Canada’s main stock index rose on Tuesday, supported by gains in healthcare and energy stocks, while investors awaited comments from Bank of Canada’s top policymaker for clues on the future path of monetary policy.
At 10:43 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 48.27 points, or 0.23%, at 20,920.16.
The benchmark index is set to rebound from its worst day since Jan. 17.
Healthcare stocks, which includes pharmaceuticals and biotech firms, lead gains and advanced 1.3%.
Energy stocks rose 0.4% and were on track to snap a four-session losing streak tracking higher oil prices.
The information technology sector declined the most among sectoral peers, with a loss of 0.5%.
“The TSX had a pretty tough day yesterday, and so did the U.S. In North America, it looks like markets are stabilizing today, waiting to see what happens next,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.
Meanwhile, BoC Governor Tiff Macklem will speak at 1:00 p.m. ET at the Montreal Council on Foreign Relations on the effectiveness and limitations of monetary policy.
“Investors will be keeping an eye out to see if he has anything new to say about inflation or interest rates, relative to the BoC’s statement a couple of weeks ago where they were fairly neutral,” Cieszynski added.
Focus will now shift to minutes of BoC’s last policy meeting, due on Wednesday, where the bank left its key overnight rate unchanged.
Key domestic employment data is due later in the week.
In corporate news, shares of oil and gas drilling firm Precision Drilling Corp climbed 9.3% to the top of the index after the company reported its fourth-quarter results.
U.S. stocks are drifting in mixed trading Tuesday as the bond market calms down following some sharp swings.
The S&P 500 was virtually unchanged in midday trading, a day after slipping from its all-time high. The Dow Jones Industrial Average was up 66 points, or 0.2%, and the Nasdaq composite was 0.2% lower.
Stocks have been under some pressure recently as hints keep arriving that the Federal Reserve likely won’t deliver cuts to interest rates as soon as traders had hoped. The economy has remained remarkably solid, even though the Fed has jacked up rates to slow it and inflation down. That has pushed some forecasts for the first easing of rates from March into the summer.
If easier interest rates in the short term won’t boost stock prices, the hope is that strong profits by companies will.
GE Healthcare Technologies was one of the best performers in the S&P 500 and up 11% after reporting healthier profit and revenue than expected.
Palantir Technologies, one of the companies that’s been riding a frenzy on Wall Street about artificial intelligence technology, jumped 24.1% after its results for the latest quarter roughly matched analysts’ expectations.
Streaming music and podcast platform Spotify leaped 8.4% after it reported stronger-than-expected growth in its subscriber base, even as revenue missed analyst targets.
They helped to offset a 9.7% tumble for FMC, whose products help protect crops. The company’s profit and revenue fell short of analysts’ projections, in part because of drought conditions in Brazil.
Fiserv was another laggard. The payments and financial technology company fell 3.7% after its revenue for the latest quarter fell just short of analysts’ expectations. Its profit nevertheless topped forecasts.
With earnings season at about the midway point, there are still plenty of heavyweights reporting this week including CVS Health, The Walt Disney Co. and PepsiCo.
In the bond market, the yield on the 10-year Treasury relaxed a bit and calmed following its slingshot ride higher in recent days. It eased to 4.11% from 4.17% late Monday.
Strong reports on the job market, services industries and other areas of the U.S. economy have pushed yields higher, up from 3.88% earlier this month.
While a delay in rate cuts hurts the stock market, particularly after very high expectations for them were a big reason for a big rally, the strong economic data also carry an upside for investors. They should mean stronger profits for companies.
Consider Wall Street’s reaction to Friday’s report that showed employers hired many more workers last month than expected. Investments tied to the S&P 500 initially fell after the release of the blowout data, but the index climbed through the day to close at a record.
That may indicate that the market “is warming up to the idea that `good news is, in fact, good,’ and perhaps less reliant on rate cuts,” according to UBS strategists led by Maxwell Grinacoff. But they acknowledge that stocks seen as lower quality are not seeing as big a benefit.
In stock markets abroad, Chinese indexes soared following the latest measures announced to prop up what have been some of the world’s worst-performing markets. Investors are hoping for even more action from the government.
Stocks leaped 4% in Hong Kong and 3.2% in Shanghai, though they’re both still down by more than 5% for the young year so far. Worries about a weak economic recovery and troubles in the real-estate industry have dragged on Chinese stocks.
Stocks were mixed and moved more modestly elsewhere in Asia and in Europe.
In London, the FTSE 100 rose 0.7% after shares of energy giant BP jumped following its latest earnings report.
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.
