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Dow erases 937-point gain, TSX swings wildly in volatile trading – BNNBloomberg.ca

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4:10 p.m. ET: Dow erases 937-point gain, TSX swings wildly in volatile trading

North American equity markets flatlined to cap off Tuesday’s trade, ending the session mixed after rallying out of the open. The S&P/TSX Composite finished with a modest gain; while the S&P 500, Dow Jones Industrial Average and Nasdaq Composite all finished in the red.

It was a volatile session for the major indices, with the TSX sliding three-and-a-half per cent from peak to trough. The Dow, meanwhile, gave up a 937-point gain that was logged shortly after trading started.

Brian Madden, senior vice president and portfolio manager at Goodreid Investment Management, said he expected investors will be in for plenty of volatile swings until the impact of the virus outbreak shakes out. In an email to BNN Bloomberg, Madden said that volatility will likely be more pronounced at the beginning of the trading week.

“In financial crises, and in volatile markets generally, Mondays have often been gap down days as bad news comes out over the weekend,” he said. “That risk is amplified this week, with the Good Friday holiday making it a three-day weekend, which just allows more time for news to break.”

Crude oil faded badly into the end of the day, with U.S. benchmark West Texas Intermediate falling seven-and-a-half per cent and Alberta’s Western Canada Select settling below US$4 per barrel to plumb near-record lows after sinking 56 per cent Tuesday.

Safe-haven assets fell, with U.S. 10-year bonds slipping, sending yields higher. Gold also lost ground, as it fell about US$10 per ounce at 4 p.m. ET to leave the precious metal trading at US$1,683 per ounce.

The U.S. dollar fell against all of its major peers, resulting in a positive showing for the Canadian dollar, which was trading near 71.50 cents U.S. at 4p.m. ET.

In Toronto, the TSX held in technical bull territory, up more than 20 per cent from the March 23 lows, but strategists have been hesitant to label this the beginning of a sustained upward trend. The composite remains about 24 per cent below February’s peak.

Real estate, consumer discretionary and consumer staples were the lead percentage gainers on the benchmark Canadian index. On a stock-specific basis, Chorus Aviation Inc., and Genworth MI Canada Inc. posted the largest percentage gains. A slate of gold names were among the lead laggards, following the precious metal lower.

Madden said there will likely be more volatility in the weeks to come as earnings season picks up in earnest.

“U.S. corporate earnings releases start next week, and of course the spoiler alert that spoils nothing for anyone is that they will be universally pretty ugly,” he said. “We may be carving out a bottom here, but recovery is unlikely to be immediate or linear.”

1:00 p.m. ET: Equity bounce off lows, oil reverses course

North American markets recouped some of the gains that were lost in mid-morning trading, with the S&P/TSX Composite Index rising more than two per cent and the Dow Jones Industrial Average leading the way south of the border as it advanced approximately three per cent.

In Toronto, 10 of the eleven subgroups were in positive territory, with consumer discretionary, real estate and financials posting the largest percentage gains. Info tech was the only sector on the TSX in negative territory.

On a stock-specific basis, the leaders were a mixed bag in terms of sector membership, with Seven Generations Energy Ltd., Chorus Aviation Inc. and Alaris Royalty Corp. notching the largest percentage gains.

Oil prices gave up their gains, with U.S. benchmark West Texas Intermediate falling nearly a full percent into the afternoon trade, after being solidly in positive territory earlier in the day. Alberta’s Western Canadian Select fared far worse, with Canadian crude prices falling more than 30 per cent to trade just shy of US$6 per barrel.

10:40: North American equity markets pare gains into mid-morning

North American equity markets pared some of their early gains into the mid-morning, but remained in positive territory. The S&P/TSX Composite Index was the strongest performer, rising nearly two-and-a-half per cent; the S&P 500 and Dow Jones Industrial Average rose more than one-and-a-half per cent; and the tech-heavy Nasdaq Composite advanced about one per cent.

In Toronto, nine of the 11 TSX subgroups were in positive territory, with consumer discretionary, real estate and financials leading the index on a percentage basis. Info tech and materials were the only sectors underwater.

Crude oil hung onto its gains, with U.S. benchmark West Texas Intermediate up about two per cent.

9:40 a.m. ET:

North American equity markets rallied in early trading, with the S&P/TSX Composite Index rising a little more than two per cent, and the S&P 500, Dow Jones Industrial Average and Nasdaq Composite all notching gains of more than two-and-a-half per cent, extending yesterday’s gains.

Risk assets like equities have been climbing amid cautious optimism over the slowing growth of COVID-19 cases across the globe.

The Canadian dollar was up nearly a full per cent against its U.S. counterpart, rising above 71.50 cents U.S., though the greenback was exhibiting weakness against all of its major peers.

