<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Stocks closed at record levels Tuesday after each of the S&P 500 and Nasdaq touched yet another record intraday high earlier in the session. A closely watched index tracking US consumer confidence unexpectedly deteriorated in August to a fresh pandemic-era low, cooling hopes for an extended rebound in consumer spending trends.” data-reactid=”16″>Stocks closed at record levels Tuesday after each of the S&P 500 and Nasdaq touched yet another record intraday high earlier in the session. A closely watched index tracking US consumer confidence unexpectedly deteriorated in August to a fresh pandemic-era low, cooling hopes for an extended rebound in consumer spending trends.
Earlier in the day, investor optimism had been stoked by signs that terms of an early-phase US-China trade deal would remain intact despite rising tensions elsewhere between the two countries.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Officials from both Washington and Beijing “see progress and are committed to taking the steps necessary to ensure the success” of the Phase One trade agreement signed between the two nations in January this year, according to a statement from the Office of the US Trade Representative Monday night. This came after U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He met via videoconference for a formal review of the multi-part agreement, which had helped bring a two-year trade war between the two nations to a ceasefire.” data-reactid=”19″>Officials from both Washington and Beijing “see progress and are committed to taking the steps necessary to ensure the success” of the Phase One trade agreement signed between the two nations in January this year, according to a statement from the Office of the US Trade Representative Monday night. This came after U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He met via videoconference for a formal review of the multi-part agreement, which had helped bring a two-year trade war between the two nations to a ceasefire.
Contracts on the three major indices initially rallied following the news. The Dow’s regular-session declines came as shares of current components including Exxon Mobil, Pfizer and Raytheon Technologies each sank following news that each would be replaced in the 30-stock index next week.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="After market close on Monday, S&P Dow Jones Indices announced that three new companies would be joining the Dow Jones Industrial Average, effective before market open on Monday, Aug. 31. Salesforce.com (CRM) is set to replace Exxon Mobil (XOM), with the oil major having been an index component for nearly a century. Honeywell International (HON) will replace Raytheon Technologies (RTX) and Amgen (AMGN) will replace Pfizer (PFE). Each of the companies joining the index added about 4% in late trading, while those exiting the index declined.” data-reactid=”21″>After market close on Monday, S&P Dow Jones Indices announced that three new companies would be joining the Dow Jones Industrial Average, effective before market open on Monday, Aug. 31. Salesforce.com (CRM) is set to replace Exxon Mobil (XOM), with the oil major having been an index component for nearly a century. Honeywell International (HON) will replace Raytheon Technologies (RTX) and Amgen (AMGN) will replace Pfizer (PFE). Each of the companies joining the index added about 4% in late trading, while those exiting the index declined.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Meanwhile, a handful of software companies filed to go public on Monday, as investor appetite for risk assets – and tech stocks with high-growth potential especially – remained elevated. Among the companies filing was Snowflake, a cloud data platform expected previously speculated to go public this year, following a funding round that valued it at $12.4 billion in February. The company, while unprofitable, posted revenue growth that more than doubled over last year. Other software companies that filed their go-public prospectus on Monday included Unity Software, Sumo Logic and JFrog.” data-reactid=”22″>Meanwhile, a handful of software companies filed to go public on Monday, as investor appetite for risk assets – and tech stocks with high-growth potential especially – remained elevated. Among the companies filing was Snowflake, a cloud data platform expected previously speculated to go public this year, following a funding round that valued it at $12.4 billion in February. The company, while unprofitable, posted revenue growth that more than doubled over last year. Other software companies that filed their go-public prospectus on Monday included Unity Software, Sumo Logic and JFrog.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Looking ahead to Tuesday, earnings season will continue with publicly traded software names Autodesk (ADSK), Salesforce (CRM) and Intuit (INTU) poised to report quarterly results after market close.” data-reactid=”23″>Looking ahead to Tuesday, earnings season will continue with publicly traded software names Autodesk (ADSK), Salesforce (CRM) and Intuit (INTU) poised to report quarterly results after market close.
