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Asia shares rise on more stimulus hopes but dollar loses steam – Reuters

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TOKYO (Reuters) – Asian stocks rose on Friday as investors wagered policymakers will roll out more stimulus measures to combat the coronavirus pandemic after U.S. unemployment filings surged to a record.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.2%. Australian shares gave up gains to fall 1.09%, but Japan’s Nikkei rose 1.44%.

E-Mini futures for the S&P 500 reversed course and fell 0.95% in Asia following three consecutive days of gains in the S&P 500 on Wall Street.

The dollar nursed losses against major currencies as central banks’ steps to solve a dollar shortage in funding markets started to gain traction.

The U.S. House of Representatives is expected to pass a $2 trillion stimulus package later on Friday that will flood the world’s largest economy with money to stem the damage caused by the pandemic.

The U.S. Federal Reserve has already slashed rates to zero and launched quantitative easing. The Fed will also take the unprecedented step of offering a direct backstop for corporate loans.

The United States is now the country with the most coronavirus cases, surpassing even China, where the flu-like illness first emerged late last year. Policymakers may need to offer more stimulus as the virus slams the brakes on economic activity and increases healthcare spending.

“I’m not sure what measures are left, but the reaction in stocks shows some people hoping for more stimulus thought the market was a little oversold,” said Yukio Ishizuki, FX strategist at Daiwa Securities in Tokyo.

“Currencies tell a different story. The dollar is the lead actor. The mad rush to buy dollars due to liquidity concerns is starting to fade.”

The number of Americans filing claims for unemployment benefits surged to a record of more than 3 million last week as strict measures to contain the virus pandemic ground the country to a sudden halt, data showed on Thursday.

The jobless blowout was announced shortly after Fed Chairman Jerome Powell said the United States “may well be in recession”, an unusual acknowledgement by a Fed chair that the economy may be contracting even before data confirms it.

Global equity markets took the data in their stride, partly as most central banks have already aggressively eased policy and governments are backing this up with big fiscal spending.

Chinese shares, battered this month because of the virus, rose 0.8% on Friday. Shares in South Korea, another country hit hard by the pandemic, jumped by 1.62%.

Leaders of the Group of 20 major economies pledged on Thursday to inject over $5 trillion into the global economy to limit job and income losses from the coronavirus.

CURRENCY MARKET

In the currency market, the greenback fell 0.89% to 108.64 yen in Asia, on pace for a 2% weekly decline.

The dollar was also headed for weekly declines against the Swiss franc, pound, and euro.

The U.S. currency’s fall after two weeks of gains suggests that the Fed’s efforts to relieve a crunch in the dollar funding market are working, some analysts said.

The yield on benchmark 10-year Treasury notes rose slightly in Asia to 0.8160%, while the two-year yield edged up to 0.2809%.

Yields were still headed for a weekly decline, taking cues from the Fed’s extraordinary steps to bolster markets and the $2 trillion stimulus package.

FILE PHOTO: Passersby wearing protective face masks following an outbreak of the coronavirus disease (COVID-19) are reflected on a screen displaying stock prices outside a brokerage in Tokyo, Japan, March 17, 2020. REUTERS/Issei Kato

U.S. crude ticked up 2.08% to $23.07 a barrel. Brent rose 1.14% to $26.64 per barrel. Energy markets have been caught in a tug-of-war between hopes for stimulus spending and worries about excess oil supplies.

Gold, normally bought as a safe haven, was slightly lower. Spot gold fell 0.44% to $1,626.16 per ounce.

Gold market participants remained concerned about a supply squeeze after a sharp divergence between prices in London and New York. The virus has grounded planes used to transport gold and closed precious metal refineries.

Editing by Richard Pullin and Himani Sarkar

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Coronavirus Selloff: Why This Dividend Stock Is Massively Outperforming the Market – The Motley Fool Canada

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The coronavirus selloff has wreaked havoc on investors’ portfolios. But throughout this, we have seen some standouts that are outperforming. TC Energy (TSX:TRP)(NYSE:TRP), for example, has massively outperformed the market in March and year to date.

TC Energy is a dividend stock that offers investors many characteristics that we should be looking for in today’s difficult markets. This is why the stock has outperformed so massively year to date.

A dividend stock that is massively outperforming the market in this coronavirus selloff

I think it would be fair to say that even before this all started, many of us were expecting a selloff in the markets that had continued to flirt with all-time highs. But nobody expected this coronavirus selloff. So, this has become the new reality of wealth destruction. In this environment, the importance of finding the outperformers is even more pronounced. Thankfully, we do have some standouts. We are seeing bright spots that are offering investors somewhat of a shelter.

