.S. Gulf Coast in 2015.

Follow @LaurenKrugel on Twitter

The Canadian Press


Stock markets in for further swings, investors try to gauge depth of downturn

TORONTO - Stock markets are likely in for more volatility this week as traders wonder if sharp gains at the end of last week signal an end to what would be a relatively mild retracement — defined as a temporary reversal in the direction of a stock's price that goes against the prevailing trend — or a full blown correction. That sort of downdraft carves at least 10 per cent from market highs.

"Neither we nor anyone else knows exactly how deep (the declines) will run, (or) how long it will take," said David Wolf, portfolio manager at Fidelity Investments.

"What we do know is that this has happened before in markets, it will happen again in markets and in the meantime, the key message is don’t panic."

The TSX ended last week with two back-to-back triple-digit advances for a flat performance on the week after six straight weeks of losses, while the Dow industrials declined one per cent, adding to five weeks of losses.

North American markets have nose-dived since hitting recent highs in September on worries that the U.S. economy was the only bright spot in an otherwise grim global economy and that European powerhouse Germany could slip into recession. Uncertainties also persist over the impending end of the Federal Reserve's key stimulus program of massive bond purchases.

Markets started sensing capitulation signals at the middle of last week at a point where the TSX was down about 12 per cent from its September highs — two percentage points more than the threshold that marks correction territory — while the Dow industrials had fallen about eight per cent and the S&P 500 more than nine per cent.

The TSX is now down nine per cent from the September highs.

At the same time, there seems to be general agreement that the correction was long overdue. New York markets hadn't seen a correction in about three years while Toronto valuations, particularly in the energy sector, were looking stretched.

"Corrections are part of the normal market environment," Wolf said.

"It’s quite understandable that they elicit a fearful, even panicky reaction among many which often leads to a three or four per cent drop turning into a six, eight, 10 per cent drop. But from our lens, unlike say in 2008 . . . in this case the global economy isn’t doing great but it’s still growing, led by the U.S."

Wolf is optimistic and thinks his view will be borne out when third-quarter U.S. gross domestic product data is released next week. He thinks GDP could rise at an annualized pace of about three per cent.

"Not bad. That comes after a reasonably strong second quarter, (but) you have other parts of the world frankly not looking so hot," he added.

One major bit of fallout from the sharp market losses has been that the slew of corporate earnings in the U.S. over the last couple of weeks has failed to move markets one way or another.

"Most people haven’t been focused on that," said Wolf.

"I think the lack of reaction to earnings . . . is very emblematic of sentiment in the market. (Bad news) will eventually run its course and there’s enough good news out there, at least in our opinion, that it will eventually gain the upper hand again."

The Canadian corporate earnings season also starts to move into high gear this week with railways Canadian National (TSX:CNR) and Canadian Pacific (TSX:CP) reporting Tuesday. Energy giants Cenovus (TSX:CVE) and Husky (TSX:HSE) post results Thursday.

Meanwhile, Canadian investors will look to the Bank of Canada's scheduled announcement on interest rates on Wednesday. No one expects the central bank to hike its trend-setting rate until sometime late next year from one per cent, where it's been since September 2010. But markets will be looking to the announcement, and subsequent news conference by bank governor Stephen Poloz, for any hints about the timing of future hikes.

The Canadian Press


Brad Pitt's WWII drama 'Fury' blows away 'Gone Girl' to top weekend box office

LOS ANGELES, Calif. - The bloody World War II drama "Fury" blew past "Gone Girl" at theatres this weekend.

"Gone Girl" was tops at the box office for two weeks before Brad Pitt and his rag-tag group of tank mates in "Fury" blasted the film to second place. Sony's "Fury" captured $23.5 million in ticket sales during its opening weekend, according to studio estimates Sunday. Fox's "Gone Girl" followed with $17.8 million.

The week's top two films are R-rated adult dramas, followed by two PG family films.

"The fall movie season is all about making the transition from PG-13 world of summer to the R-rated, edgier world of the fall and awards season," said Paul Dergarabedian, senior media analyst for box-office tracker Rentrak.

The animated Fox feature "The Book of Life" opened in third place with $17 million, followed by Disney's "Alexander and the Terrible, Horrible, No Good, Very Bad Day" with $12 million.

