Every week we bring you the world’s biggest business, currency, and travel stories. This week: Yahoo sells its core business to Verizon, iPhone sales have fallen, turbulence in the airline industry, BC levels foreign buyers tax, gold prices are up, Canada’s GDP falls in May, and manufacturing also fell.
Yahoo sale is on the Verizon
Yahoo, struggling in recent years, has agreed to sell its core business to Verizon, who paid $4.4 billion for AOL (another ageing internet giant) last year. Between 2012 and 2015 under the tenure of Marissa Mayer, the company’s earnings have fallen by 44%.
Global iPhone sales are continuing to fall. Second quarter sales are down 15% year on year, and are set to continue to drop. Quarterly profit is also down 27% to $7.8 billion.
Turbulence in the airline industry
RyanAir, easyJet, Air France-KLM and Lufthansa have all warned that the industry could struggle this year. Brexit, French air traffic control strike, a wave of terrorism in Europe and a failed coup in Turkey have hit the tourism and airline industry hard. On the positive side this could translate into lower airfare for passengers.
BC Foreign Buyers Tax
On Monday the BC government introduced a new property tax aimed at cooling the overheating real estate market. Foreign nationals buying property in Vancouver will have to pay a 15% transfer tax as of August 2nd. Currently all BC property owners pay 1% on the first $200,000 of their purchase, 2% on the next $1.8 million, and 3% on anything above $3 million. Foreign nationals spent over $1 billion between June 10th and July 14th of this year. The tax is aimed at making housing more affordable for Vancouver residents and will generate additional revenue to be reinvested in housing and rental support programs.
Gold prices have increased 25% this year and could rise even further. Global uncertainty and low interest rates have encouraged investors to move their funds into gold which is traditionally seen as a safe haven. Brexit, the US election, and continued uncertainty about commodity prices are seen as the primary reasons behind global uncertainty.
Canada’s GDP Shrank
In May Canada’s economy shrank by 0.6%, the largest contraction in over 7 years. Alberta’s wildfires are the primary culprit for the poor performance. The oil and gas sector, already hurt by low energy prices, fell 22% in May due to the fires.
Manufacturing output down
Most experts view the poor economic performance in May as an anomaly, but others point to worrying manufacturing statistics as a sign of greater issues. Manufacturing was down 2.4% in May, the largest drop in over 7 years.
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