Debt in retirement: Over half of retired Canadians ... - Financial Post

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Markets: By the numbers

Monday?s global markets? close

Japan?s Nikkei
14,506.25 +33.67 +0.23%

China?s Shanghai
2,059.39 +19.90 +0.98%

Hong Kong?s Hang Seng
21,303.31 +26.03 +0.12%

Australia?s S&P/ASX 200
4,981.10 +7.20 +0.14%

More than half of all retired Canadians are carrying debt, with many stuck managing two or more payments a month, a new CIBC poll shows. Fifty-nine percent of retired Canadians surveyed said they currently hold debt, according to a new CIBC poll conducted by Harris/Decima. That compares to the national average of 71% of Canadians of all ages carrying debt. Almost one in five, or 19%, of those retirees holding debt say they?ve become more indebted over the past year. Thirty-six percent said their debt levels during that period had stayed the same. Credit cards accounted for 39% of the debt being carried by Canadians into their post-work years, while 30% said they have a line of credit. Sixteen percent said they are still paying down their mortgages and 14% are carrying loan debt. Thirty-seven percent of those surveyed said they are making two or more debt payments a month.

Related:?Canada?s housing boom has pushed one in 10 families deep in debt ? Bloomberg

Debt row: What happens when you can never pay it off ? Financial Post

Loblaw scoops up Shoppers in $12.4B ?transformational? deal

Loblaw Cos Ltd, Canada?s largest food retailer, will buy Shoppers Drug Mart Corp for $12.4 billion, as it faces increasing competition from Target Corp and Wal-Mart Stores Inc. By acquiring Canada?s biggest pharmacy chain, Loblaw said it would create a retail giant with more than $42 billion in revenue and gain access to the growing small-urban store sector. Loblaw?s offer of $61.54 in cash and stock represents a premium of 27% to Shoppers Drug Mart?s Friday closing on the Toronto Stock Exchange. The combination is expected to yield annual cost synergies of $300 million by the third year, Loblaw said in a statement on Monday. ?This transformational partnership changes the retail landscape in Canada,? Galen Weston, executive chairman of Loblaw, said in the statement. ?With scale and capability, we will be able to accelerate our momentum and strengthen our position in the increasingly competitive marketplace.?

Related:?Loblaw to test new health store concept ? Financial Post

Paradis out, Moore in as new federal industry minister

Amid a busy year for the wireless sector, look for a new face at the federal ministry that regulates much of the industry. Christian Paradis is out as head of Industry Canada and will be replaced by James Moore, formerly minister of Canadian Heritage, reports the Financial Post?s Christine Dobby. The ministry has been at the centre of much drama in the wireless industry in recent months with the announcement of a framework for an upcoming government auction of spectrum licences in March. Mr. Paradis, whose riding includes Lac-Megantic, will take over the post of Minister of International Development and Minister for La Francophonie.

Related:?Stephen Harper names eight new members to his cabinet ? National Post

CPP expansion would be too late for poor retired boomers: study

Voluntary pooled pensions touted by the federal government won?t close gaps in Canada?s retirement savings, and discussions among provincial finance ministers about reforming the Canada Pension Plan will also ?miss the mark? because they are thinking too small, according to a study published Monday by the Institute for Research on Public Policy. A large swathe of Canadians now over 40 are expected to experience ?a significant decline in their standard of living upon retirement,? says the study?s author, Michael Wolfson, and ?a half-century solution [to gradually enhance the CPP] won?t help them that much.? Mr. Wolfson, a former assistant chief statistician at Statistics Canada, proposes a series of changes to speed up the process while reducing the pain for younger workers ? such as raising the eligibility age for any new Canada Pension Plan benefits to between 68 and 70. He advocates phasing in increases to maximum pensionable earnings and the income replacement rate over 20 years ? rather than the nearly 50 years projected if the plan improvements are fully funded.