"Were now in full adult movie-going season and we'll see a lot more adult-skewing fare," said Fox distribution chief Chris Aronson, who added that the colorful "Book of Life" suits any audience.

Another new film rounds out the top five: Relativity's Nicholas Sparks romance "The Best of Me," starring Michelle Monaghan and James Marsden, debuted with $10.2 million.

"Birdman," the Alejandro Gonzalez Inarritu drama starring Michael Keaton, opened in just four theatres and boasted a per-screen average of $103, 750. It opens in additional locations next week.

Overall box office is up almost 25 per cent from the same weekend last year, Dergarabedian said, and the strong fall showing at cinemas is making up for a year-to-date box-office deficit that dropped from 6 per cent to 4 per cent in the last month.

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Estimated ticket sales for Friday through Sunday at U.S. and Canadian theatres, according to Rentrak. Where available, the latest international numbers are also included. Final domestic figures will be released Monday.

1. "Fury," $23.5 million.

2. "Gone Girl," $17.8 million ($20.2 million international).

3. "The Book of Life," $17 million ($8.6 million international).

4. "Alexander and the Terrible, Horrible, No Good, Very Bad Day," $12 million ($1.3 million international).

5. "The Best of Me," $10.2 million ($1.1 million international).

6. "Dracula Untold," $9.9 million ($22.5 million international).

7. "The Judge," $7.94 million ($6.5 million international).

8. "Annabelle," $7.92 million ($19.2 million international).

9. "The Equalizer," $5.4 million ($8 million international).

10. "The Maze Runner," $4.5 million ($17.1 million international).

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Estimated ticket sales for Friday through Sunday at international theatres (excluding the U.S. and Canada), according to Rentrak:

1. "Guardians of the Galaxy," $23.1 million.

2. "Dracula Untold," $22.5 million.

3. "Gone Girl," $20.2 million.

4. "Teenage Mutant Ninja Turtles," $20 million.

5. "Annabelle," $19. 2 million.

6. "The Maze Runner," $17.1 million.

7. "Breakup Buddies," $10 million.

8. "The Book of Life," $8.6 million.

9. "The Equalizer," $8 million.

10. "The Judge," $6.5 million.

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Universal and Focus are owned by NBC Universal, a unit of Comcast Corp.; Sony, Columbia, Sony Screen Gems and Sony Pictures Classics are units of Sony Corp.; Paramount is owned by Viacom Inc.; Disney, Pixar and Marvel are owned by The Walt Disney Co.; Miramax is owned by Filmyard Holdings LLC; 20th Century Fox and Fox Searchlight are owned by 21st Century Fox; Warner Bros. and New Line are units of Time Warner Inc.; MGM is owned by a group of former creditors including Highland Capital, Anchorage Advisors and Carl Icahn; Lionsgate is owned by Lions Gate Entertainment Corp.; IFC is owned by AMC Networks Inc.; Rogue is owned by Relativity Media LLC.

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Follow AP Entertainment Writer Sandy Cohen at www.twitter.com/APSandy .

The Canadian Press


Hack the border: Business asks government to enlist whiz kids to end delays

WASHINGTON - Frustrated by costly delays at the Canada-U.S. border, the business community is urging governments to seek solutions from private-sector whiz kids.

The national governments are being pressed to adopt a model popularized by high-tech startups during the original dot.com boom in the 1990s: gather a bunch of software engineers in one room, give them a problem to solve, and promise a prize. They call it a hackathon.

Leading business groups are requesting that kind of hackathon for the border, unsatisfied by the pace of progress following years of government efforts to reduce wait times.

It's been raised repeatedly lately with public officials by the Canadian American Business Council, which counts six dozen companies and an advisory board that includes the two countries' ambassadors to each other.

The group's Maryscott Greenwood took it up after meeting with White House officials this summer, when they explained how the hackathon model had been used in U.S. disaster preparedness.

She suggested that kind of approach might help the Beyond the Border program, the delay-fighting initiative announced by Prime Minister Stephen Harper and President Barack Obama in 2011.

