U.S. stocks careened toward the worst week of 2019 as investors fretted over Donald Trump’s escalation of his trade war with China. Treasuries rose, while the yen strengthened.
The S&P 500 fell for a fifth straight day, putting the measure on track for its steepest weekly loss since December’s sell-off. Trade angst recaptured center stage after Trump said Thursday he’d slap more tariffs on Chinese goods, adding to worries that the spat could derail the global economy. China vowed it would counter the threat. Stocks were already under pressure after investors groused that the first Federal Reserve rate cut in a decade didn’t come with assurances of further easing.
Ten-year Treasury yields held near the lowest level since 2016 after the July U.S. jobs report did little little to alter views on the economy and path for future rate policy. The dollar was lower against most major currencies. West Texas crude clawed back some of its 8% slide on Thursday.
“The Fed is largely easing policy because of the possibility that trade tensions will impact the global economy and the feedback into the U.S. economy would be negative and that calculus appears to be correct,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “Yesterday’s announcement of an escalation of trade tensions is the key risk to markets now that the Fed is easing monetary policy and it bears watching how far the administration will push tariffs that ultimately impact the consumer, which up to this point has been very resilient.”
The jobs report Friday added another piece to an already large puzzle that includes the Fed, earnings and trade. While China has yet to offer details on what measures it would take, the sudden escalation of the spat has put markets in a spin in an already action-packed week of corporate earnings and central-bank meetings. The developments come after the Federal Reserve chief cast doubt about a long cycle of interest-rate cuts, provoking the president’s ire and disappointing many investors.
Elsewhere, most European government bonds rose alongside the common currency. The pound drifted after a by-election loss reduced U.K. Prime Minister Boris Johnson’s House of Commons majority to a single seat.
Here are the main moves in markets (all sizes and scopes are on a closing basis):
The S&P 500 Index dipped 1.1% as of 1:31 p.m. New York time, hitting the lowest in five weeks.The Dow Jones Industrial Average decreased 1% to the lowest in more than six weeks.The Nasdaq Composite Index declined 1.8%, hitting the lowest in five weeks.The Stoxx Europe 600 Index decreased 2.5%, the lowest in more than six weeks.
The Bloomberg Dollar Spot Index fell 0.1%.The Japanese yen gained 0.7% to 106.47 per dollar, the strongest in 16 months.The euro rose 0.2% to 1.1112 per dollar.
The yield on 10-year Treasuries fell four basis points to 1.86%.The yield on two-year Treasuries decreased one basis point to 1.72%.Germany’s 10-year yield dipped five basis points to -0.495%, hitting the lowest on record with its sixth straight decline.
Gold was steady at $1,445.57 an ounce.West Texas Intermediate crude gained 3.2% to $55.69 a barrel.
All passengers safe as Montreal-bound Air Transat flight makes emergency stop in Paris
More than 300 passengers resumed their journey to Montreal Sunday after their Air Transat flight from Italy had to make an emergency landing in France.
The airline says flight TS571 took off from Venice Saturday but had to make an emergency stop at Paris-Charles de Gaulle airport due to a technical problem with a floor heating panel.
Spokeswoman Debbie Cabana says the landing went smoothly and the health of the passengers was not compromised.
The 310 passengers spent the night in Paris and departed for Montreal Sunday morning in a different aircraft.
Cabana says the passengers will be eligible for compensation.
2 Stocks to Help You Canadians Retire Wealthy
Young Canadian investors are facing retirement challenges.
Finding a good full-time job right out of college or university is not as easy as it was 20 years ago, as companies are less willing to spend the time and money to train people and prefer to hire more workers on contract. The gig economy has also expanded, meaning that more people are effectively self-employed, with no benefits.
When a full-time opportunity emerges, the benefits can vary significantly. Defined-benefit pension plans are becoming rare, and while defined-contribution plans can be generous, they shift risk from the company to the employee, as the payouts on retirement depend on the performance of the fund.
This is forcing Canadians to take more control of their retirement planning.
One popular strategy is to own top dividend stocks inside a self-directed RRSP and use the distributions to buy additional shares. Over time, the compounding process can create a substantial retirement fund and you can use the contributions to reduce your taxable income today.
Let’s take a look at two stocks that might be interesting RRSP picks right now.
Nutrien is the planet’s largest supplier of potash. It’s also a leading provider of nitrogen and phosphate. These commodities are all essential crop nutrients used by farmers to improve food production on their land.
Wholesale potash orders are negotiated each year with countries worldwide. China and India often set the bar for prices based on the agreements they secure with Nutrien’s marketing company Canpotex, and its competitors. Potash prices have improved in the past two years after experiencing an extended downturn.
Demand and global shipments are increasing, a trend that’s expected to continue as the world population is forecast to grow nearly 30% in the next 30 years.
Nutrien also has a retail division that sells seed and crop protection products to farmers. The business is growing through strategic acquisitions and Nutrien is investing in the development of digital solutions to help its customers manage their overall operations.
