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Cold, dead hands: Obama acts on violence but gun industry booming

The gun club

It’s fascinating to look at the U.S. arms industry and President Barack Obama’s attempts to curb gun violence.

The president is expected to unveil measures this morning that would see more background checks and prompt heightened enforcement.

Just yesterday, meanwhile, Smith & Wesson boosted its outlook for the year. And this morning, its shares are up by more than 8 per cent in premarket action.

The U.S. gun maker now expects annual revenue of between $650-million (U.S.) and $660-million, with earnings per share of $1.21 to $1.26.

That compares to its earlier forecasts of up to $635-million and $1.16.

It also boosted the outlook for its third-quarter results.

“The company indicated that the sell-through rate of its products at distribution has been stronger than originally anticipated, resulting in reduced distributor inventories of its firearms,” Smith & Wesson said.

“The company added that Adjusted National Instant Criminal Background Check System (NICS) data for the month of December, which serves as an indicator of consumer purchases, reflected strong growth versus December 2014.”

Markets slip again

Global markets are calmer so far, and mixed.

Tokyo’s Nikkei lost 0.4 per cent, and Hong Kong’s Hang Seng 0.7 per cent. The Shanghai composite, which plunged yesterday and kicked off the global rout, lost a further 0.3 per cent amid intervention by authorities.

But in Europe, London’s FTSE 100, Germany’s DAX and the Paris CAC 40 were up by between 0.3 per cent and 0.7 per cent by about 8:25 a.m. ET.

New York futures were down.

Oil shock bites deep

The oil shock is taking an ever-greater toll on Albertans.

As unemployment spikes in the province, so, too do consumer insolvencies, as the latest numbers from the Office of the Superintendent of Bankruptcy Canada show.

“Alberta has witnessed a clear increase in the number of consumer insolvency filings in recent months, now pushing the highest in about five years,” said BMO Nesbitt Burns senior economist Robert Kavcic.

Mr. Kavcic was referring to new statistics released yesterday that showed a surge in insolvencies filed by consumers.

Insolvencies come in two forms: All-out bankruptcy or what is known as a proposal, the latter an offer to creditors to change the terms of repayment.

In Alberta, home to Canada’s oil industry, the number of filings climbed by almost 15 per cent in the 12 months ending last October, rising to 9,516 from 8,287 in the previous 12-month period, the latest numbers show.

Bankruptcies rose 4.4 per cent, and proposals almost 25 per cent.

In October alone, insolvencies surged 27 per cent from a year earlier, with bankruptcies up 9.6 per cent and proposals up almost 44 per cent.

“Note that insolvencies are still running well shy of levels experienced during the Great Recession, but with the jobless rate moving quickly toward 2009 levels, more Alberta consumers (who also carry more debt relative to income than other provinces) could run into trouble this year,” Mr. Kavcic said.

“Note also that regions of Canada not negatively impacted by lower oil prices (especially B.C. and Ontario) are seeing stability on this front.”

Video: Bank of Canada's mix of 'hope and concern'

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