Every week at the Current we bring you the world’s biggest business stories. This week: oil prices slump, eurozone slows, Manchester United post huge revenue, US sales figures disappoint, a soft landing is possible for the Canadian housing market, Hydro One profits rise.
On Thursday oil prices dropped following reports that as much as 100 million barrels of crude oil is being held in ships in floating storage. All told the current oil glut amounts to a record 3 billion barrels. West Texas intermediate fell 3.1% to below $42 a barrel amid predictions that prices could tumble to below $30 a barrel next year. Production continues to outstrip demand, but prices could rise if the global economy recovers faster than predicted or violence in oil producing regions (like Syria) spreads.
The eurozone economy has slowed to 0.3% in the 3rd quarter of 2015, down from 0.4% growth in the previous quarter. The ECB is mooted to increase its stimulus program to boost inflation and increase growth. The Spanish economy grew by 0.8%, Italy by 0.2% and France increased growth from 0% to 0.3% while Germany fell from 0.4% to 0.3%. If the ECB does increase its bond buying program the euro could drop in value, which would likely stimulate exports and manufacturing.
Manchester United, an English soccer team in the Premier League, has posted revenue of over £500m (Over 1bn CAD). The revenue is boosted by a £750m (over $1.5bn CAD) sponsorship deal with Adidas over 10 seasons.
According to the Commerce Department, retail sales rose by a meager 0.1% last month. Economists had predicted a rise of 0.3%. Sales at car dealerships dropped by 0.5% after increasing 1.4% in September. Online shopping continues to grow as online sales rose by 7.1% compared to October.
Despite warnings that the Canadian housing market is overvalued in certain key areas, the Bank of Canada has insisted that a soft landing – a controlled market correction – will take place. Carolyn Wilkins, the senior deputy governor, has also insisted that the Bank of Canada’s 0.5% rate is appropriate.
Hydro One Ltd reported an 11% rise in 3rd quarter profits on Friday just a week after going public on the Toronto Stock Exchange. Hydro One is 855 owned by the Ontario government and serves over 1.2 million people. Ontario made $1.66 billion from the IPO of Hydro One and claims that by going public the company will be more efficient and customer focussed. Its share prices have risen 7% since trading started on November 5th.
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