Canada’s main stock index was flat on Thursday with bleak trade data for April denting sentiment.
The nation’s exports and imports plunged in April as the coronavirus-fueled lockdowns forced factories and retail stores to shut businesses, Statistics Canada said.
At 11:51 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 1.65 points, or 0.01%, at 15,573.58.
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The energy sector erased early losses and sat 0.1%, despite a slide in oil prices.
The financials sector was up 0.3%. The industrials sector rose 0.2%.
The materials sector, which includes precious and base metals miners and fertilizer companies, added 1% as spot gold futures rose 0.5% to $1,706.05 per ounce, recovering from a slide to a near one-month low of $1,688.89 in the last session. U.S. gold futures were up 0.4% at $1,710.90.
Canada posted a trade deficit of $3.25-billion in April as exports fell by nearly 30% to the lowest level in more than 10 years at $32.7-billion. Analysts had forecast exports would be $42.1-billion.
“This dismal report adds to the evidence that the economy contracted sharply in April,” said Ryan Brecht, a senior economist at Action Economics. “However, the reopening of the economy and recovery in energy prices in May suggests that April will mark the bottoming out of activity.”
On Wednesday, the Bank of Canada said the impact of the coronavirus pandemic on the global economy appears to have peaked, while the Canadian economy seems to have avoided worst-case scenario projections.
The S&P 500 and Nasdaq indexes edged lower in choppy trading on Thursday, as a rally fueled by hopes of a post-coronavirus economic recovery fizzled out even with weekly jobless claims dipping below 2 million for the first time since mid-March.
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Still, the Nasdaq 100 became the first U.S. equity index to reclaim its intraday record high, powered by the NYSE FANG+TM index, which includes Facebook Inc, Apple Inc , Amazon.com Inc, Netflix and Alphabet Inc.
Wall Street’s main indexes have recovered sharply from their March lows and the tech-heavy Nasdaq index is now only 2% below its all-time closing high hit in February.
“In this market, you need to be selective and technology continues to be one of our favorite sectors,” said Larry Adam, chief investment officer at Raymond James in Baltimore, Maryland.
“There’s going to be much more reliance on fundamentals … and (technology-related) are the types of companies that have the earnings growth that will be rewarded by the market.”
A report from the Labor Department showed new claims for state unemployment benefits totaled 1.877 million for the week ended May 30, down from 2.126 million in the prior week. Economists polled by Reuters had forecast 1.8 million initial claims in the latest week.
Focus will now shift to the closely watched employment report for May, due Friday, which is expected to show the unemployment rate rocketing to 19.8%, a post-World War Two record.
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The Dow Jones Industrial Average was up 14.28 points, or 0.05%, at 26,284.17, the S&P 500 was down 7.23 points, or 0.23%, at 3,115.64 and the Nasdaq Composite was down 37.95 points, or 0.39%, at 9,644.96.
American Airlines Group Inc jumped 24.5% after the airline revealed plans to fly more than 55% of its July 2019 domestic capacity and boost its U.S. flight schedule next month.
Jif peanut butter maker J.M. Smucker Co fell 3.8% after the company forecast a decline in full-year sales on weakness in sales to restaurants and schools.
Charles Schwab Corp gained 1.5% after it received an anti-trust approval from the Department of Justice for its purchase of TD Ameritrade Holding Corp. Shares of TD Ameritrade jumped 3.5%.
EBay Inc jumped 6.3% after it raised its current-quarter revenue and profit forecast, as people stuck at home ordered more from its platform due to the COVID-19 pandemic.
Oil prices fell on Thursday on doubts over the ability of top crude producers to agree to extend record output cuts, heightened by worries over a build in U.S. fuel inventories.
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Brent crude futures were down 48 cents, or 1.2%, at $39.31 a barrel. U.S. West Texas Intermediate (WTI) crude futures dropped 74 cents, or 2%, to $36.55.
Saudi Arabia and Russia, two of the world’s biggest oil producers, want to extend cuts of 9.7 million barrels per day (bpd) that major producers agreed to in April. But a suggestion by the Organization of the Petroleum Exporting Countries’ current president Algeria to meet on Thursday was delayed amid talks about poor compliance by some producers.
OPEC and allies led by Russia, a group known as OPEC+, could still hold a ministerial video conference this week if Iraq and others which have not fully complied with existing supply cuts agree to boost their adherence, three OPEC+ sources told Reuters.
Reuters
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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.
