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Stocks gain with US futures; oil pares drop – BNNBloomberg.ca

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U.S. equity futures advanced with European stocks on Wednesday as investors weathered continued volatility in energy markets and perused the latest earnings reports. Oil pared a decline, while gold gained.

S&P 500 Index contracts climbed after the gauge slumped more than 3 per cent a day earlier, when investors shrugged off the progress of a fresh relief package to counter the economic hit from the coronavirus. The Stoxx Europe 600 Index rose broadly in the wake of Tuesday’s slump.

Brent crude erased a tumble that reached 17 per cent earlier, while West Texas oil also pared most of its slide. Treasuries edged lower along with the dollar and European bonds fell. That region’s policy makers plan to hold a call on Wednesday evening where they may discuss whether to accept junk-rated debt as collateral from lenders, officials familiar with the matter said.

Investors are continuing efforts to assess the pandemic’s hit to the global economy, with the oil market chaos suggesting it will be deeper or longer than anticipated by those who drove the S&P 500 up 28 per cent from its March lows. Governments are devising ways to return people to work even as they discover infections are more extensive than they insisted only weeks ago.

The coronavirus killed two people in California in early and mid-February, suggesting the pathogen was circulating in the U.S. weeks earlier than health officials thought. While Germany and a few other countries are moving to relax lockdown measures to contain outbreaks, Singapore — a global standard bearer for taming the deadly illness early on — has now become home to Southeast Asia’s largest recorded outbreak and is racing to regain control.

Meanwhile, corporate earnings have been mixed. Consumer-goods companies from brewers to paint-makers sounded notes of caution on spending. Heineken NV canceled its interim dividend, while Kering said it doesn’t see a recovery in the U.S. or Europe before at least June or July after sales at its flagship brand Gucci tumbled.

“There’s no way you can predict earnings right now,” Michael Cuggino, portfolio manager at Pacific Heights Asset Management LLC, said on Bloomberg TV. “It’s virtually impossible until we have more visibility with respect to how to world comes out of the coronavirus on the other side.”

AT&T on Wednesday joined the list of companies withdrawing their forecasts. Roche Holding AG increased for a fifth day, after the drugmaker said it still sees a small profit gain this year as demand for its medicines holds up while it works on developing Covid-19 tests.

Elsewhere, the Australian dollar rose as better-than-expected retail sales data triggered the unwinding of some short positions. Stocks slipped in Japan but climbed in other major Asian markets. Gold rebounded to US$1,700 an ounce.

These are the main moves in markets:

Stocks

  • Futures on the S&P 500 Index increased 1.3 per cent as of 7:22 a.m. New York time.
  • Nasdaq 100 Index futures rose 1.1 per cent.
  • The Stoxx Europe 600 Index climbed 1.1 per cent.
  • The MSCI Asia Pacific Index gained 0.3 per cent.

Currencies

  • The Bloomberg Dollar Spot Index decreased 0.2 per cent.
  • The euro rose 0.2 per cent to US$1.0875.
  • The British pound gained 0.7 per cent to US$1.2373.
  • The Japanese yen strengthened 0.1 per cent to 107.65 per dollar.

Bonds

  • The yield on 10-year Treasuries gained two basis points to 0.59 per cent.
  • Britain’s 10-year yield rose one basis point to 0.311 per cent.
  • The spread of Italy’s 10-year bonds over Germany’s rose one basis point to 2.642 percentage points.

Commodities

  • West Texas Intermediate crude dipped 1.6 per cent to US$11.39 a barrel.
  • Brent crude gained 0.2 per cent to US$19.37 a barrel.
  • Gold strengthened 0.9 per cent to US$1,701.73 an ounce.
  • Copper rose 0.6 per cent to US$2.28 a pound.

–With assistance from Haidi Lun and Adam Haigh.

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Roots sees room for expansion in activewear, reports $5.2M Q2 loss and sales drop

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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.

Companies in this story: (TSX:ROOT)

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Talks on today over HandyDART strike affecting vulnerable people in Metro Vancouver

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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.

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Transat AT reports $39.9M Q3 loss compared with $57.3M profit a year earlier

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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.

Companies in this story: (TSX:TRZ)

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