"The vision is three years old. There's been some progress made on it. But industry is really impatient about the pace of the progress," said Greenwood, senior adviser to the business council.

"So the idea here really is, 'How do we get some more accomplishments under our belt? How do we force some faster progress?'"

She brought it up again at a binational border conference in Ottawa last month, a regulatory co-operation meeting in Washington this month, and in conversations with cabinet ministers — U.S. Homeland Security boss Jeh Johnson, and Canada's Industry Minister James Moore.

One official at the Privy Council Office wouldn't announce whether the idea was under consideration; he only said there would be recommendations made to the countries' leaders later this year as part of the governments' Beyond the Border Action Plan implementation plan.

It's not like the idea would be revolutionary. Governments in both countries have already begun using the startup-culture approach to solving problems.

Even this week in Ottawa, some high-profile tech firms will be at a Tuesday event on Parliament Hill, attended by Treasury Board President Tony Clement and U.S. ambassador Bruce Heyman, where they'll chat about common problems — including access to capital, intellectual-property rights, regulatory harmonization and updating NAFTA's job categories.

The U.S. government has enthusiastically taken up the hackathon model since the hurricane Sandy disaster.

The White House convened one such event and announced more than 30 disaster-response ideas, inspired by problems people had encountered during the 2012 storm on the East Coast.

Ideas included Google opening its Crisis Map to crowdsourcing — so the public might share emergency information, like which gas stations still have fuel.

The home-rental app Airbnb also launched a project, aimed at pre-identifying homes that could shelter displaced people and emergency workers during a crisis.

Then the disastrous rollout of the Obamacare health-exchange website last fall only bolstered the U.S. administration's determination to modernize its procurement procedures.

The idea of a prize for improving the border came from someone at the powerful U.S. Chamber of Commerce, who told Greenwood how rewards had been used elsewhere to attract participants.

Adam Schlosser is the director of the lobby group's centre for global regulatory co-operation and, through that, is involved in Canada-U.S. trade files.

He also happens to work on digital trade — which has exposed him to plenty of innovative projects around the world involving the high-tech sector and governments, including in Mexico, Chile, Vietnam and Indonesia.

"Say, (for example), how do you get water to different citizens of a developing country, to make sure the water's safe?" Schlosser said, offering one problem a hack-a-thon might tackle.

"Put 30 engineers in a room. Say, 'solve it.' Give them a day or two, and give them a prize."

He said that approach offers twin benefits: One, government money winds up going to the most innovative companies. And, at the same time, a domestic-policy challenge might get solved.

The challenge at the Canada-U.S. border involves delays worsened by post 9-11 security measures, which slowed down the movement of goods and people.

According to different economic estimates, including one paper by the Fraser Institute think-tank, the delays cost the Canadian economy anywhere from one to two per cent of GDP.

Schlosser said there are plenty of objectives a border hackathon might tackle, including simplified inspection processes; a new order of priorities for what should be inspected; where best to allocate border personnel; and using information technology to help vehicles cross at the most convenient spot.

"It's definitely going to be discussed more in the coming weeks and months," he said.

"And you get more people talking about it, you get more momentum, and it just takes one or two big thinkers to say, 'You know what? Let's put it into action.' So it's definitely not a far-fetched idea, in that it could happen in the next six months to a year."

The Canadian Press


Indonesia's incoming president gets boost after meeting rival, but tough challenges await

JAKARTA, Indonesia - Rebooting a slowing economy in a nation of 250 million where inequality is rising, a looming decision on raising fuel prices and vulnerability to any U.S. interest rate hikes would be enough to tax any incoming president.

But Indonesia's Joko "Jokowi" Widodo, who takes office Monday, must also find a way to work with a powerful and well-funded opposition that could block moves to address the challenges holding back the country's rise as an emerging market powerhouse.

At least eight heads of state and U.S. Secretary of State John Kerry will attend the inauguration, a sign of Indonesia's regional and international clout. After years of dictatorship, the country was convulsed by unrest in the late 1990s and turned to democracy amid the upheaval of the Asian financial crisis. It is the biggest economy in Southeast Asia and home to more Muslims than any other nation.

