Canada’s main stock index fell on Friday, dragged down by the energy sector as concerns about rising coronavirus cases in the United States and China dented hopes for fuel demand recovery.
Fears linger that a spike in COVID-19 infections in southern U.S. states could stall the demand recovery, as they are among the biggest gasoline consumers.
The energy sector dropped 1.1% as benchmark U.S. crude was down 1.4% to $38.17 a barrel. Brent crude, the price standard for international oils, was down 0.5% to $40.91 a barrel.
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At 11:28 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 172.39 points, or 1.12%, at 15,273.79.
The financials sector slipped 2.1%, while the industrials sector slipped 0.1%.
The materials sector, which includes precious and base metals miners and fertilizer companies, lost 0.1% even though gold futures rose 0.2% to $1,764.7 an ounce.
Wall Street’s major indexes dropped on Friday as the United States set a new record for a one-day increase in coronavirus cases and bank stocks tumbled after the Federal Reserve decided to cap shareholder payouts.
The S&P 500 banks sub-index declined 5% after the Fed limited dividend payments and barred share repurchases until at least the fourth quarter following its annual stress test.
In the previous session, banks stocks had powered Wall Street’s main indexes higher, helping them offset investor fears due to rising virus infections in several U.S. states, including Texas, Oregon and Utah.
Cases rose across the United States by at least 39,818 on Thursday. Texas, which has been at the forefront of easing restrictions, paused its reopening plans after the state recorded its one of the biggest jumps in new infections.
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“States are rethinking the reopening and that’s going to affect a lot of businesses,” said David Yepez, lead equity analyst and portfolio manager at Exencial Wealth Advisors in Oklahoma.
“We’re not going to test those March lows but there could be a correction, because we got a little bit too high.”
The uptick in cases has also threatened to derail a strong rally for Wall Street that brought the S&P 500 within 10.7% of its February all-time high on the back of record government stimulus measures.
The benchmark index was also testing its the 200-day moving average, an indicator of long-term momentum. If it closes below the key level, it could signal further losses.
The Dow Jones Industrial Average was down 532.55 points, or 2.07%, at 25,213.05, the S&P 500 was down 54.56 points, or 1.77%, at 3,029.20. The Nasdaq Composite was down 194.40 points, or 1.94%, at 9,822.61.
Nike Inc dropped 5.8% as the footwear maker posted reported a surprise quarterly loss hurt by store closures due to the pandemic.
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Facebook Inc shed 6.4% after Verizon Communications Inc joined an advertising boycott that called out the social media giant for not doing enough to stop hate speech on its platforms.
Gap Inc surged 31.4% after it entered into a 10-year deal with rapper and fashion designer Kanye West to create a Yeezy line of clothing.
Data showed U.S. consumer spending rebounded by the most on record in May, but the gains are not likely to be sustainable, as income declined and expected to fall further as millions lose their unemployment checks starting next month.
Friday also marks the reconstitution of the FTSE Russell indexes, including large cap Russell 1000 and small cap Russell 2000, that often marks one of the biggest trading volume days of the year.
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.
