The U.S.Federal Reserve has raised its benchmark interest rate.

Rates rising

The U.S.Federal Reserve has raised its benchmark interest rate.

Canadian biz this week

Five things to watch for in the Canadian business world in the coming week:

Reading the BoC tea leaves

Deputy Bank of Canada governor Lynn Patterson will speak before the Investment Industry Association of Canada on interest-rate benchmarks on Monday. The central bank has raised its key interest rate target three times since last summer and is expected to raise the trend-setting rate again later this year.

Flying the cheaper skies

Swoop Airlines hosts a media day before the launch of its ultra low-cost service on Tuesday at Hamilton International Airport. The launch of WestJet's ultra-low cost carrier has been a source of contention between the airline and its pilots.

Latest inflation numbers

Statistics Canada releases the consumer price index for May on Friday. In April, the annual inflation rate cooled slightly to 2.2 per cent to remain just above the two per cent midpoint of the Bank of Canada's range.

BlackBerry momentum?

Analysts will be watching to see if BlackBerry Ltd. can replicate its most recently quarterly performance when it reveals first-quarter results on Friday. The former smartphone manufacturer reported higher revenue and adjusted earnings in the fourth-quarter than expected, which CEO John Chen attributed to his strategy to focus on software.

Wholesale trade

Statistics Canada releases wholesale trade figures for April on Thursday. Figures from the previous month showed that wholesale sales rose 1.1 per cent to $62.8 billion, more than offsetting a decline in February.


Loonie tumbles against USD

The Canadian loonie continued to fall Friday, shedding nearly three-quarters of a U.S. cent, for a weekly loss of more than a U.S. penny.

The Canadian dollar averaged 75.89 cents US, down 0.73 of a U.S. cent. It shed a total of 1.26 U.S. cents over the week.

"Today it's more U.S. strength versus Canadian weakness," said Allan Small, a senior investment adviser at HollisWealth.

When there's fear and uncertainty, people flock to the U.S. dollar, he said, adding that part of the current uncertainty is the appearance of a brewing global trade war.

"Tit for tat, tariff for tariff, etc., etc.," he said.

Surprisingly low manufacturing figures released Friday didn't help the loonie.

Factory sales dropped 1.3 per cent to $56.2 billion in April, according to Statistics Canada, as sales in the petroleum and coal products and transportation equipment industries dropped. Economists had expected an increase of 0.6 per cent, according to Thomson Reuters Eikon.

Weak economic data factors into whether the Bank of Canada will decide to raise its benchmark interest rate at its next meeting.

"Maybe July is not a slam dunk," said Small.

The U.S. Federal Reserve recently raised its rate for the second time this year and indicated it will do so a total of four times before the end of 2018.

That big discrepancy in interest rates makes the U.S. dollar more attractive for investors.

A strong greenback is bad for commodities, Small said, as both the price of oil and gold slipped, dragging down Canada's main index.

The S&P/TSX composite index fell 14.54 points to 16,314.42. Stocks in the energy sector lost on average 1.51 per cent of their worth, while those in the gold sector lost 1.2 per cent.

The July crude contract fell US$1.83 to US$65.06 per barrel and the August gold contract plummeted US$29.80 to US$1,278.50 an ounce.

In New York, the Dow Jones industrial average lost 84.83 points to 25,090.48. The S&P 500 index shed 2.83 points to 2,779.66 and the Nasdaq composite index declined by 14.66 points to 7,746.38.

Elsewhere in commodities, the July natural gas contract added about six cents to US$3.02 per mmBTU and the July copper contract retreated about eight cents to roughly US$3.14 a pound.

Manufacturing sales fall

Statistics Canada says manufacturing sales fell an unexpected 1.3 per cent to $56.2 billion in April as sales in the petroleum and coal products and transportation equipment industries fell.

Economists had expected an increase of 0.6 per cent, according to Thomson Reuters Eikon.

The move lower followed two consecutive monthly increases.