Oil gained some ground in early trading, with U.S. benchmark West Texas Intermediate rising modestly on speculation Saudi Arabia and Russia might be able to reach a truce in their price war. Alberta’s Western Canadian Select was little changed, though WCS is only priced a handful of times per day. The OPEC+ group is expected to meet to discuss potential curtailments Thursday.

While Toronto’s benchmark index has risen more than 20 per cent from its March 23 low, putting the composite in a technical bull market, some market watchers are warning investors against becoming too optimistic about the trajectory.

In a note to clients, Rosenberg Research and Associates chief economist and markets strategist David Rosenberg said the rally does not carry the hallmarks of a true bull run.

“From my lens, what we are seeing unfold this week in equities is a classic bear market rally. It is not the start of a new bull market,” he said. “This run-up is purely speculative, nothing fundamental behind it, and we can see that volumes have been way below average which tells you that there is not a very high conviction level —nor should there be.”

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Telus prioritizing ‘most important customers,’ avoiding ‘unprofitable’ offers: CFO

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Telus Corp. says it is avoiding offering “unprofitable” discounts as fierce competition in the Canadian telecommunications sector shows no sign of slowing down.

The company said Friday it had fewer net new customers during its third quarter compared with the same time last year, as it copes with increasingly “aggressive marketing and promotional pricing” that is prompting more customers to switch providers.

Telus said it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers, down 30,000 and 3,000, respectively, year-over-year.

The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.09 per cent in the third quarter, up from 1.03 per cent in the third quarter of 2023. That included a postpaid mobile phone churn rate of 0.90 per cent in its latest quarter.

Telus said its focus is on customer retention through its “industry-leading service and network quality, along with successful promotions and bundled offerings.”

“The customers we have are the most important customers we can get,” said chief financial officer Doug French in an interview.

“We’ve, again, just continued to focus on what matters most to our customers, from a product and customer service perspective, while not loading unprofitable customers.”

Meanwhile, Telus reported its net income attributable to common shares more than doubled during its third quarter.

The telecommunications company said it earned $280 million, up 105.9 per cent from the same three-month period in 2023. Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.

It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year. Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.

Mobile phone average revenue per user was $58.85 in the third quarter, a decrease of $2.09 or 3.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.

It said customers are increasingly adopting unlimited data and Canada-U.S. plans which provide higher and more stable ARPU on a monthly basis.

“In a tough operating environment and relative to peers, we view Q3 results that were in line to slightly better than forecast as the best of the bunch,” said RBC analyst Drew McReynolds in a note.

Scotiabank analyst Maher Yaghi added that “the telecom industry in Canada remains very challenging for all players, however, Telus has been able to face these pressures” and still deliver growth.

The Big 3 telecom providers — which also include Rogers Communications Inc. and BCE Inc. — have frequently stressed that the market has grown more competitive in recent years, especially after the closing of Quebecor Inc.’s purchase of Freedom Mobile in April 2023.

Hailed as a fourth national carrier, Quebecor has invested in enhancements to Freedom’s network while offering more affordable plans as part of a set of commitments it was mandated by Ottawa to agree to.

The cost of telephone services in September was down eight per cent compared with a year earlier, according to Statistics Canada’s most recent inflation report last month.

“I think competition has been and continues to be, I’d say, quite intense in Canada, and we’ve obviously had to just manage our business the way we see fit,” said French.

Asked how long that environment could last, he said that’s out of Telus’ hands.

“What I can control, though, is how we go to market and how we lead with our products,” he said.

“I think the conditions within the market will have to adjust accordingly over time. We’ve continued to focus on digitization, continued to bring our cost structure down to compete, irrespective of the price and the current market conditions.”

Still, Canada’s telecom regulator continues to warn providers about customers facing more charges on their cellphone and internet bills.

On Tuesday, CRTC vice-president of consumer, analytics and strategy Scott Hutton called on providers to ensure they clearly inform their customers of charges such as early cancellation fees.

That followed statements from the regulator in recent weeks cautioning against rising international roaming fees and “surprise” price increases being found on their bills.

Hutton said the CRTC plans to launch public consultations in the coming weeks that will focus “on ensuring that information is clear and consistent, making it easier to compare offers and switch services or providers.”

“The CRTC is concerned with recent trends, which suggest that Canadians may not be benefiting from the full protections of our codes,” he said.

“We will continue to monitor developments and will take further action if our codes are not being followed.”

French said any initiative to boost transparency is a step in the right direction.

“I can’t say we are perfect across the board, but what I can say is we are absolutely taking it under consideration and trying to be the best at communicating with our customers,” he said.

“I think everyone looking in the mirror would say there’s room for improvement.”

This report by The Canadian Press was first published Nov. 8, 2024.

Companies in this story: (TSX:T)

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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