That sound you hear, like the whistling of a boiling kettle? It’s the air being sucked out of Saint Patrick’s Day by Globe and Mail columnist John Doyle who has used his pulpit in the morning fishwrap to look down his nose at anyone who might have planned on wishing someone else a grand day today. I’m sure those of you who have followed this morning note in recent years have been looking forward to my annual lecture on the origins of Saint Patrick’s Day and the True History of the British Evangelist whose fame is the result of a lengthy and successful PR campaign by the Catholic Church following a Tour of Duty in Ireland. I’ll forgo that discussion, however, in favour of a simple exhortation to wear green today, if you like the colour; to raise a glass of Guinness and holler “slainte,” if you happen to like the dark beer, and to say “top o’ the mornin’” in a silly accent if you think it will make someone else smile. Doyle begs his readers several times “don’t get me started.” Doyle, don’t start. Oh, and enjoy the craic today – it looks like a fine mornin’ already.
The yen strengthened to its highest level against the U.S. dollar since the Second World War this morning, an important turn of events that we’ll have to explain clearly to our viewers. Why does it matter? A soaring yen increases the price of everything Japan exports abroad making the country’s goods less attractive to buyers elsewhere in the world and potentially worsening the economic impact on the country stemming from the earthquake and tsunami. Why is the yen rallying when concern over a country’ economic outlook tends to send its currency lower? Speculation that Japanese banks, insurers, multinational companies and major investors will repatriate assets from abroad has traders anticipating a surge in demand for the Japanese currency. Why does it matter to Canada? Japan is the world’s third biggest economy, biggest importer of corn, second-biggest importer of copper ore in Asia and one of the biggest importers of aluminum on the planet. The list goes on. There are calls now for the G-7 to consider intervening in the currency markets to drive the yen lower. The Canadian finance department just confirmed for us that a teleconference is scheduled for later today.
The talk of intervention helped Japanese stocks recover some of their losses and sent European stocks higher – in fact, European markets are awash in green. Ha, Doyle! Didja hear that? Awash in green! Anyhow, the so-called risk-off trade is expected to determine the direction of markets in North American trade as investors try to quantify the impact of a worsening nuclear crisis in Japan, escalating violence in Bahrain and the European sovereign debt crisis on economic growth and corporate earnings.
We have some compelling earnings stories today, not least of which is Lululemon (LLL-T 78.73 0.00 0.00%). The Canadian athletic-wear company blew past earnings expectations, revenue forecasts and same-store sales estimates as its expansion into the US continues apace. Cost pressures are weighing, though. We’ll speak with company CEO Christine Day on The Close at 4:00 p.m. ET
Fedex (FDX-N 85.28 0.00 0.00%), the world’s biggest cargo airline, also reported this morning, unveiling a 3 percent decline in earnings from the same quarter a year ago. The company also warned that higher oil prices could hurt 2011 profit. The warning comes less than 24 hours after Air Canada (AC.B-T 2.72 0.00 0.00%) said it was cutting capacity this year due to soaring fuel costs.
Bloomberg reports that Groupon has held talks with banks about an IPO that would value the company at $25 billion US. That’s a lot of dough. The story will renew the speculation over what companies like Facebook and Twitter should be valued at.
Lots of economic data today including a read of Canadian wholesale sales and international securities transactions. We’ll also focus on U.S. consumer price inflation at 8:30 a.m. ET. We’ll also see initial jobless claims, industrial production and capacity utilization, leading indicators and the Philly Fed.
Slainte! (And me mum’s a Ryan!)