Statistics Canada says sales fell in 10 of 21 industries, representing 49.6 per cent of the manufacturing sector.

However, excluding the petroleum and coal products and transportation equipment industries, manufacturing sales rose 0.4 per cent.

In volume terms, manufacturing sales fell 1.9 per cent.


Canada Goose expands

Canada Goose Holdings Inc. announced it plans to open three new stores in North America this fall as part of its retail expansion plan.

The stores will be in Short Hills, N.J., Montreal and Vancouver.

The locations are expected to open ahead of the 2018 holiday shopping season.

The store announcement came as the luxury parka maker reported a fourth-quarter profit of $8.1 million or seven cents per diluted share compared with a loss of $23.4 million or 23 cents per diluted share a year ago.

Revenue for the quarter ended March 31 totalled $124.8 million, up from $51.1 million in the same quarter a year earlier.

For its full financial year, Canada Goose says it earned $96.1 million or 86 per diluted share on $591.2 million in revenue. That compared with a profit of $21.0 million or 21 cents per share on $403.8 million in revenue in the previous year.

Rogers cuts digital jobs

Rogers Communications is cutting the size of its digital content and publishing team by about one-third.

The Toronto-based company says about 75 full-time employees have been laid off, reducing the size of that team to about 150 people.

Rogers says the job cuts reflects the "headwinds" faced by its industry, which has been dealing with a years-long change in consumer reading habits and a loss in advertising revenue at most established publishers.

The Toronto-based company has one of Canada's biggest media businesses, active in print and digital publishing, radio broadcasting and television including the Sportsnet specialty channels.

However, Rogers Media is much smaller than the company's wireless and cable divisions.

It says that all of its current publishing brands will continue and the company remains committed to producing high-quality editorial content.

Fox vs Disney: who wins?

Competing bids from Comcast and Disney for the bulk of Twenty-First Century Fox come as the media landscape changes and companies get more involved in both creating and distributing content.

X-Men and other movies from Fox's studios would help beef up Disney's upcoming streaming service. Comcast, already a major cable operator, would get a larger portfolio of cable channels including FX and National Geographic.

Comcast's $65 billion cash bid Wednesday is higher than what many analysts were expecting and tops Disney's all-stock offer, valued at $52.5 billion when it was made in December.

GBH Insights analyst Dan Ives said Comcast's price "speaks to Comcast really wanting these key assets." Disney is expected to make a counter offer.

Each bid raises different regulatory concerns, though this week's approval of AT&T's takeover of Time Warner signals that regulators might have a hard time stopping mega-mergers.

Here's how the companies would match up:


Fox's film studios, with "Avatar," X-Men, the Fantastic Four and Deadpool, would pair well with Disney's studios. This includes reuniting the Marvel franchises X-Men and the Avengers, as some of those characters were already in Fox's hands when Disney bought Marvel in 2009. Disney also has the Muppets, Pixar and "Star Wars."

In fact, Fox and Disney might pair too well, as far as regulatory concerns go. BTIG analyst Richard Greenfield estimates the combined studios make up 45 per cent of worldwide box office revenue. A larger studio could use its power to keep its movies in more theatres longer and squeeze out rival movies.

Comcast's Universal movie business has such franchises as "Jurassic Park." The Fox properties would expand Comcast's reach, though the company would have just 25 per cent of the box office with Fox added, according to figures from Box Office Mojo.


Fox's TV productions include "The Americans," ''This Is Us," ''Modern Family," and "The Simpsons." Its networks include FX Networks and National Geographic. The Fox businesses would pair well with Disney channels like ABC, the Disney Channel and Freeform. "Modern Family" already airs on ABC.

Comcast owns NBCUniversal, including the NBC broadcast network, CNBC and USA. Comcast's studios produce "Chicago Fire" and "Will & Grace," both airing on NBC.

