TORONTO — v>
Canada’s main stock index lost some ground midweek on weakness by the key energy and financials sectors.
Business
S&P/TSX composite drops midweek on energy and financials weakness
The S&P/TSX composite index closed down 132.41 points at 15,701.33.
Activity was mixed in the United States. The Dow Jones industrial average was down 282.31 points at 26,989.99 and the S&P 500 index was down 17.04 points at 3,190.14.
The Nasdaq composite was up 66.59 points at 10,020.35, the first time it closed above 10,0000 after setting another record intraday high. The tech-heavy market benefited as shares of Amazon and Apple set new highs.
Markets started the day stronger but faded even though the Federal Reserve gave a dovish outlook that was widely expected as it kept interest rates unchanged and vowed to keep them at rock-bottom levels at least through 2022.
“So of course, investors welcomed this move to maintain an accommodative stance in general,” said Candice Bangsund, portfolio manager for Fiera Capital.
But Fed chairman Jerome Powell later highlighted that considerable risks prevail while the path forward remains uncertain and dependent on the COVID-19 pandemic.
The U.S. economy is expected to shrink 6.5 per cent this year before growing by five per cent in 2021 and 3.5 per cent in 2022.
The central bank forecasts that the unemployment rate will end the year at 9.3 per cent before falling to 6.5 and 5.5 per cent over the next two years.
Powell noted the recovery will potentially take some time, thereby potentially dismissing the potential for a sharp V-shaped recovery in the back half of the year.
“The fact that equities are now fading that really might just suggest that investors got a little bit ahead of themselves and didn’t maybe acknowledge the risks out there particularly given the current level of equity valuations,” Bangsund said in an interview.
Eight of the 11 major sectors of the TSX were lower, led by energy.
It dropped four per cent despite higher crude oil prices with Shawcor Ltd. and Vermilion Energy Inc. up 8.9 and 7.1 per cent respectively.
The July crude contract was up 66 cents at US$39.60 per barrel and the July natural gas contract was up 1.3 cents at US$1.78 per mmBTU.
The Canadian dollar traded for 74.68 US compared with 74.50 cents US on Tuesday.
Real estate, health care, industrials and the heavyweight financials sectors were also lower. Industrials dropped as shares of Bombardier Inc. fell nearly eight per cent and Air Canada were 7.1 per cent lower.
Materials, consumer staples and technology were higher. Materials climbed 2.5 per cent with Oceanagold Corp. up 8.2 per cent and Kinross Gold Corp. up 6.2 per cent.
The August gold contract was down US$1.20 at US$1,720.70 an ounce and the July copper contract was up 5.75 cents at nearly US$2.66 a pound.
The strong weighting of U.S. markets towards technology stocks helped the S&P 500 and Nasdaq to outperform the TSX.
While coronavirus hospitalizations have surged in Texas and Arizona, investors have been largely ignoring the risks of a second wave of infections, said Bangsund.
“A lot of the optimism we’ve been seeing has largely been positioning for a scenario whereby a vaccine is made available and economic activity can resume and go back to more pre-COVID levels at a faster than expected pace.”
This report by The Canadian Press was first published June 10, 2020
Source: – CTV News
Business
Transat AT reports $39.9M Q3 loss compared with $57.3M profit a year earlier
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)
The Canadian Press. All rights reserved.
Business
Dollarama keeping an eye on competitors as Loblaw launches new ultra-discount chain
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
Companies in this story: (TSX:DOL)
Business
U.S. regulator fines TD Bank US$28M for faulty consumer reports
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
Companies in this story: (TSX:TD)
The Canadian Press. All rights reserved.
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