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<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="4:02 p.m. ET: S&P 500, Nasdaq eke out record closes as tech shares gain; Amazon hits highest-ever level” data-reactid=”27″>4:02 p.m. ET: S&P 500, Nasdaq eke out record closes as tech shares gain; Amazon hits highest-ever level
Here were the main moves in markets as of 4:02 p.m. ET:
Gold (GC=F): -$5.10 (-0.26%) to $1,934.10 per ounce
10-year Treasury (^TNX): +3.6 bps to yield 0.6820%
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12:12 p.m. ET: American Airlines set to cut 19,000 jobs after US federal aid expires
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="American Airlines (AAL) is set to slash 19,000 workers after federal payroll aid expires for the company and other US airlines on Oct. 1, according to a securities filing Tuesday.” data-reactid=”38″>American Airlines (AAL) is set to slash 19,000 workers after federal payroll aid expires for the company and other US airlines on Oct. 1, according to a securities filing Tuesday.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Of the jobs expected to be cut, approximately 17,500 employees are set to be furloughed and could be called back once industry conditions improve. The remaining 1,500 will comprise cuts to management. Air passenger throughout remains down by about 70% over last year, according to TSA data.” data-reactid=”39″>Of the jobs expected to be cut, approximately 17,500 employees are set to be furloughed and could be called back once industry conditions improve. The remaining 1,500 will comprise cuts to management. Air passenger throughout remains down by about 70% over last year, according to TSA data.
Shares of American Airlines fell 4% in intraday trading, and peers including United Airlines and Delta Air Lines also sank.
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10:00 a.m. ET: Consumer Confidence unexpectedly falls for a second straight month in August, hitting lowest level in six years
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The three major indices turned lower Tuesday morning after The Conference Board’s Consumer Confidence Index for August unexpectedly declined to a fresh pandemic-era low, taking out the previous low from April.” data-reactid=”43″>The three major indices turned lower Tuesday morning after The Conference Board’s Consumer Confidence Index for August unexpectedly declined to a fresh pandemic-era low, taking out the previous low from April.
The headline index came in at 84.8 in August, down from a revised 91.7 in July, according to the report. That marked the lowest reading since 2014. Consensus economists expected the confidence index to rise to 93.0 in August. A subindex tracking consumer expectations fell 3.7 points to 85.2, and another tracking sentiment around current conditions slid 11.7 points to 84.2.
The percentage of consumers expecting business conditions will improve over the next six months declined to 29.9% from from 31.6%. Those expecting business conditions would worsen ticked up slightly to 20.5%.
“Consumers’ optimism about the short-term outlook, and their financial prospects, also declined and continues on a downward path,” Lynn Franco, senior director of economic indicators at the Conference Board, said in a statement. “Consumer spending has rebounded in recent months but increasing concerns amongst consumers about the economic outlook and their financial well-being will likely cause spending to cool in the months ahead.”
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9:55 a.m. ET: Best Buy, Hormel, JM Smucker report estimates-topping quarterly results
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Best Buy (BBY), Hormel (HRL) and JM Smucker (SJM) added to a hefty batch of companies reporting quarterly results that beat consensus expectations this earnings season.” data-reactid=”53″>Best Buy (BBY), Hormel (HRL) and JM Smucker (SJM) added to a hefty batch of companies reporting quarterly results that beat consensus expectations this earnings season.
Best Buy posted adjusted earnings of $1.71 per share on revenue of $9.91 billion, with each of these better than the $1.05 per share in adjusted earnings on sales of $9.78 billion expected. CEO Corie Barry said in a statement, “products that help people work, learn connect and cook at home, like computing appliances and tablets, were the largest drivers of our sales growth for the quarter.” Barry added that that enterprise sales growth was about 16% in the last seven weeks of the second quarter after the company opened our stores. Growth accelerated into August, with sales up approximately 20% for the first three weeks of the third quarter.
Hormel’s fiscal third-quarter net sales of $2.38 billion represented a quarterly record, as ongoing strength in its retail business was supplemented by a pick-up in its foodservice business as restaurants and other businesses reopened. Looking ahead, CEO Jim Snee said in a statement this morning he expects the fourth quarter will mirror the trends seen in the fourth quarter in terms of the strength of the retail and grocery business and recovery in foodservice. He added, however, that “the magnitude of additional recovery in the foodservice industry, the performance of the entire food supply chain and the state of the broader economy remain highly uncertain.”
JM Smucker posted top- and bottom-line results that also topped expectations, with adjusted earnigs of $2.37 per share well above the $1.68 expected. The company got a boost from increased at-home consumption, said that the coffee and consumer foods portfolios were especially strong during the quarter, with consumer foods’ profit up 62%. JM Smucker raised its guidance and now sees net sales increasing by as much as 1% for the full year, versus a previous outlook for a decline of between 1% and 2%
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9:50 a.m. ET: Stocks drift near record levels
Here’s where the three major indices traded shortly after market open Tuesday:
S&P 500 (^GSPC): +3.71 points (+0.11%) to 3,434.99
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.
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.
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.
