Canada’s main stock index opened higher on Tuesday after a long holiday weekend, as positive results from an early stage trial of a COVID-19 vaccine and steady oil prices lifted investor sentiments.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 295.48 points, or 2.02%, at 14,934.38.
U.S. stocks opened slightly lower on Tuesday, as investors booked profits following the S&P 500’s best day in six weeks in the previous session.
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The Dow Jones Industrial Average fell 19.89 points, or 0.08%, at the open to 24,577.48. The S&P 500 opened lower by 5.32 points, or 0.18%, at 2,948.59, while the Nasdaq Composite dropped 7.37 points, or 0.08%, to 9,227.46 at the opening bell.
The S&P 500 jumped more than 3% on Monday, boosted by promising early stage data for a potential COVID-19 vaccine and Federal Reserve Chair Jerome Powell’s pledge to support the economy as needed until the current crisis has passed.
Trillions of dollars in stimulus has already helped the benchmark index rebound more than 34% from its March lows. Although it is now just about 13% below its record high, the pace of the rally has slowed in May owing to uncertainty over the outbreak and rising U.S.-China tensions.
“The S&P 500 is testing a key battleground zone that halted the recovery since March and much will be decided by whether the bulls are rejected again or whether they overcome it,” said Marios Hadjikyriacos, investment analyst at online broker XM.
The euro and Italian government bonds continued on Tuesday to cheer German- and French-led plans for a 500 billion euro EU coronavirus recovery fund, though stock markets were suffering fatigue after their best day in months.
There was still a sense of optimism after Monday’s news that early-stage tests on a possible COVID-19 vaccine had also proved encouraging, but the momentum had shifted.
Europe’s STOXX 600 index gave up an early rise to slip 0.7% after surging 4% in the previous session, oil began to tread water and safe-haven U.S. government bonds were making ground again in the debt markets.
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“The Franco-German proposals are ambitious, targeted and, of course, welcome,” European Central Bank President Christine Lagarde said of Monday’s plan, which would move the EU in the direction of a so-called ‘transfer union’.
The euro was buying $1.0950, up more than 1% against the dollar since the plan was announced. It was also up near a two-month high against the Swiss franc, and options markets showed fewer traders were now betting against it.
After a sizeable drop in Italian borrowing costs, Spanish and Portuguese yields led the charge on Tuesday. Morgan Stanley’s economists called the Franco-German proposal a “powerful common response, helping to mitigate the risk of a southern slump.”
The Spanish 10-year yield fell 9 basis points to 0.715%, the lowest since early April, Portuguese yields hit their lowest since late March at 0.78% and Italy’s briefly dipped under 1.6% at one point.
“It was a meaningful breakthrough but it is not going to be plain sailing from here,” said Vasileios Gkionakis, Global Head of FX Strategy at Lombard Odier, cautioning that a number of northern EU countries had voiced resistance to the proposal.
Germany’s monthly ZEW survey showed investor sentiment rebounding more quickly than expected though there were separate warnings that the German economy will slump over 7% this year.
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Britain’s pound shrugged off the UK’s highest unemployment claims figures in nearly a quarter of a century, and a near 80% plunge in European new car sales in April contributed to 1.8% fall in auto sector shares.
Asia’s overnight moves had seen MSCI’s broadest index of Asia-Pacific shares outside Japan jump 1.8% to two-week highs and Japan’s Nikkei had added nearly 2% as the region followed Wall Street and Europe rallies.
Data from the first COVID-19 vaccine to be tested in the United States had shown it produced protective antibodies in a small group of healthy volunteers.
In the commodity markets, profit-taking saw Brent prune gains though the rally looked broadly intact amid signs that producers will stick to plans to cut output when global demand picks up.
Brent stood at $35.10 a barrel, more than double where it was in mid April, and U.S. crude was at $32.70 a month on from its collapse into negative territory.
“A powerful cocktail made of bullish ingredients have been supporting the oil market for a month … Demand is improving, supply is decreasing,” said oil broker PVM’s Tamas Varga.
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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.