Bright spots such as TC Energy. TC Energy stock price lost 10.6% of its value in March, which is not great, of course. But this significantly outperformed the S&P/TSX Composite Index, which lost 17.7%. Year to date, TC Energy fell 9.6%, while the TSX Composite Index fell 21.6%. That’s certainly a pretty impressive outperformance.

TC Energy stock weathers the coronavirus selloff with its highly visible business

TC Energy’s business is an essential one. Its assets include 93,300 kilometres of natural gas pipelines, 4,900 kilometres of oil pipelines, gas storage, and 6,000 megawatts of power generation. This strategic footprint is invaluable, offering a lifeline today with strong growth prospects for tomorrow.

TC Energy’s business is a highly defensive and visible one. This is because 90-95% of TC Energy’s EBITDA is regulated or under contract. This results in a utility-like stock, and as we know, utility stocks are famous for their predictability and security. All of this means that it is highly unlikely that the dividend will be cut. And the dividend income is a big part of the story of TC Energy. With its dividend yield of 5.5% today, investors get a pretty low risk and generous return with dividend income alone.

With a well-managed debt balance and a self-funded capital-expenditure model, I see TC Energy stock as increasingly attractive today. To top this all off, the dividend yield of 5.5% should provide added comfort to investors.

Foolish bottom line

So far, the coronavirus selloff has resulted in 2020 being a year of huge wealth destruction anyway you look at it. Today, I am here to tell you that it is time to look ahead. Stock markets trade based on outlooks, not based on the past. It seems pretty clear that the markets are pricing in much of the bad news. So now, despite the continued uncertainty, let’s look to the stocks that will be best suited for investors to make some huge gains when this is all over.

TC Energy stock price is trading at levels that appear to be discounting more bad news than will actually materialize for the company. Yes, the shutdown due to the coronavirus will have broad, far-reaching negative consequences.  Yes, investors are in for continued volatility.  And yes, a lot of wealth may continue to be lost. But at the end of the day, it is companies like TC Energy that will lead us out of this crisis.  When that time comes, we would all be grateful if we reached for TC Energy stock today.

Canadian Stocks to Buy on the Cheap During the Market Crash

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Fool contributor Karen Thomas owns shares of TRANSCANADA CORP.

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'Grim reality' as equity markets close near session lows – BNNBloomberg.ca

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North American equity markets sank deeper into the red to end the first day of the second quarter, settling near session lows. Toronto’s benchmark S&P/TSX composite Index fell nearly four per cent, while the S&P 500, Dow Jones Industrial Average and Nasdaq Composite all dropped about four-and-a-half per cent amid concerns over the impact of the COVID-19 outbreak.

In Toronto, 10 of the 11 subgroups finished the session in negative territory, with safe-haven gold names helping the materials subgroup buck the trend. The healthcare, utilities and energy sectors on the TSX posted the biggest declines.

Lightspeed POS Inc., which provides point-of-sale software for retailers, cannabis producer Hexo Corp.  and BlackBerry Ltd. – which declined to provide a financial forecast for this fiscal year in the face of the virus outbreak – and were the lead laggards on the TSX.

Gold producers dominated the list of leaders, with Kinross Gold Corp., IAMGold Corp. and Pretium Resources Inc. posting the largest percentage gains.

Crude prices had a volatile day, with U.S. benchmark West Texas Intermediate seesawing between positive and negative territory amid global economic growth concerns, the end of the OPEC+ curtailment agreement, the oil price war between the Saudis and the Russians and the massive 13.8 million barrel inventory build the U.S. reported Wednesday. WTI kept close to US$20 per barrel, rising a little more than one per cent at 4 p.m. ET. Western Canadian Select rose modestly, but is still trading at about $5 per barrel.

The Canadian dollar had another down day against its U.S. counterpart, falling to the low 70-cent U.S. level.

12:40 p.m. ET: North American equities fade, near session lows

North American equity markets fell to near-session lows in the early afternoon after initially paring their losses. The S&P/TSX composite index, S&P 500, Dow Industrials and Nasdaq all fell more than three per cent in early afternoon trading as the COVID-19-induced pain of the first quarter extended into the second.

