TORONTO —
Canada’s main stock index crossed into bear market territory Wednesday in the wake of the World Health Organization declaring the COVID-19 outbreak a pandemic.
The S&P/TSX composite index closed down 688 points or 4.6 per cent at 14,270.09.
A bear market is commonly defined as a loss of 20 per cent from a recent high. The TSX ended the day down 20.6 per cent off the record high of 17,970.51 set on Feb. 20.
U.S. stock markets also moved into bear market territory with the Dow Jones industrial average losing 1,464.94 points or 5.9 per cent at 23,553.22. That’s 20.3 per cent off its last high, also in February.
The S&P 500 index was down 140.85 points at 2,741.38, while the Nasdaq composite was down 392.20 points at 7,952.05. Both indexes were just short of the 20 per cent threshold.
The bull run of rising stock prices that has endured more than 11 years is expected to resume its climb in the second half of the year after the economic effects of the novel coronavirus subside and monetary and fiscal stimulus kicks in.
In the meantime, markets may continue to drop, possibly five to 15 per cent, before recouping losses to end the year higher, says Candice Bangsund, portfolio manager for Fiera Capital.
“We are going to see near-term volatility — short-term pain for long-term gain, that is our base case,” she said in an interview.
Fiera trimmed its year-end forecast for the TSX to 18,200, which would imply a 27.5 per cent increase from the current level.
Strategists at Goldman Sachs on Wednesday sharply cut their expectations for earnings growth this year, which they said could drag the S&P 500 index down to 2,450 in the middle of the year for a nearly 28 per cent drop from its record.
The banking firm also says the drop will be short lived, with the S&P 500 possibly rising back to 3,200 by the end of the year.
The midweek downturn marked a large swing from the prior day’s trading and wild market gyrations over the past couple of weeks. In addition to the WHO designation, investors were concerned by the lack of details on U.S. President Donald Trump’s promised large fiscal stimulus and falling oil prices.
“Of course markets were extremely disappointed going into the open this morning,” said Bangsund, before Trump said he would give a national address from the Oval Office on Wednesday evening.
“I think in general the expectations are for fairly aggressive and forceful, most importantly, co-ordinated moves from policy-makers, and we haven’t yet seen that come to fruition.”
Bangsund said investors were underwhelmed by the Canadian government’s $1-billion package to help the country’s health-care system and economy cope with the novel coronavirus outbreak as the number of cases in Canada grew.
She said it was met with a muted market response “partly because it’s not an overwhelmingly impressive stimulus package” but also because it was offset by virus-related headlines from the WHO.
The Canadian dollar traded for 72.75 cents US compared with an average of 72.83 cents US on Tuesday.
All 11 major sectors on the TSX decreased in a broad-based decline of between three and 7.4 per cent.
Energy was the worst performer as crude oil prices once again fell as the United Arab Emirates joined Saudi Arabia in agreeing to boost production in a war with Russia. That caused Crescent Point Energy Corp.’s shares to drop 15.6 per cent, followed by Imperial Oil that was down nearly 14 per cent.
The April crude contract was down US$1.38 at US$32.98 per barrel and the April natural gas contract was down 5.8 cents at US$1.88 per mmBTU.
“The oil supply shock has come at a very inopportune time when global oil demand was already being contracting, so that of course has added to an already fragile global economic backdrop,” Bangsund said.
Health care and materials were each down more than 6.5 per cent. The Green Organic Dutchman Holdings Ltd. and Aurora Cannabis Inc. were off 20.4 and 12 per cent respectively while shares of First Quantum Minerals Ltd. dropped 11.5 per cent on lower metal prices.
The April gold contract was down US$18 at US$1,642.30 an ounce and the May copper contract was down 1.95 cents at US$2.50 a pound.
The best performer on the day was telecommunications and consumer staples.
With files from The Associated Press.
This report by The Canadian Press was first published March 11, 2020.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