Comcast might run into regulatory problems because the cable operator would control a larger portfolio of content along with its distribution. However, a federal judge on Tuesday approved a similar attempt by DirecTV owner AT&T to buy Time Warner. The judge rejected the government's fears that the AT&T deal could lead to higher prices for consumers or hinder online alternatives from getting content.

Regardless of which company prevails in buying Fox, the Fox television network and some cable channels including Fox News will stay with media mogul Rupert Murdoch.


Disney's deal includes getting Fox's regional sports network, which shows hometown sports in several cities including New York, Los Angeles, Dallas, Cleveland, Detroit and Kansas City. Those networks would complement Disney's nationally focused ESPN. Disney recently launched ESPN Plus, a separate streaming service with more local offerings. That service could benefit from Fox's regional offerings.

Comcast already has similar regional networks through NBC Sports, including ones in Boston, Chicago and the San Francisco Bay area. Getting the Fox networks would expand Comcast's territorial reach.


Whichever company prevails will control streaming service Hulu. Currently, Comcast, Disney and Fox each has a 30 per cent stake, with Time Warner owning the other 10 per cent. With Fox's share, either Comcast or Disney would end up with a controlling 60 per cent stake.

Disney already plans an entertainment-focused streaming service in 2019. If Disney prevails, it could combine that with Hulu or keep them as separate services.

If Comcast prevails, Disney's service could be less appealing, as it wouldn't have Fox video. Comcast doesn't currently have similar streaming ambitions and wouldn't benefit as much from the Fox video.


Internationally, Fox's cable and international TV businesses are part of the offerings. That's key for Comcast, which has a limited overseas presence.

Disney and Comcast had already been at battle in the U.K. over Sky, an operator of television channels. Fox has a 39 per cent stake in Sky and has been trying to buy outright, with the intention of selling the full company to Disney as part of that deal. U.K. regulators have given the OK to that offer if Fox sells Sky News. Regulators there also have cleared Comcast's $30.7 billion offer for the 61 per cent of Sky that Murdoch doesn't own.

Other international networks include Fox Networks Group International, Star India, Tata Sky and Endemol Shine Group.


Comcast and Disney have made extensive use of their portfolios at their theme parks in California, Florida and overseas. Disney, for instance, is expanding its attractions related to "Star Wars." On the flip side, Disney turned its Pirates of the Caribbean ride into a major movie franchise. Comcast's Universal Studios has attractions based on Universal's "Fast and the Furious" franchise.

Either company would be able to expand its opportunities with Fox, though the theme parks have historically been able to reach licensing deals with rival studios. Universal, for instance, has rides based on Fox's "The Simpsons" and Warner Bros.' "Harry Potter." Disney has licensed Fox's "Avatar" for its "Pandora" park within Walt Disney World.

U.S. Fed raises rates

UPDATE 11:38 a.m.

The Federal Reserve has raised its benchmark interest rate for the second time this year and signalled that it may step up its pace of rate increases because of solid U.S. economic growth and rising inflation.

The Fed now foresees four rate hikes this year, up from the three it had previously forecast.

The central bank raised its key short-term rate Wednesday by a modest quarter-point to a still-low range of 1.75 per cent to 2 per cent. The move reflects the economy's resilience, the job market's strength and inflation that's finally nearing the Fed's target level. The action means consumers and businesses will face higher loan rates over time.

It was the Fed's seventh rate increase since it began tightening credit in 2015, and it followed an increase in March this year.

The Fed announcement helped resolved a debate in financial markets over whether the Fed under Jerome Powell, who succeeded Janet Yellen as chairman in February, might see a need to signal a possible acceleration in rate hikes. The statement the Fed issued Wednesday after its latest policy meeting ended suggested that he does.

ORIGINAL 11:26 a.m.

The U.S. Federal Reserve has raised its short-term federal fund rate by 0.25 points to a range of 1.75 to 2 per cent.

More coming.

New rewards program

The Royal Bank of Canada and WestJet are partnering on a new loyalty platform.