Related:?Equity markets boost CPP Fund, private market deals expected to cool ? Financial Post

Citigroup profit jumps

Citigroup Inc?reported a stronger-than-expected 26% rise in adjusted quarterly profit?as stronger home prices reduced losses on mortgages and trading revenue rebounded. Adjusted net income rose to US$3.89 billion, or US$1.25 per share, in the second quarter, from US$3.08 billion, or US$1.00 per share, a year earlier, the third-largest U.S. bank by assets said on Monday. The adjusted results excluded the positive impact of changes in the value of the company?s debt. Analysts on average had expected earnings of US$1.17 per share, excluding some items, according to Thomson Reuters I/B/E/S.

Related:?Wells Fargo profit rises 20% as it sets aside less for bad loans ? Reuters

JPMorgan profit jumps 31% a year after London Whale ? Reuters

U.S. retail sales rose, but not as much as expected

U.S. retail sales rose less than expected in June, adding to signs of a slowdown in economic growth that could argue against the Federal Reserve?s plan to start trimming its monetary stimulus later this year. The Commerce Department said on Monday retail sales increased 0.4% last month as demand for automobiles soared. However, sales of building materials fell. It was still the third straight month of gains in sales and followed a revised 0.5% rise in May. Economists polled by Reuters had forecast retail sales, which account for about 30% of consumer spending, rising 0.8% after a previously reported 0.6% gain in May.

More Bernanke bump for equities?

It?s been dubbed the Bernanke bump, and bump it was last week,?with?U.S. stock markets rallying to new highs and both Canadian equities and the loonie making major gains.?Even after a minor pullback in Canadian stocks on Friday, equities ended the week solidly on the plus side after a more dovish tone from U.S. Federal Reserve Chairman Ben Bernanke, who?made clear that while the Fed?s US$85-billion a month asset buying program might come to an end this year, the accommodative monetary policy currently in place is unlikely to end anytime soon.?Key, of course, is whether the party will continue, particularly with still-murky news emanating from China and other parts of the world, and with quarterly earnings season kicking into higher gear over the next few weeks.?Among additional economic numbers being released this week, investors will also be paying close attention to Bernanke?s semi-annual congressional testimony starting on Wednesday, as well as the Bank of Canada?s policy announcement and latest monetary policy report, also due out on Wednesday.

Here?s what to watch for this week:

Monday: A few Canadian economic reports to watch for on Monday, including May new motor vehicle sales at 8:30 am ET, followed by June existing home sales and the June MLS Home Price Index, both at 9 am ET. in the U.S., retail sales for June and the Empire State Manufacturing Survey for July will both be released at 8:30 am ET, followed by May business inventories figures at 10 am ET.

Tuesday: Canadian manufacturing sales and orders for May will be released at 8:30 am ET. In the U.S., ICSC same-store sales for the week ended July 13 will come out at 7:45 am ET, followed by June?s consumer price index at 8:30 am ET, May?s foreign purchases of U.S. securities at 9 am ET, June industrial production and capacity utilization figures at 9:15 am ET and finally the NAHB Housing Index for July at 10 am ET.

Wednesday: A big day for central bank-watchers on both sides of the border, with the Bank of Canada releasing details on its latest policy announcement as well as its monetary policy report at 10 am ET, and at the same time, Federal Reserve Chairman Ben Bernanke kicking off the start two days of semi-annual congressional testimony, starting with?the House of Representatives Financial Services Committee. Later in the afternoon the Fed will release its ?Beige Book? report on economic activity at 2 pm ET. On the economic data front, figures on Canadian international securities transactions for May and U.S. housing starts and building permits for June will all be released at 8:30 am ET.

Thursday: Day two of Bernanke?s semi-annual congressional testimony will begin at 10 am ET, this time with?the Senate Banking Committee.?Before then, Canadian figures on wholesale trade for May and U.S. weekly jobless claims figures will be released at 8:30 am ET, followed by the Philadelphia Fed Index for July and leading indicators for June at 10 am ET.

Friday: One economic report of note to be released on Friday: Canada?s Consumer Price Index for June, due out at 8:30 am ET. Friday also marks the kick-off of the?G20 Finance Ministers and Central Bankers meeting in Moscow.

Thanks for reading. We update this roundup throughout the work day, so please check back again for the latest news.?Sign up?for our Executive Summary email briefing to get the news delivered straight to your inbox. You can also follow?Financial Post?on?Twitter?and?Facebook.

Source: http://business.financialpost.com/2013/07/15/canada-debt-cibc/

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