Canada’s main stock index looked set to snap a three-day winning streak on Friday as concerns over the rapid spread of the coronavirus outweighed optimism around a stimulus package, while a decline in oil prices dragged energy stocks lower.
The Toronto Stock Exchange’s S&P/TSX composite index fell 568.49 points, or 4.25%, to 12,802.68 by 11:45 a.m. ET.
Ten of the index’s 11 major sectors declined, with the energy sector dropping 8.2% as crude prices tumbled on dwindling demand.
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However, a strong run in the last three sessions has put the index on track for its first weekly gain after four straight weeks of declines.
Canada almost doubled the value of an aid package to $52-billion to help people and businesses deal with losses from the outbreak, but optimism around the measures were short lived.
Investors also looked past the Bank of Canada’s move to slash its key overnight interest by 50 basis points for the third time this month, cutting the rate to the lowest in more than a decade.
The financials sector slipped 4.5% and industrials fell 3.5%.
The health care sector rose 0.36% in morning trading.
Stocks across the globe fell on Friday after a historic three-day run-up, with indexes poised to close the month and quarter with starkly negative performances.
The volatility of the erratic markets is expected to continue as the coronavirus pandemic that triggered closures in economies worldwide remains very much a threat.
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The United States surpassed two grim milestones on Thursday as virus-related deaths soared past 1,000 and it become the world leader in confirmed cases.
The uncertainty over the overall human and economic toll was reflected in financial markets, with MSCI’s gauge of global stocks on track to post both its largest weekly percentage gain since 2008 and its largest monthly and quarterly drops since 2008.
The infection rate for the coronavirus is driving much of the market at a time of great uncertainty, said Yousef Abbasi, global market strategist at INTL FCStone Financial Inc in New York.
“My big hang-up here is when the curve does start to flatten, that doesn’t mean we can return to normal human and economic behavior. If we do return to normal human and economic behavior, we risk the chance the curve goes parabolic again. Just from the perspective of how long this potentially can last, there’s still a great deal of uncertainty,” he said.
The Dow Jones Industrial Average fell 827.25 points, or 3.67%, to 21,724.92, the S&P 500 lost 87.31 points, or 3.32%, to 2,542.76 and the Nasdaq Composite dropped 255.69 points, or 3.28%, to 7,541.85.
The pan-European STOXX 600 index lost 3.22% and MSCI’s gauge of stocks across the globe shed 2.41%.
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Emerging market stocks lost 1.07%.
Stock markets have rallied over the past week on trillions of dollars of enacted and pledged economic stimulus by policymakers worldwide, from central banks to governments.
Policymakers may need to offer more stimulus as the virus slams the brakes on economic activity and increases healthcare spending.
“Next week, markets will likely continue to focus on the spread of COVID-19 – whether European cases are reaching a peak, how much of the U.S. will be put in lockdown, and whether China can avoid a second wave,” said Gaétan Peroux, strategist at UBS Global Wealth Management.
The U.S. House of Representatives is expected to pass a $2.2 trillion stimulus package that will flood the world’s largest economy with money to stem the economic damage caused by the pandemic.
Amid the avalanche of stimulus, the U.S. dollar was little changed for the day and remained on track for its biggest weekly decline since May 2009.
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The dollar index fell 0.393% on Friday.
The euro was up 0.24% to $1.1055, the Japanese yen strengthened 1.57% versus the greenback at 107.92 per dollar, while Sterling was last trading at $1.2367, up 1.36% on the day.
The U.S. currency’s fall after two weeks of steep gains suggests the Federal Reserve’s efforts to relieve a crunch in the dollar funding market are working, some analysts said.
“What we are seeing is abating stress in the money markets. Action by central banks has been successful so far and a shortage of dollars has been taken off the table,” said Ulrich Leuchtmann, head of FX and EM research at Commerzbank.
U.S. Treasury yields were headed for a weekly decline, though the range of trading was far less volatile than in the previous two sessions.
Benchmark 10-year notes last rose 22/32 in price to yield 0.7377%, from 0.808% late on Thursday. The 30-year bond last rose 1-26/32 in price to yield 1.3267%, from 1.395%.
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Oil prices continued their fall on demand concerns as the virus slowed economies to a crawl, which outweighed the stimulus efforts.
U.S. crude recently fell 5.44% to $21.37 per barrel and Brent was recently at $24.54, down 6.83% on the day.
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.
Spot gold dropped 0.3% to $1,623.82 an ounce. The metal was on track to post its largest weekly advance since 2008.
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.