In Toronto, shares of BlackBerry Ltd. fell back into a double-digit sell-off, making the company one of the worst-performing stocks on Canada’s benchmark index Wednesday. South of the border, Carnival Corp. was the lead laggard on the S&P 500 after the company cancelled some cruises through the end of the year due to the virus outbreak.

U.S. benchmark oil West Texas Intermediate hovered around US$20 per barrel after the massive crude inventory buildup. The Canadian dollar slid against its U.S. counterpart to the low 70-cent U.S. range.

10:50 a.m. ET: North American equity markets pare losses in mid-morning

North American equity markets pared some of their early losses by mid-morning but remained firmly in negative territory amid concerns over the fallout of the COVID-19 virus. The S&P/TSX composite index, S&P 500, Dow Industrials and the Nasdaq were all down more than two per cent after falling more than three per cent at the opening bells.

In Toronto, 10 of the 11 subgroups were trading lower, with the materials group bucking the trend. Real estate, health care and utilities were the lead laggards.

BlackBerry Ltd. clawed back some ground with shares down about nine per cent after an initial 16 per cent plunge. Shares of Teck Resources Ltd. recovered entirely, entering positive territory. Shares of Dollarama Inc. remained modestly negative.

Oil prices dipped in the wake of a massive U.S. inventory buildup that exceeded even the highest estimate, with stockpiles rising 13.83 million barrels last week. Economists surveyed by Bloomberg had a median estimate of a 3.3 million barrel build. Though prices fell, benchmark West Texas Intermediate crude remains in the US$20 per barrel range.

9:33 a.m. ET Markets Open: ‘Grim reality’ as equity markets fall to start second quarter

Global equity markets kicked off the year’s second quarter in negative territory on Wednesday after a disastrous first quarter. The S&P/TSX composite index, S&P 500, Dow Industrials and Nasdaq indices all fell more than three per cent in early trading, following  a decline in European markets.  

Investors are weighing the ongoing impact of the COVID-19 as virus outbreak as cases in the United States continue to climb. U.S. President Donald Trump said Tuesday that Americans should brace for a “painful two weeks” as officials forecast hundreds of thousands of deaths in total due to the virus.

In Europe, a string of Purchasing Managers’ Indexes were deep in contraction territory. The U.K.’s big banks, including HSBC Holdings Plc and Barclays Plc, axed dividend payments and share buybacks, sending the European banks index lower.

Crude oil prices had a volatile morning amid those economic concerns, the expiration of the OPEC+ production curtailment agreement and the ongoing price war between Saudi Arabia and Russia. Saudi Arabia’s production surged to more than 12 million barrels per day, though Russia said it would not boost output.

In Toronto, it was another day of companies shelving their forecasts in the wake of the uncertainty caused by the virus.

Teck Resources Ltd. suspended its full-year guidance and announced it has put construction activity at its QB2 project in Chile on hold, with no certainty on the timeline to resume construction. Shares fell more than seven per cent at the open of trading on Wednesday.

Dollarama Inc. suspended its fiscal 2021 outlook, telling investors it’s “impossible to forecast the impact of the pandemic on the Canadian economy.” The discount retailer said sales slowed through the end of last month due to social distancing efforts after an initial surge in February and early March, sending the stock modestly lower.

BlackBerry Ltd. warned of a tough first quarter and declined to offer a full-year forecast in the face of the outbreak, with CEO John Chen telling investors it wasn’t prudent to offer a view in light of the uncertainty. BlackBerry was one of the worst performing stocks on the TSX in early trading, trading down 16 per cent.

A&W Revenue Royalties Income Fund announced it is suspending distributions to shareholders, and disclosed 200 of its restaurants are temporarily closed and that traffic is down significantly at those that remain open.

While the damage has been widespread through the first quarter of 2020, markets veteran David Rosenberg is warning the worst is yet to come. In a note to clients, Rosenberg, the chief economist and strategist at Rosenberg Research and Associates, said investors should brace for further downside.

“It is a brutal session today across most risk-assets —rather incredible when you think of the massive amounts of firepower unleashed by global monetary and fiscal policymakers,” he said. 

“A grim reality is that we are only now about to enter the eye of the storm and the 22 per cent plunge in global equities —the worst performance since 2008 —was actually just an appetizer despite all the proclamations from Wall Street pundits that the lows had been turned in.”

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Scott Stinson on COVID-19: If Canadian governments want better public buy-in, then give us better data – National Post

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Before the coronavirus shut down sports, I spent a lot of time most days looking at numbers.

And now, I spend a lot of time most days looking at numbers.