In a positive sign for the minority government that Jokowi will lead, the head of the opposition and losing presidential candidate Prabowo Subianto met with him Friday for the first time since the polls, finally conceding defeat and offering qualified support. Many analysts still fear that Subianto could play an obstructive role, but the meeting offered at least some hope that the rancour of the bitterly contested polls might be subsiding.

Jokowi is taking over from Susilo Bambang Yudhoyono, who has overseen consolidation of Indonesia's young democracy and steady economic growth, albeit now at just over 5 per cent, its slowest pace in five years. Slowing demand in China for Indonesia's natural resources has dulled exports. High interest rates to rein in a yawning current account deficit have also taken the steam out of the economy.

The deficit makes Indonesia highly vulnerable to the hikes expected next year in what are record-low U.S. interest rates, which could suck funds from the country, pressurizing the rupiah and spooking the markets. Jokowi will also have to quickly take steps to fix the country's massive infrastructure problems and tackle corruption, both of which hurt efforts to attract the foreign investment needed to create jobs.

The first major test of his reform credentials will be one of the hardest: how much to cut subsidies on fuel that unless trimmed will cost the government more than $30 billion this year. The subsidies keep fuel cheap, but drain government funds that could be spent more productively on building bridges, schools or hospitals, for example.

Cutting subsidies means prices rise at the pump. That leads to follow-on hikes to the cost of basic goods and bus fares that hit the poor directly and will stoke anger at the super wealthy minority who have benefited most from Indonesia's growth as well as Jokowi. But economists, political commentators and investors all say he has no choice if he wants to show economic responsibility and free up funds.

"There are many unpopular policies, including raising fuel prices, that have to be taken, although that may lead to anger and resistance from the opposition coalition in the first year," said Sofyan Wanandi, a high-profile businessman and chairman of the Indonesian Employers Association. "But there is no pleasant-tasting medicine to fix the economy. If we don't take it, our economy will be destroyed."

Jokowi doesn't need parliamentary approval to cut the subsidies, but he is likely to be criticized by the opposition and sections of the media. Previous hikes in fuel prices have led to street demonstrations and riots, and were a factor in the downfall of former dictator Suharto.

Jokowi, a former furniture seller, won 54 per cent of the votes in the July elections after a grassroots campaign that stressed his ordinariness, honesty and record of hard work and uncorrupt service as Jakarta governor. He is the seventh Indonesian president, and the only one that hasn't been drawn from the country's political, economic and military elite.

After the inauguration, Jakarta is planning a street celebration and live music concert at which it is rumoured Jokowi, who is a guitarist and heavy metal fan, will play.

Subianto, who has been trying to become president for more than 10 years, has a poor human rights record and close ties to the elite that governed the country during the Suharto years. Many democracy activists have expressed fears that he would go to any lengths, including undemocratic ones, to secure the presidency.

His refusal to concede defeat and unsuccessful legal campaign to get the vote overturned had only added to those concerns.

Last month, legislators loyal to Subianto voted to scrap direct elections for local officials, triggering anger at what many regarded as a grave setback to democracy that would return power to the mostly corrupt political parties. Jokowi rose to national prominence after being directly elected a regional governor.

The meeting Friday served to allay those concerns, though much remains uncertain.

It took place at the house of Subianto's father in southern Jakarta.

"I told him that I will ask my friends and supporters to support him and the government he will lead," Subianto said. "If there are things that we feel unprofitable, we will not hesitate to express criticism."

Jokowi has yet to name his Cabinet. He could offer places to opposition members, broadening his support.

Economic professor Fransiskus Xaverius Sugiyanto said he thought it likely that the government could function even with such a large opposition, though its members would try and block legislation that was harmful to their business interests.

"As long as the government's policies and strategies are really based on the people's needs and interests, I am sure he will survive for the next five years," he said.

The Canadian Press


Harper says he's optimistic about commodities, despite the ups and downs

OTTAWA - As Prime Minister Stephen Harper offered soothing words to those battered by the recent tumult in the Canadian commodity sector, there were already signs Friday that consumers are finding relief in the falling price of oil.

Speaking in Sault Ste. Marie, Ont., Harper acknowledged the turmoil roiling commodity markets, but offered an optimistic long-term outlook, noting some Canadian mining and forestry companies have had success of late.

