Global stock markets and oil prices plunged Monday after a fight among major crude-producing nations jolted investors who already were on edge about the surging costs of a virus outbreak.
The main stock indexes in London and Frankfurt were down by almost 7 per cent. Tokyo closed down 5.1 per cent while Sydney lost 7.3 per cent and Shanghai was off 3 per cent.
Trading in Wall Street futures was halted after they fell more than the daily limit of 5 per cent. Bond yields hit new lows as investors bought them up as safe havens.
The benchmark U.S. crude price was down over 20 per cent to their lowest levels since 2016. They were down as much as 30 per cent earlier, deepening a rout that began when Saudi Arabia, Russia and other major producers failed to agree on cutting output to prop up prices. A breakdown in their co-operation suggested they will ramp up output just as demand is sliding.
Investors usually welcome lower energy costs for businesses and consumers. But it can also hurt producers, such as oil companies. The last time crude prices fell this low, in 2015, the U.S. saw a raft of bankruptcies by smaller energy companies.
The abrupt plunge in markets added to the anxiety over the coronavirus, rattling markets and sending investors in search of safe havens like bonds.
“A blend of shocks have sent the markets into a frenzy on what may only be described as `Black Monday,”‘ said Sebastien Clements, analyst at financial payments platform OFX.
“A combination of a Russia vs. Saudi Arabia oil price war, a crash in equities, and escalations in coronavirus woes have created a killer cocktail to worsen last week’s hangover.”
In Saudi Arabia, the Riyadh stock exchange suspended trading of state-owned oil giant Saudi Aramco after its share price sank by the daily 10 per cent limit at the opening.
Investors already were on edge about the mounting costs of the coronavirus outbreak that began in China and has disrupted world travel and trade.
Anxiety rose after Italy announced it was isolating cities and towns with some 16 million people, or more than one quarter of its population, in its industrial and financial heartland.
In Europe, London’s FTSE 100 tumbled 6.5 per cent to 6,039 after opening down by more than 8 per cent. Frankfurt’s DAX shed 6.2 per cent to 10,825 and the CAC 40 in France lost 6.7 per cent to 4,797. Italy’s FTSE MIB plunged 9.8 per cent to 18,755.
On Wall Street, trading in futures for the Dow Jones Industrial Average and the S&P 500 was frozen after both fell by more than 5 per cent, a daily limit. The last time they were frozen was just after U.S. President Donald Trump was elected in 2016.
Companies have been hit by travel and other controls that are spreading worldwide as the global number of coronavirus infections rose past 110,000 worldwide.
Tokyo’s Nikkei 225 fell to 19,698.76 after the government reported the economy contracted 7 per cent in the October-December quarter, worse than the original estimate of a 6.3 per cent decline. That was before the viral outbreak slammed tourism and travel but after a sales tax hike dented consumers’ appetite for spending.
Hong Kong’s Hang Seng sank 4.2 per cent to 25,047.42. The Shanghai Composite Index declined to 2,943.29.
The S&P-ASX 200 in Sydney retreated to 5,760.60. The Kospi in Seoul lost 4.2 per cent to 1,954.77.
India’s Sensex retreated 6.2 per cent to 35,255.73. Markets in Taiwan, New Zealand and Southeast Asia also declined.
Benchmark U.S. crude fell 21.9 per cent, or $9.03, to $32.25 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, lost 20.7 per cent, or $9.32, to $35.95 per barrel in London.
The International Energy Agency said in a report Monday that oil demand could fall this year for the first time since the global financial crisis in 2009.
“The oil price will stay low” in the $30s per barrel, IEA chief Fatih Birol said.
The dollar sank to 102.41 yen from Friday’s 105.29 yen. Investors in Asia often buy up the Japanese currency and bonds in times of volatility. The euro advanced to $1.1408 from $1.1289.
Chinese factories that make the world’s smartphones, toys and other consumer goods are gradually reopening but aren’t expected to return to normal production until at least April. That weighs on demand for imports of components and raw materials from China’s Asian neighbours.
Apple Inc. says slowdowns in manufacturing iPhones in China will hurt its sales totals. An airline industry group says carriers could lose as much as $113 billion in potential ticket sales.
Adding to pessimism, China reported Saturday that its exports fell 17 per cent and imports were off 4 per cent from a year earlier in January and February after Beijing shut factories, offices and shops in the most severe anti-disease measures ever imposed.
Central banks worldwide have cut interest rates. But economists warn that while that might help to encourage consumer and corporate spending, it cannot reopen factories that are due to quarantines or a lack of workers and raw materials.
Investors are looking ahead to a meeting Thursday of the European Central Bank, which is widely expected to announce new stimulus measures.
Already last week, global stocks were sinking as the spread of the virus prompted governments to follow China’s lead by imposing travel controls and cancelling public events.
The U.S. Federal Reserve’s emergency 0.5 per cent cut in its key lending rate failed to reverse the downturn and the yield on the 10-year Treasury, already at record lows, dipped under 0.40 per cent from 0.7 per cent late Friday.
The yield – the difference between a bond’s market price and what investors will receive if they hold it to maturity – is an indicator of the market’s outlook on the economy. Rising market prices that cause the yield to narrow indicate investors are shifting money into bonds as a safe haven.
“Global recession risks have risen,” Moody’s Investors Service said in a report. “A sustained pullback in consumption, coupled with extended closures of businesses, would hurt earnings, drive layoffs and weigh on sentiment.”
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.