Instead of points per possession, or shot attempts, or expected goals, it’s COVID-19 cases, and percentage daily increases, and testing rates.

There are lessons from the analysis of sports statistics that can be applied to the much more important data that is now impacting how we live our everyday lives, bunkered away and either lonely or constantly bumping into family members.

But the biggest lesson, so far, is this: this data stinks. If a professional sports league was providing the kind of scattered, incomplete information that our governments are releasing on the coronavirus pandemic, we would ridicule them. And we have. (Hello, National Hockey League).

But when this data is meant to inform the public about the spread of an illness, and whether the measures we are taking have been effective, there is something more than ridicule that should be offered. We should be mad. We deserve better from our governments.

The single coronavirus statistic that is most cited these days is the number of cases in a particular place. Everywhere you turn, there are references to the steady global rise, or the sharp jumps in places like New York and Spain, and before that, China and Italy. In Canada there has also been a steep upward trajectory, which is distressing given all the talk about flattening the curve and the social-distancing measures that a significant number of citizens have undertaken.

Are Ontarians doing a bang-up job of containing this thing, or do we simply not have the proper data?

But that statistic, on its own, doesn’t say much. Rates of coronavirus testing vary wildly from province to province, which naturally affects the number of positive cases discovered. As of Wednesday morning, Ontario appeared to be having moderate success at restraining the spread of the virus, with just under 2,000 cases, for a rate of about 13 per 100,000 residents. That rate is lower than the rate in six other provinces. But again, as of Wednesday morning, Ontario had also run far fewer tests on a per-capita basis. Quebec had completed 16,000 more tests, even though Ontario has six million more residents. Alberta had completed 94 per cent as many tests as Ontario, despite having less than a third of its population.

So, are Ontarians doing a bang-up job of containing this thing, or do we simply not have the proper data? It’s like comparing the goals scored by two hockey teams, when one has played far more games. Further clouding the picture is that Quebec, with double the confirmed cases of Ontario, includes “presumed” cases as positive results. Thus, there’s no standard agreement on what constitutes a goal.

On cue, Ontario’s updated Wednesday numbers revealed a jump of more than 400 cases, the largest daily increase so far, but on a day when more than double the amount of tests were resolved than a day earlier. More tests, more positives. More games, more goals.

And while the numbers of confirmed cases are what lead all of the daily media briefings, experts have said for some time that it is hospitalized cases that are most concerning.


A traveller stands in the International arrivals hall at Toronto’s Pearson Airport, on Friday, March 27, 2020. Six planes carrying Canadians stranded in Africa and Europe are to touch down today in the government’s effort to repatriate travellers stranded by COVID-19.

Chris Young /

THE CANADIAN PRESS

It’s those numbers that demonstrate whether the health-care system is on pace to be overwhelmed, as has happened in places like Italy, which causes a commensurate jump in the death rate. In the sports context, hospitalization or intensive-care rates would be the advanced stats, the underlying numbers that give a more accurate picture of performance than the tops-of-the-waves stuff. But the information our governments provide on these details is scattershot and incomplete at best. It has to be chased down separately, although some provinces appear to be finally moving in the direction of providing it as part of their daily releases.

It is worth noting here that health care is a provincial responsibility, and so there are obstacles in the way to providing uniform, Canada-wide information. But isn’t a global pandemic the time for Ottawa to shake itself out of its normal way of doing business? The time for it to ensure that the coronavirus information released to the public is comprehensive and accurate? We shouldn’t have to be trying to infer what the numbers from Quebec and Ontario and Alberta mean. We should know, because someone in a position to know is telling us.

The information our governments provide on these details is scattershot and incomplete at best

It’s not even clear that federal officials should be trying to describe coronavirus spread in national terms. In recent days, the Canada-wide picture has been one of consistent daily jumps, but these are driven by big increases in Quebec and Ontario. The situation in British Columbia and the Prairies appears — for now, at least — to be one of significant progress in terms of limiting the spread of the disease, and a sign that the social-distancing measures are having the desired impact. You’d think that’s a message that Ottawa’s political and medical leaders would want to drive home, instead of simply reporting the steady national increases.

Of course, much about this pandemic has been changing rapidly, and I understand that people in high places have been forced to figure this stuff out on the move. But we are being told that our new reality of isolation and lockdown could carry on for weeks and months.

If our governments want the public to understand why all this is happening, it needs to provide the public with better information. And it needs to do that now.

Postmedia News

sstinson@postmedia.com

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