TORONTO —
Major North American indexes continued to plunge Thursday as news of large-scale cancellations failed to ease investors’ concerns about the spread of the novel coronavirus pandemic.
“This is an unprecedented fall,” said Allan Small, senior investment adviser at HollisWealth, who has been working in the investment world for almost 25 years.
“I have never seen the velocity of this fall as steep or quick as it is.”
The S&P/TSX composite index plummeted 1,761.64 points, or 12.34 per cent, to 12,508.45 with every sector in the red and just above a daily low of 12,451.12 points.
In New York, the Dow Jones industrial average dropped 2,352.60 points, or 9.99 per cent, to 21,200.62. That’s the worst day for the index since a nearly 23 per cent drop on Oct. 19, 1987.
The S&P 500 index shed 260.74 points, or 9.51 per cent, to 2,480.64. That’s a total drop of 26.7 per cent from its all-time high set just last month, well past the threshold for a bear market. It snaps an unprecedented nearly 11-year bull-market run.
The Nasdaq composite fell by 750.25 points, or 9.43 per cent, to 7,201.80.
The collapse in Toronto and on U.S. markets at the start of trading was large enough to trip circuit breakers that forced a pause in trading.
Stock markets had been under pressure in recent weeks amid concerns about the spread of COVID-19, however losses picked up this week after Saudi Arabia moved to boost oil production in a price war with Russia.
European markets did not fare well either. They lost 12 per cent in one of their worst days ever.
The market is trying to determine how much companies are worth, said Small.
“It doesn’t know because we don’t know how long this virus will linger and how long it will have an impact on business,” he said.
On Wednesday, investors hoped U.S. President Donald Trump “would give us something to hang out hats on,” but his prime-time address disappointed Wall Street, said Small.
Trump announced travel restrictions on Europe that aim to limit the virus from spreading and hinted at plans for tax cuts and other economic relief, but did not provide details.
Small said investors need to hear that the government is here to help and no business will be left behind during the outbreak.
Even gold, normally considered a safe haven for investors during tumultuous times, plummeted. The April gold contract declined by US$52.00 to US$1,590.30 an ounce.
For individual investors watching the balance of their RRSPs, TFSAs or other accounts dwindle, Small said: “take a deep breath.”
For those who can’t stand the dramatic drops, he said, there is the option to pull their money out of the market. Though, he cautioned, he believes that would be a mistake.
The other choice, Small said, is to stay in the market, avoid looking at their portfolio for several weeks and wait for a rebound.
He notes these choices do depend on each investor’s investment horizon and other factors.
The only positive today, said Small, is that there is no positive.
“The positive could be maybe we’re finally at a bottom. I don’t know if it’s exactly today, but maybe it’s somewhere around here.”
The Canadian dollar traded for 72.36 cents US compared with an average of 72.75 cents US on Wednesday.
Elsewhere in commodities, the April crude contract fell US$1.48 to US$31.50 per barrel and the April natural gas contract shed 3.7 cents to US$1.841 per mmBTU. The May copper contract dropped by nearly 3 cents to roughly US$2.47 a pound.
This report by The Canadian Press was first published March 12, 2020.
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.