The fertilizer market undergo through periods of volatility, as has occurred in 2019 with record rainfall during the U.S. planting season affecting orders, but the long-term outlook for Nutrien is positive.
The company raised the dividend twice in the past year and the stock appears oversold today. Investors who buy now can pick up a 3.7% yield.
Bank of Nova Scotia
The primary focus is on the Pacific Alliance countries of Mexico, Chile, Peru, and Colombia. The trade bloc allows the free movement of capital, goods, and labour among the members and provides an opportunity for Bank of Nova Scotia to capture business from both companies and consumers.
Firms that enter new markets require cash management services and Bank of Nova Scotia’s presence in all four of the core Pacific Alliance countries should give it an advantage. In addition, demand for loans and investment products will expand with the growing middle class.
Bank of Nova Scotia recently raised its dividend. The current payout provides a yield of 4.75%.
Is one more attractive?
Nutrien and Bank of Nova Scotia should both be solid buy-and-hold picks for a self-directed RRSP.
If you only buy one, I would probably make Nutrien the first choice right now. The stock appears oversold and the market might be underestimating the company’s potential to generate significant free cash flow when prices increase.
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Fool contributor Andrew Walker owns shares of Nutrien. Nutrien and Bank of Nova Scotia are recommendations of Stock Advisor Canada.
Street checks banned in Nova Scotia
Nova Scotia’s justice minister says he will permanently ban street checks after a legal opinion co-authored by a former top judge found the Halifax police practice, which disproportionately targeted black males, is illegal.
“The decision that I’ve come to, based on a number of contributing factors, is we will move to make the moratorium to a permanent ban on street checks,” Justice Minister Mark Furey said Friday.
“It’s reasonable that any Nova Scotian is treated with respect and professionalism.”
Furey’s announcement comes after Michael MacDonald, a former chief justice of the Nova Scotia Court of Appeal, and Jennifer Taylor, a research lawyer, analyzed the controversial police practice of logging information about people they interacted with or observed.
They wrote in a review released Friday that street checks are not reasonably necessary for police to execute their duties.
“We have concluded that the common law does not empower the police to conduct street checks, because they are not reasonably necessary. They are therefore illegal,” the review says.
The practice came under the spotlight because of a CBC News investigation. That triggered a formal review by criminologist Scot Wortley that revealed black people were street checked at a rate six times higher than white people in Halifax.
‘Interfere with individual liberty’
The Nova Scotia Human Rights Commission called on MacDonald to offer a legal opinion on street checks, which are different from another controversial practice known as carding.
Friday’s report says street checks are when an officer interacts with or observes someone, and then records personal or identifying information into a database.
“The Wortley report confirms that street checks interfere with individual liberty, and disproportionately affect Black Nova Scotians,” wrote MacDonald and Taylor.
They say street checks are not authorized under the Nova Scotia Police Act, and they also put an individual’s privacy rights in question.
Their review says under the Charter of Rights and Freedoms, Canadians have the right to simply walk down the street or spend time in public spaces anonymously. When police document those moments, they’re no longer private.
In April, Furey ordered a moratorium on random street checks.
“We are not aware of the police having any difficulty executing their duties during this time, without the ability to record street checks,” wrote MacDonald and Taylor.
‘Nobody believed us’
MacDonald and Taylor say police still have other tools available, including the ability to gather information at traffic stops or police inquiries into suspicious activity.
“If the police are legitimately concerned for someone’s personal health or safety, that would be an appropriate reason to stop them and ask some questions.”
For Lake Echo resident DeRico Symonds, who organized a large march against street checks in March, the announcement is “a huge win” that’s long overdue.
“The black community was saying, ‘This affected us.’ Nobody believed us. Then it took another white male to validate that,” he said, noting both MacDonald and Wortley are white.
“That it took this amount of effort is absolutely disappointing,” he said. “If folks don’t get their driveway shoveled in Halifax, it’s an uproar, it’s immediate action.”
‘Larger systemic issue’
Symonds intentionally put the hood of his jacket up while doing an interview with CBC News to pay homage to those who have been the target of street checks for wearing a hood.
“We have to look at the larger systemic issue,” he said of ongoing racism.
It’s a comment mirrored by the justice minister.
Furey said since the April moratorium, he’s had many meetings with members of the African-Nova Scotian community. Youth, in particular, are passionate about making change, he said.
“This is about systemic racism in Nova Scotia. We’ll have another continued discussion around that.”
Furey said Friday he will immediately tell police in the Halifax Regional Municipality that the ban is now permanent.
“I anticipate we’ll have continued co-operation,” he said of Halifax Regional Police and RCMP. “Street checks based on race are unacceptable.”
Furey said he hasn’t actually read the report, and was basing his comments on two briefings about its contents. He said he will spend the weekend reading the 92-page review himself.
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