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Canadian Stocks Surge Record 12% as Momentum Builds for Stimulus – Yahoo Canada Finance

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Canadian Stocks Surge Record 12% as Momentum Builds for Stimulus

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(Bloomberg) — Canadian stocks soared the most in at least 43 years, joining a global rally on hopes government stimulus will soon flow to economies hammered by the coronavirus.

The S&P/TSX Composite Index rose 12% on Tuesday, the biggest one-day percentage jump since at least 1977 when the index’s predecessor began. South of the border, stocks boomed with the Dow Jones Industrial average posting its best day since 1933 as a U.S. stimulus bill of about $2 trillion inches forward.

Investors had been searching for buying opportunities amid the brutal sell-off but volatility has made it difficult to call a bottom on the stocks. The Canadian market is still down about 30% from its February peak.

“We had cash going into this period, and I have been investing it as the market has been going down,” said Whitney George, chief investment officer of Sprott Asset Management. “I have been reinvesting the proceeds incrementally as the market keeps dropping.”

Gold’s spot price was up about 5% and silver more than 6% on Tuesday, giving a boost to mining stocks. The spending package by the U.S. government caused Goldman Sachs to predict an “inflection point” for gold and the bank is recommending its clients buy now.

Canada’s economic heartland is shutting down to fight the virus outbreak. Ontario and Quebec, which together account for about 57% of the country’s economy, have ordered non-essential businesses to close by the end of today. Nearly one million Canadians applied for jobless claims last week, representing almost 5% of the labor force, according to a senior government official with knowledge of the data.

Debate on Prime Minister Justin Trudeau’s C$82 billion ($57 billion) stimulus package is stalled as parties negotiate the terms in a minority parliament.

Within the energy patch, record low prices for heavy Canadian crude have prompted one of the biggest operators in the oil sands to take the rare step of shutting production. Motivated by the “extremely low” prices, Suncor Energy Inc. announced on Tuesday that it will shut in one of its two so-called trains at its two-year-old, 194,000 barrel a day Fort Hills oil sands mine.

Bombardier Inc. said it will suspend all non-essential work at most Canadian-based operations tonight until April 26 to comply with government mandates to help slow the spread of Covid-19.

Sprott’s George is keeping a positive outlook for the market despite all the volatility. “Looking ahead, I am confident that markets and the economy will bounce back as they have had in the past,” he said.

Commodities

Western Canada Select crude oil traded at a $15.00 discount to West Texas IntermediateSpot gold rose about 4.7% to $1,626.15 an ounce

FX/Bonds

The Canadian dollar was little changed at C$1.4487 per U.S. dollarThe 10-year government bond yield rose about 8 basis points to 0.873%

(Updates with closing prices.)

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China shows strong factory activity in March – MarketWatch

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BEIJING–An official gauge of China’s manufacturing activity rebounded strongly in March as factory production resumed after the coronavirus epidemic was largely put under control in the country.

The official manufacturing purchasing managers’ index rose to 52.0 in March from a record low of 35.7 in February, the National Bureau of Statistics said Tuesday. The 50 mark separates expansion of activity from contraction.

The March result came in above the median forecast of 51.5 by economists surveyed by The Wall Street Journal. Purchasing by manufacturers is a leading indicator of business activity because factories buy supplies in anticipation of demand.

The statistics bureau said the reading only reflects work resumption from February and it doesn’t mean China’s economic activity has returned to normal.

The production subindex climbed to 54.1 from 27.8 in February. The new-export-orders subindex, a gauge of external demand, rose to 46.4 in March from 28.7 in February. The subindex measuring imports increased to 48.4 from February’s 31.9.

The government has rolled out a slew of measures to help factories resume production and retain workers, including offering tax cuts and cash returns. The People’s Bank of China on Monday lowered a key interest rate in the country’s interbank market, the latest effort by Beijing to restart an economy struggling to recover due to the coronavirus.

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Most actively traded companies on the TSX – Yahoo Canada Finance

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TORONTO — Some of the most active companies traded Monday on the Toronto Stock Exchange:

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Toronto Stock Exchange (13,038.50, up 350.76 points.)” data-reactid=”13″>Toronto Stock Exchange (13,038.50, up 350.76 points.)

Bombardier Inc. (TSX:BBD.B). Industrials. Down three cents, or 6.59 per cent, to 42.5 cents on 17.5 million shares.

Suncor Energy Inc. (TSX:SU). Energy. Up $2.54, or 15.46 per cent, to $18.97 on 15.6 million shares.

Canadian Natural Resources Ltd. (TSX:CNQ). Energy. Up $2.40, or 18.02 per cent, to $15.72 on 15.5 million shares.

Aurora Cannabis Inc. (TSX:ACB). Health care. Down 17 cents, or 11.64 per cent, to $1.29 on 15.2 million shares.

Cenovus Energy Inc. (TSX:CVE). Energy. Up six cents, or 2.55 per cent, to $2.41 on 11.4 million shares.

MEG Energy Corp. (TSX:MEG). Energy. Up 27 cents, or 22.13 per cent, to $1.49 on 11.4 million shares.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Companies in the news:” data-reactid=”20″>Companies in the news:

Transat AT. (TSX:TRZ). Down 74 cents or 7.8 per cent, to $8.75. The Competition Bureau’s warning about Air Canada’s proposed takeover of Transat AT Inc., which owns Air Transat, should be taken in context, analysts say. The watchdog said Friday that eliminating the rivalry between the two Montreal-based carriers would discourage competition by prompting higher prices and fewer services. Desjardins Securities analyst Benoit Poirier said he believes the purchase will still be approved “considering the companies’ willingness to address the bureau’s competition concerns,” such as potential dominance of airport slots.

