Stocks fell on Monday to give back some gains after last week’s advances, while energy prices resumed a march higher.
The S&P 500, Dow and Nasdaq traded lower Monday afternoon in a choppy session. The major indexes extended losses after Federal Reserve Chair Jerome Powell said the Fed would “adjust policy as needed” to bring down inflation, including by speeding up interest rate hikes if necessary. Treasury yields added to earlier gains across the curve, and the benchmark 10-year yield rose to near 2.3%.
Energy and commodity prices spiked amid the latest developments in Russia’s war in Ukraine. As of Monday, Ukraine refused to surrender its heavily attacked port city of Mariupol to Russian forces, while the civilian death toll across Ukraine climbed.
U.S. crude oil prices (CL=F) jumped more than 6% at session highs to top $112 per barrel, and Brent crude, the international standard, (BZ=F), rose to more than $116 per barrel. Aluminum, palladium and wheat prices each also gained Monday.
At the start of a relatively quiet week for corporate earnings results and new economic data, traders continued to mull the market implications of the Federal Reserve’s latest monetary policy decision against persistently elevated inflation and the ongoing war in Ukraine, which has exacerbated existing price pressures.
The Federal Reserve’s move last week to raise interest rates by a quarter-point and signal another six rate hikes later this year was met with an at least momentary rally in U.S. equities, with traders relieved to receive some clarity on the central bank’s monetary path forward after weeks of speculation. And the Fed also signaled the likely start of discussions and then implementation of quantitative tightening, or rolling assets off its nearly $9 trillion balance sheet.
“The key message to come from meetings of the Federal Reserve and Bank of England last week, and the European Central Bank the week before, was that the war in Ukraine has not deterred central bankers from their plans to tighten policy,” Neil Shearing, group chief economist for Capital Economics, wrote in a note. “In fact, both the Fed and the ECB delivered hawkish surprises.”
“The war has added to the squeeze on real incomes in advanced economies and caused a substantial tightening of financial conditions in Europe. But, for now, central banks remain focused on bringing down inflation and containing any second-round effects on wages and prices. This is, on balance, the correct judgement,” he added. “While the economic outlook is unusually uncertain, the high starting point for inflation – and the likelihood that it will rise further – justifies a tightening of policy.”
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4:04 p.m. ET: Stocks end lower after hawkish Fed remarks: Dow drops 202 points, or 0.6%
Here were the main moves in markets as of 4:04 p.m. ET:
Gold (GC=F): -$0.40 (-0.02%) to $1,928.90 per ounce
10-year Treasury (^TNX): +14.7 bps to yield 2.295%
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12:33 p.m. ET: Powell says Fed will ‘adjust policy as needed’ to bring down inflation, preserve strong labor market
Federal Reserve Chair Jerome Powell said Monday that the central bank would continue to monitor incoming data and developments and “adjust monetary policy as needed” to bring down inflation while also keeping economic growth intact.
“As the outlook evolves, we will adjust policy as needed in order to ensure a return to price stability with a strong job market,” Powell said in a speech.
He also noted that “ongoing rate increases will be appropriate” to help bring inflation back toward the Fed’s target of 2%. This was consistent with what the Fed telegraphed last week following its March meeting, wherein the median members’ forecast saw rates rising another six times this year.
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9:30 a.m. ET: Stocks open slightly lower
Here’s where stocks were trading just after market open Monday morning:
8:51 a.m. ET: Fed’s Bostic sees six total rate hikes this year given ‘elevated levels of uncertainty’
Atlanta Federal Reserve President Raphael Bostic said Monday he saw the central bank raising interest rates a total of six times this year, representing a more dovish outlook than many of his peers offered in the Federal Open Market Committee’s latest Summary of Economic Projections (SEP).
“I recognize that I am toward the bottom of the distribution relative to my colleagues, but the elevated levels of uncertainty are front forward in my mind and have tempered my confidence that an extremely aggressive rate path is appropriate today,” Bostic said. “Events are shifting rapidly, and we could see marked changes along key dimensions, such as aggregate demand, that could warrant quickly adjusting the trajectory of policy.”
“Here the risks go both ways. Should demand falter in the face of economic uncertainty or removal of monetary policy accommodation, then the appropriate path may be shallower than I currently project,” he added. “But there are other developments, such as shifts in supply strategies, that could mean higher costs and thus motivate a steeper policy path than I expect.”
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8:37 a.m. ET: Chicago Fed National Activity Index shows modest deceleration in economic growth in Feb.
The headline index ticked down to 0.51 for February, the Chicago Fed said Monday morning. This dropped for 0.59 in January, which was in turn revised slightly lower from the 0.69 previously reported. Readings of 0 are consistent with U.S. economic growth rates at the average historical trend, while readings above zero indicate growth.
Of the 85 monthly economic indicators comprising the index, 61 made positive contributions, while 24 detracted from the index during February.
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8:20 a.m. ET: Boeing shares drop after 737 passenger jet crashes in China
Shares of Dow component Boeing (BA) fell Monday morning in pre-market trading after a passenger plane with more than 130 people on board crashed in China’s Guangxi province.
The Civil Aviation Administration of China confirmed the crash of the Boeing 737 jet, which was operated by China Eastern Airlines. The number of casualties following the crash remains unknown, and Chinese officials have dispatched a rescue team to the crash site.
Shares of Boeing dropped more than 6% in early trading. The stock has fallen by 4.2% for the year-to-date through Friday’s close.
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7:40 a.m. ET Monday: Stock futures mixed, Dow and Nasdaq head for slightly lower opens
Here’s where markets were trading heading into the opening bell Monday morning:
S&P 500 futures (ES=F): +2.25 points (+0.05%) to 4,455.75
Dow futures (YM=F): -58 points (-0.17%) to 34,575.00
Nasdaq futures (NQ=F): -1 point (-0.01%) to 14,412.50
NEW YORK, NEW YORK – MARCH 16: Traders work on the floor of the New York Stock Exchange (NYSE) on March 16, 2022 in New York City. The Dow started off the day in positive territory, extending yesterday’s rally. (Photo by Spencer Platt/Getty Images)
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