The platform called Ampli will include merchant offers and rewards for members who spend with the bank and fly with the airline.

The bank plans to release it by the end of the year and says it will announce additional merchant partners in the coming months.

RBC President and CEO Dave McKay said in a statement that the companies were rolling out the platform because the Canadian loyalty landscape is "ready for disruption" and they want to help consumers save money.

The platform builds on the previous WestJet RBC World Elite MasterCard program partnership.

The new loyalty platform comes months after one of WestJet's biggest rivals, Air Canada, announced it is pulling out of Aimia Inc.'s Aeroplan program to build its own loyalty system.

Major markets up

Major North American indices made small gains ahead of today's Federal Reserve meeting where it's expected the Fed will raise its benchmark interest rate.

The Toronto Stock Exchange's S&P/TSX composite index was up 12.74 points to 16,301.72, after 90 minutes of trading.

In New York, the Dow Jones industrial average was up 7.99 points to 25,328.72. The S&P 500 index was up 2.62 points to 2,789.47 and the Nasdaq composite index was up 27.72 points to 7,731.51.

The Canadian dollar was trading at 77.06 cents US, up from Tuesday's average value of 76.90 cents US.

The July crude contract was up 11 cents to US$66.47 per barrel and the July natural gas contract was up four cents to US$2.98 per mmBTU.

The August gold contract was up 90 cents to US$1300.30 an ounce and the July copper contract was down one cent to US$3.26 a pound.

Self-driving shuttles coming

Auto parts supplier Magna International Inc. is partnering with a Michigan startup to retrofit self-driving shuttles for service in the United States.

Ontario-based Magna will retrofit May Mobility's low-speed self-driving electric transit vehicles from the chassis up for an initial deployment on June 26 in Detroit.

Magna will update the vehicles with custom doors, a panoramic moon roof, drive-by-wire technology and sensor integration at its custom build centre in Troy, Mich.

May Mobility, based in Ann Arbor, Mich., will upgrade the vehicles with its proprietary technology that would allow them to operate safely and reliably in urban and residential environments.

The new partnership announced Wednesday will create an undisclosed number of self-driving shuttles that can increase to hundreds and eventually thousands as demand increases.

Magna has partnered with several companies to develop and manufacture self-driving systems.

AltaGas shifts strategy

AltaGas Ltd. says it has an agreement to sell 35 per cent of its interest in a B.C. hydroelectric operation for $922 million but will remain the majority owner of the power generation facilities.

The Northwest British Columbia Hydro Electric Facilities are in Tahltan First Nation territory.

They include three operating hydroelectric power generation plants that sell their output to BC Hydro under separate 60-year purchase agreements.

The buyer is a joint venture company indirectly owned by Axium Infrastructure Inc. and Manulife Financial Corp.

Calgary-based AltaGas says the sale is part of a larger funding strategy related to a previously announced acquisition.

Suncor's severe shortfall

Suncor Energy Inc. says a fuel supply shortage that left some of its Petro-Canada stations in the four western provinces with no gasoline to pump should clear up in the next few days.

Stations began running out of fuel about two weeks ago in Edmonton and Calgary, followed by some Petro-Canada outlets in Saskatchewan, Manitoba and B.C.

Spokeswoman Nicole Fisher says Suncor's 142,000 barrel-a-day Edmonton refinery was restarted last week after being shut down for regular spring maintenance and the company is working to resupply the stations.

She says the shortage of gasoline and other fuels in Western Canada was made worse because other suppliers were also off line, preventing Petro-Canada stations from using alternative sources.

She says she doesn't know how many stations were without fuel supplies.

Fisher says Suncor is apologizing to customers who were inconvenienced by the outages, adding the last time it had such severe shortfall was two years ago in the wake of the Fort McMurray wildfire.

"As they ran out, we've been working to replenish but some of them haven't been replenished," she said. "We do know this is an inconvenience for our customers and we do apologize."

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