Canadian Imperial Bank of Commerce (TSX:CM). Up $1.33 to $79. An Ontario Superior Court judge has ruled against the CIBC in an overtime class-action lawsuit filed more than a decade ago. Judge Edward Belobaba found the bank liable for breaching its overtime obligations to a class of about 31,000 current and former tellers, personal bankers and other front-line workers in branches across Canada.

Canadian Apartment Properties Real Estate Investment Trust. (TSX:CAR.UN). down 23 cents to $41.90. Some of Canada’s biggest landlords say they’re committed to working with tenants who have lost their job because of the coronavirus pandemic. Mark Kenney, CEO of Canadian Apartment Properties Real Estate Investment Trust, says the company is committed to working with those who have suddenly lost their job, and is “violently against” evicting anyone who’s in distress.

Freshii Inc. (TSX:FRII). Down one cent to $1.23. Freshii Inc. is delaying the filing of its latest financial results as it deals with the COVID-19 pandemic and its impact on its restaurants and franchise partners. The company says it has also temporarily “streamlined its head office workforce” in a move to cut costs. It did not say how many people were affected. Freshii says the COVID-19 pandemic is expected to have a material impact on its business, operations and financial performance for at least the first half of 2020.

Parkland Fuel Corp. (TSX:PKI). Up 85 cents or 3.5 per cent to $25.05. Parkland Fuel Corp. is cutting its 2020 capital spending budget by 52 per cent and trimming executive salaries in response to the uncertain economic impact of the novel coronavirus. The Calgary-based company, which sells fuel through more than 2,600 service stations throughout Canada and in the United States and Caribbean, says it plans to spend $275 million this year, down from its earlier guidance of $575 million.

Air Canada (TSX:AC). Down 67 cents or four per cent to $1608. Air Canada will temporarily lay off more than 15,000 unionized workers beginning this week as the airline struggles with fallout from the COVID-19 pandemic. The layoffs will continue through April and May amid drastically reduced flight capacity from the Montreal-based airline. Air Canada says the two-month furloughs will affect about one-third of management and administrative and support staff, including head office employees, in addition to the front-line workers.

This report by The Canadian Press was first published March 30, 2020.

The Canadian Press

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Air Canada To Furlough 16,500 Employees And Slash Capacity – Simple Flying

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From April 3rd, Air Canada will furlough 16,500 employees. This comes as the airline slashes capacity by 85-90% and faces the unprecedented COVID-19 pandemic.

Air Canada is furloughing 16,500 employees. Photo: Air Canada

Air Canada to furlough 16,500 staff

From April 3rd, Air Canada announced that it will have to furlough employees due to the “unprecedented impact of COVID-19.” This will include 15,200 of its unionized workforce moving to “Off Duty Status” while another 1,300 managers will face a furlough. These are temporary measures according to the airline. Although, given the fluctuating nature of the situation, it is really anyone’s best guess when Air Canada will return to full operations.

President and CEO Calin Rovinescu had the following comment on the situation:

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“The unpredictable extent and duration of the Covid-19 pandemic requires a significant overall response.  To furlough such a large proportion of our employees is an extremely painful decision but one we are required to take given our dramatically smaller operations for the next while.”

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Air Canada staff
The furlough is intended to be temporary. Photo: Air Canada

In addition to these furloughs, Air Canada is taking other steps. It ended the share repurchase program on March 2nd, engaged in company-wide cost reduction and capital deferral program which saves about $500 million CAD, drawing down operating lines of credit to the tune of $1 billion CAD, and cutting salaries of executives. The CEO and Deputy CEO will cut their salaries by 100% while the Board of Directors will cut theirs by 25%. Senior Executives will cut 25-50% of their salary. Meanwhile, Air Canada managers will cut their salaries by 10% for the entire second quarter.

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In addition to the furloughs, Air Canada is taking other steps to preserve its cash. Photo: Air Canada

Significant capacity reductions at Air Canada

Amid the ongoing crisis, Air Canada will cut its capacity in the second quarter of 2020 by 85-90% compared to operations in the same time last year. With so few flights operating, it makes sense for Air Canada to furlough some staff until capacity can be restored.

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In response to the crisis, operations have taken a huge hit. Photo: Air Canada

Repatriation flights

However, one place where Air Canada has been a leader in Canada is repatriation flights. The airline has devoted a number of resources to bringing Canadians home from abroad.

Air Canada crew
The Air Canada crew which operated a rescue flight from Casablanca. Photo: Air Canada

In the coming days, the flag carrier will likely work with the Canadian government to issue more repatriation flights. Organizing these flights have a lot of pieces. Governments have to coordinate to bring citizens to and from airports, the airline has to schedule crews and implement cleaning and sanitation procedures, and health agencies have to monitor and work with the passengers coming home in order to reduce the spread of COVID-19.

Overall

For 16,500 Air Canada employees, this cannot be an easy time. The situation is incredibly fluid and it is unclear how long these furloughs will last and whether more will be necessary as the airline seeks to survive with significantly reduced operations.

What do you make of Air Canada’s furloughs? Let us know in the comments!

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