More retailers have announced layoffs and store closures at their Canadian operations as they continue to grapple with the impacts of the COVID-19 pandemic.
Canada Goose Holdings Inc. announced Wednesday it would lay off 125 employees, or about 2.5 per cent of its more than 5,000-person workforce. It did not answer questions about where the laid off employees worked or how many were in Canada.
It was a “difficult, but responsible decision,” the company said in a statement and comes after it has taken several steps to address the business impacts of the coronavirus.
The Toronto-based retailer closed its North American and European retail stores on March 17, joining a wave of government mandated and voluntary store closures to help curb the spread of the virus.
CEO Dani Reiss said at that time he would forgo his salary for at least three months and the money would instead be used to help the company’s employees.
Canada Goose suspended the long-term outlook it initially provided in May 2019 as it did not account for the coronavirus pandemic, and reiterated its new outlook for the 2020 financial year that it noted at its last quarterly earnings in February.
“The extent and duration of COVID-19 disruptions remain uncertain and they may negatively impact future fiscal periods more significantly,” the company said in March.
Canada Goose says it is committed to support laid off employees with what it called fair compensation packages, extended benefits, a letter of reference from the CEO and other assistance.
Meanwhile, American retailer L Brands announced Wednesday it will reduce the number of company-owned Victoria’s Secret stores and close about 250 in the U.S. and Canada this year.
The company plans to go from 33 Victoria’s Secret stores in Canada at the start of this year to 23, according to a forecast in its financial documents, and reduce its PINK-brand stores, which target post-secondary women, from five to two.
This report by The Canadian Press was first published May 21, 2020.
At midday: TSX flat following release of dismal trade data – The Globe and Mail
Canada’s main stock index was flat on Thursday with bleak trade data for April denting sentiment.
The nation’s exports and imports plunged in April as the coronavirus-fueled lockdowns forced factories and retail stores to shut businesses, Statistics Canada said.
At 11:51 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 1.65 points, or 0.01%, at 15,573.58.
The energy sector erased early losses and sat 0.1%, despite a slide in oil prices.
The financials sector was up 0.3%. The industrials sector rose 0.2%.
The materials sector, which includes precious and base metals miners and fertilizer companies, added 1% as spot gold futures rose 0.5% to $1,706.05 per ounce, recovering from a slide to a near one-month low of $1,688.89 in the last session. U.S. gold futures were up 0.4% at $1,710.90.
Canada posted a trade deficit of $3.25-billion in April as exports fell by nearly 30% to the lowest level in more than 10 years at $32.7-billion. Analysts had forecast exports would be $42.1-billion.
“This dismal report adds to the evidence that the economy contracted sharply in April,” said Ryan Brecht, a senior economist at Action Economics. “However, the reopening of the economy and recovery in energy prices in May suggests that April will mark the bottoming out of activity.”
On Wednesday, the Bank of Canada said the impact of the coronavirus pandemic on the global economy appears to have peaked, while the Canadian economy seems to have avoided worst-case scenario projections.
The S&P 500 and Nasdaq indexes edged lower in choppy trading on Thursday, as a rally fueled by hopes of a post-coronavirus economic recovery fizzled out even with weekly jobless claims dipping below 2 million for the first time since mid-March.
Still, the Nasdaq 100 became the first U.S. equity index to reclaim its intraday record high, powered by the NYSE FANG+TM index, which includes Facebook Inc, Apple Inc , Amazon.com Inc, Netflix and Alphabet Inc.
Wall Street’s main indexes have recovered sharply from their March lows and the tech-heavy Nasdaq index is now only 2% below its all-time closing high hit in February.
“In this market, you need to be selective and technology continues to be one of our favorite sectors,” said Larry Adam, chief investment officer at Raymond James in Baltimore, Maryland.
“There’s going to be much more reliance on fundamentals … and (technology-related) are the types of companies that have the earnings growth that will be rewarded by the market.”
A report from the Labor Department showed new claims for state unemployment benefits totaled 1.877 million for the week ended May 30, down from 2.126 million in the prior week. Economists polled by Reuters had forecast 1.8 million initial claims in the latest week.
Focus will now shift to the closely watched employment report for May, due Friday, which is expected to show the unemployment rate rocketing to 19.8%, a post-World War Two record.
