Canada’s main stock index started lower at Monday’s open with energy and mining shares weighing while investors await the Bank of Canada’s business outlook survey later in the morning.
U.S. markets are closed Monday for Martin Luther King Jr. Day.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 29.37 points, or 0.14 per cent, at 20,330.73.
On Monday morning, the Bank of Canada delivers its twin surveys on business outlook and consumer expectations. The report comes ahead of Tuesday’s key reading on December inflation in Canada and the central bank’s next interest rate decision, which is due Jan. 25.
“RBC Economics expects today’s BoC’s Q4 business outlook survey to show an ongoing deterioration in the future sales outlook,” Alvin Tan, Asia FX strategist with RBC, said in an early note.
“This would be consistent with softer business sentiment in manufacturing PMI data. The BoC will be watching longer-run business inflation expectations and wage plans. Comments on businesses’ price-setting behaviour will also be closely scrutinized after the Q3 release flagged more businesses resorting to more frequent price raises.”
The two Bank of Canada reports are due at 10:30 a.m. ET.
Ahead of that, Canadian investors got a reading on Canada’s housing market with the release of December home sale figures from the Canadian Real Estate Association.
CREA said sales were up 1.3 per cent month-over-month in December but down 39.1 per cent from levels seen a year earlier.
The MLS Home Price Index declined by 1.6 per cent month-over-month and was down 7.5 per cent year-over-year, the association said.
Overseas, the pan-European STOXX 600 was up 0.23 per cent by midday. Britain’s FTSE 100 gained 0.12 per cent. Germany’s DAX added 0.21 per cent while France’s CAC 40 was up 0.16 per cent.
In Asia, Japan’s Nikkei finished down 1.14 per cent. Hong Kong’s Hang Seng added 0.04 per cent.
Commodities
Crude prices dipped early Monday but still held most of last week’s strong gain as the reopening in China fuels optimism over future demand.
The day range on Brent is US$84.05 to US$85.59 in early trading. The range on West Texas Intermediate was US$78.79 to US$80.22. Trading remained thin with U.S. markets closed for the day.
Last week, both benchmarks spiked 8 per cent, for the best weekly showing since last fall.
“The fact remains that the first half of the year, at least, will be enormously challenging for the global economy but lower terminal rates and even cuts later in the year will cushion the blow and could see it outperform current expectations,” OANDA senior analyst Craig Erlam said in a recent note.
“That, along with the resurgence in China, will be a big plus for crude demand and could keep the price well supported.”
In other commodities, gold prices slipped as the U.S. dollar firmed.
Spot gold dipped 0.3 per cent to US$1,914.04 per ounce, as of early Monday morning, after hitting its highest since late April at US$1,929 per ounce earlier in the session.
U.S. gold futures fell 0.3 per cent to US$1,915.80.
Currencies
The Canadian dollar was little changed while its U.S. counterpart steadied after touching a seven-month low against a group of currencies.
The day range on the Canadian dollar was 74.51 US cents to 74.90 US cents.
Canadian investors get the Bank of Canada business outlook and consumer expectation surveys this morning followed by fresh inflation figures tomorrow morning.
On world markets, the U.S. dollar index, which weighs the greenback against a group of currencies, hit a seven-month low of 101.77 in Asian trading, extending its selloff from last week after data showed that U.S consumer prices fell for the first time in more than 2-1/2 years in December, Reuters reported.
The euro touched a new nine-month high of US$1.0874 in early trading before pulling back to US$1.0861, while the Australian dollar breached the key US$0.7000 level for the first time since August, before dipping back to US$0.6959, the news agency said.
Economic news
(8:30 a.m. ET) Canadian manufacturing sales and new orders for November.
(8:30 a.m. ET) Canadian construction investment for November.
(9 a.m. ET) Canada’s existing home sales and average prices for December.
(9 a.m. ET) Canada’s MLS Home Price Index for December.
(10:30 a.m. ET) Bank of Canada’s Business Outlook Survey and Survey of Consumer Expectations for Q4 are released.
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.
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