"Obviously, there are ups and downs in those industries, but I think many of them, of course, have been prospering in the last few years," Harper said.

"As we have seen a growth in demand across the world, and I actually think notwithstanding the ups and downs, the long-term trajectory of increased demand for commodities is actually going to be there and going to help areas like this."

But as motorists fill up on cheaper gas, economists warn lower crude prices are likely to damage the overall economic health of a country as dependent on oil production as Canada.

Tumbling oil prices, which have seen an even steeper slide this month, have already started to impact Canada's inflation rate, said CIBC World Markets economist Nick Exarhos.

The annual rate edged down in September to two per cent, a dip of 0.1 percentage points from the previous month, according to the consumer price index released Friday by Statistics Canada. The inflationary impact of October's oil-price plunge has yet to be seen.

Meanwhile, Canada's core inflation rate, which is followed by the Bank of Canada and excludes volatile items such as energy-related goods, didn't budge from its 2.1 per cent level.

"We saw some of the effects of weaker energy prices spilling over to the (standard) consumer price index," Exarhos said.

"So we're already seeing some of the impacts of the recent developments in the oil market, which has seen quite dramatic moves in energy prices."

Exarhos said the Bank of Canada would likely stay neutral, since it follows the movements of the core rate, which is unaffected by energy prices. September's 2.1 per cent core rate is not far off the central bank's two per cent target.

Bank of Canada governor Stephen Poloz is widely expected next week to hold the key interest rate at one per cent, where it has been for more than four years. The central bank is scheduled to make its next rate announcement Wednesday, when it will also releases its latest monetary policy report.

BMO chief economist Douglas Porter wrote in a note Friday that he expects the central bank to shift the focus away from domestic issues like the consumer price index and sluggish labour markets. Instead, Porter said he expects the bank's report to focus on weak global growth and rising uncertainty.

Porter also wrote that he expected core inflation to continue moving along at just over 2.0 per cent.

Looking at September, he said the 1.5 per cent monthly increase in meat prices — and an 11.5 per cent rise year-over-year — drove the annual core-inflation rate up by 0.3 percentage points alone.

Meat prices, he added, have experienced their fastest rise since the mid-1980s.

In other categories, the Statcan report said shelter costs climbed 2.7 per cent in September on a year-over-year basis, an increase led by a 16.2 per cent gain in natural gas prices. Food prices also rose 2.7 per cent in September, which followed an increase of 2.2 per cent the previous month.

Prices increased in all provinces, with Ontario and Alberta seeing the biggest increases of 2.6 per cent each.

On a seasonally adjusted basis, the consumer price index increased 0.2 per cent in September after rising 0.1 per cent in August.

Follow @AndyBlatchford on Twitter

The Canadian Press


Most actively traded companies on the TSX

TORONTO - Some of the most active companies traded Friday on the Toronto Stock Exchange:

Toronto Stock Exchange (14,227.68, up 174.71 points):

Lachlan Star Ltd. (TSX:LSA). Miner. Down 2.5 cents, or 50 per cent, to 2.5 cents on 11.6 million shares.

Talisman Energy Inc. (TSX:TLM). Oil and gas. Down two cents, or 0.27 per cent, to $7.36 on 7.6 million shares.

Canadian Natural Resources Ltd. (TSX:CNQ). Oil and gas. Up $1.08, or 2.87 per cent, to $38.65 on 6.9 million shares.

Spartan Energy Corp. (TSX:SPE). Oil and gas. Up 16 cents, or 5.30 per cent, to $3.18 on 5.5 million shares.

Suncor Energy Inc. (TSX:SU). Oil and gas. Up 59 cents, or 1.59 per cent, to $37.73 on 5.5 million shares.

Whitecap Resources Inc. (TSX:WCP). Oil and gas. Up 19 cents, or 1.29 per cent, to $14.89 on 5.4 million shares.

Companies reporting major news:

Inovalis Real Estate Investment Trust (TSX:INO.UN). Real estate. Down 35 cents, or 3.65 per cent, to $9.25 on 350,067 shares. The real estate trust is acquiring two office properties in Paris and a surrounding suburb for $61 million.

The Canadian Press




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