The Dow Jones Industrial Average was up 14.28 points, or 0.05%, at 26,284.17, the S&P 500 was down 7.23 points, or 0.23%, at 3,115.64 and the Nasdaq Composite was down 37.95 points, or 0.39%, at 9,644.96.
American Airlines Group Inc jumped 24.5% after the airline revealed plans to fly more than 55% of its July 2019 domestic capacity and boost its U.S. flight schedule next month.
Jif peanut butter maker J.M. Smucker Co fell 3.8% after the company forecast a decline in full-year sales on weakness in sales to restaurants and schools.
Charles Schwab Corp gained 1.5% after it received an anti-trust approval from the Department of Justice for its purchase of TD Ameritrade Holding Corp. Shares of TD Ameritrade jumped 3.5%.
EBay Inc jumped 6.3% after it raised its current-quarter revenue and profit forecast, as people stuck at home ordered more from its platform due to the COVID-19 pandemic.
Oil prices fell on Thursday on doubts over the ability of top crude producers to agree to extend record output cuts, heightened by worries over a build in U.S. fuel inventories.
Brent crude futures were down 48 cents, or 1.2%, at $39.31 a barrel. U.S. West Texas Intermediate (WTI) crude futures dropped 74 cents, or 2%, to $36.55.
Saudi Arabia and Russia, two of the world’s biggest oil producers, want to extend cuts of 9.7 million barrels per day (bpd) that major producers agreed to in April. But a suggestion by the Organization of the Petroleum Exporting Countries’ current president Algeria to meet on Thursday was delayed amid talks about poor compliance by some producers.
OPEC and allies led by Russia, a group known as OPEC+, could still hold a ministerial video conference this week if Iraq and others which have not fully complied with existing supply cuts agree to boost their adherence, three OPEC+ sources told Reuters.
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Gold shrugs as ECB throws more stimulus into markets to fight COVID-19 – Kitco NEWS
(Kitco News) – The gold market is holding steady above $1,700 but is seeing little reaction as the European Central Bank threw more stimulus into financial markets Thursday.
As expected, following its monetary policy meeting, the ECB announced that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively.
However, in an effort to support the European economy, devastated by the COVID-19 pandemic, the ECB said that its pandemic emergency purchase programme (PEPP) will be increased by €600 billion to a total of €1,350 billion.
“In response to the pandemic-related downward revision to inflation over the projection horizon, the PEPP expansion will further ease the general monetary policy stance, supporting funding conditions in the real economy, especially for businesses and households,” the ECB said.
The timeline for the PEPP program will also be extended until at least June 2021.
Andrew Kenningham, chief Europe economist at Capital Economics said that the latest move by the ECB more than meets market expectations.
“It also does enough to justify the view that euro-zone policymakers have got their act together, for now at least, in responding to the coronavirus crisis,” he said.
Along with the emergency spending measures, the central bank said that its regular asset purchase programme (APP) will continue at a monthly pace of €20 billion, together with the purchases under the additional €120 billion temporary envelope until the end of the year.
The ECB also reiterated that its asset purchase programme will run for as long as the committee deems necessary.
The gold market is not seeing much reaction to the new stimulus measures. August gold Futures last traded at $1,711.20 an ounce, up 0.38% on the day.
U.S. trade gap widens in April masking steep declines in both exports and imports – MarketWatch
The numbers: The U.S. trade deficit widened to $49.4 billion in April from a revised $42.3 billion in the prior month, the Commerce Department said Thursday. Economists polled by MarketWatch had forecast a $49.5 billion shortfall. The wider trade gap masks a significant decline in trade flows from the COVID-19 pandemic.
What happened: Exports fell 20.5% to $151.3 in April. The decline was led by civilian aricraft, crude oil, and autos.
Imports dropped 13% to $200.7 billion. The decline was led by passenger cars, semiconductors and consumer goods including pharmaceutical preparation and apparel.
Exports are down 9.5% year-to-date, while imports are off 10.2%. The U.S. services surplus narrowed $1.3 billion to $22.4 billion.
The trade gap with China widened $9 billion to $26 billion in April.
Big picture: The COVID-19 pandemic has depressed trade flows into and out of the United States, economists said. The wider deficit should depress second-quarter gross domestic product even further. Economists surveyed by MarketWatch are expecting GDP to decline at a 27.2% annual rate in the April-June quarter.
Market reaction: Stocks futures indicated a lower opening on Thursday. Stocks have been on a tear lately. with the Nasdaq Composite
moving to with 2% of its all-time high.
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