Stocks gained on Monday, rising to fresh record levels after last week’s volatility as investors looked ahead to a key event from the Federal Reserve later this week.
The S&P 500 advanced and reached a fresh all-time intraday high. The positive sentiment extended into other risk assets, and oil prices also rebounded following recent declines. U.S. West Texas intermediate crude oil futures (CL=F) topped $64 a barrel, and Brent crude (BZ=F) jumped above $67 per barrel after suffering its longest losing streak since early 2018 as of last week.
“It’s the return of risk appetite in the broader financial markets,” Vandana Insights CEO Vandana Hari told Yahoo Finance of the rebound on Monday. “The real blow last week was signals the Fed might start tapering towards the end of this year, and I think that was a real double whammy for oil.”
The Dow rose as shares of Chevron (CVX) and Caterpillar outperformed. Shares of Pfizer (PFE) jumped after the pharmaceutical company announced it will acquire the cancer drugmaker Trillium Therapeutics (TRIL) for $2.3 billion. Separately, the U.S. Food and Drug Administration fully approved Pfizer’s top-selling COVID-19 vaccine following months of use under emergency authorization.
Stocks came under pressure late last week after the Federal Open Market Committee’s July meeting minutes signaled that “most” Fed participants believed the economy will have recovered enough to warrant the start of asset-purchase tapering by the end of this year. The S&P 500 posted its first weekly decline in three weeks, albeit while closing out Friday’s session to the upside. Central bank officials are set to hold their annual Jackson Hole Symposium this week starting on Thursday, which could serve as a forum for more remarks about the size and scope of the Fed’s tapering plans.
A host of new earnings and economic data have also come in. On the whole, corporate profits have been exceptionally strong, with nearly 90% of S&P 500 companies having topped consensus earnings per share estimates, according to FactSet. That’s come even as concerns over the spread of the Delta variant have resurged and issues around supply chain and materials and labor shortages have remained.
“I think we certainly are not going to get the kind of fiscal stimulus that we’ve had over the past year-and-a-half, nor the monetary stimulus. So I think overall, the market’s handling all this remarkably well,” Ed Yardeni, Yardeni Research president and chief investment officer, told Yahoo Finance. “The perception is that the Federal Reserve is now seriously moving in the direction of tapering because the economy is doing fine. But any way you slice it or dice it, it’s going to be slower growth, slower earnings growth, slower economic growth, and that’s probably keeping the bond yield down and giving some weakness to the oil patch.”
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10:23 a.m. ET: U.S. service-sector activity cooled to an 8-month low in August amid Delta variant: IHS Markit
Activity in both the U.S. services and manufacturing sectors decelerated in August as the rapid spread of the Delta variant dampened overall growth.
IHS Markit’s flash August services business activity index fell to 55.2 from 59.9 in July. This was a steeper decrease than the dip to 59.2 expected, according to Bloomberg data, and brought the index down to the lowest level in eight months. Readings above the neutral level of 50.0 indicate expansion in a sector.
The manufacturing activity index also fell more than expected to 61.2 from 63.4 in July. This marked a four month low, and came in below the 62.0 economists were anticipating.
“The expansion slowed sharply again in August as the spread of the Delta variant led to a weakening of demand growth, especially for consumer-facing services, and further frustrated firms’ efforts to meet existing sales,” Chris Williamson, chief business economist at IHS Markit, said in a press statement.
“Not only have supply chain delays hit a new survey record high, but the August survey saw increasing frustrations in relation to hiring,” he added. “Jobs growth waned to the lowest since July of last year as companies either failed to find suitable staff or existing workers switched jobs.”
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10:02 a.m. ET: Existing home sales unexpectedly rose in July, marking back-to-back monthly gain
Sales of previously owned homes gained 2.0% in July, according to the National Association of Realtors’ monthly report, marking a second consecutive monthly gain. Consensus economists were looking for existing home sales to dip by 0.5% on the month, according to Bloomberg estimates.
In June, existing home sales had increased by 1.6%. July’s advance brought existing home sales to a seasonally adjusted annual rate of 5.99 million, or the highest level since March.
Home prices continued to creep higher in July as tight inventories and elevated demand continued to weigh on affordability. The median existing-home price came in at $359,900 for a jump of 17.8% compared to the same month last year.
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9:31 a.m. ET: Stocks gain, recovering from last week’s losses
Here’s where markets were trading just after the opening bell Monday morning:
Traders work at the trading floor in the New York Stock Exchange in New York, the United States, Aug. 19, 2021. The S&P 500 Index closed at 4,405.80 points, up 5.53 points, or 0.13 percent. The Dow Jones Industrial Average closed at 34,894.12 points, down 66.57 points, or 0.19 percent.The Nasdaq Composite Index closed at 14,541.79 points, up 15.88 points, or 0.11 percent. (Photo by Wang Ying/Xinhua via Getty Images)
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
