Global markets dive as the US ratchets up tensions with China over the coronavirus - Business Insider | Canada News Media
Connect with us

Business

Global markets dive as the US ratchets up tensions with China over the coronavirus – Business Insider

Published

 on


Reuters

  • Stocks fell across the board on Monday after the US ramped up tensions with China and continued to blame the origin of the coronavirus on a lab in the city of Wuhan.
  • Although markets were closed in China and Japan Monday, stocks in Hong Kong plunged, aided by news that the territory’s economy shrank by almost 9% in the first quarter of the year.
  • European stocks also dropped, with the pan-European Stoxx 50 losing 3.5% by early morning US time.
  • “If Trump continues with this stance of blaming China and remains determined to punish Beijing for this — as per his recent narrative— a “Mayday” type of situation could be the likely outcome for the global economy,” one analyst said.
  • Follow global market moves live with Markets Insider.

Stocks fell on Monday as tensions between the US and China ratcheted back up after senior Trump administration officials claiming that the coronavirus pandemic originated in a lab in Wuhan, and the president sent numerous anti-China tweets.

Asian markets fell first, with Hong Kong’s Hang Seng index down more than 4% at the close Monday.

European stocks followed suit, having opened higher but fell in the early hours of trading, with major indexes dropping as much as 4.5% in early trade. Most continental European markets were shut last week on Friday to celebrate Labor Day.

The negative sentiment comes as the US increasingly looks to place the burden of blame for the spread of the coronavirus on China, with one analyst noting that President Trump is likely to “beat on the Chinese as hard as he can without actually going to war.”

Here’s the market roundup as of 12.55 p.m. BST (7.55 a.m. ET):

  • Several Asian indexes fell sharply, with Hong Kong’s Hang Seng down 4%, South Korea’s KOSPI down 2.7%. Chinese stock markets remained closed, as did the Nikkei in Japan. Hong Kong’s economy shrank by almost 9% in the first quarter of 2020, compounding losses for the Hang Seng.
  • European equities broadly fell. Germany’s DAX was down 3.4%, the broad Euro Stoxx 50 down 3.5% and France’s CAC 40 down 3.8%. Britain’s FTSE 100 was relatively strong comparatively, down just 0.1%.
  • US stocks are poised for a lower open. Futures underlying the Dow Jones Industrial Average fell 0.9%, the S&P 500 fell 0.6% and the Nasdaq fell 0.5%, rallying from losses of more than 1% earlier in the day.
  • Oil prices fell with West Texas Intermediate down 2.7% at $19.27, and Brent crude down 0.6% at $26.27. WTI had been down 7% earlier in the day.
  • Gold rose 0.9% to $1,717 per ounce.
  • Bitcoin fell about 4% to roughly $8,685. 

US-China tensions ramp up

Markets fell after US Secretary of State Mike Pompeo said told ABC on Sunday “there is enormous evidence” that the coronavirus pandemic originated in a lab in the city of Wuhan.

“We said from the very beginning this is a virus that originated from Wuhan China. We took a lot of grief for that from the outset but I think the whole world can see that now,” Pompeo said.

Pompeo’s allegations were the latest in a series of anti-China statements from White House officials, as the administration looks to apportion blame for the pandemic.

Reuters reported on Monday the Trump administration is looking to remove global supply chains from China as it weighs the possibility of imposing fresh tariffs on China to penalize the country for its handling of the pandemic. 

Analysts were quick to note the impact the tensions are having on global markets. 

Naeem Aslam, chief market analyst at Avatrade, said: “If Trump continues with this stance of blaming China and remains determined to punish Beijing for this — as per his recent narrative— a “Mayday” type of situation could be the likely outcome for the global economy.”

Read more: GOLDMAN SACHS: Buy these 13 stocks primed to keep delivering powerful dividends as their peers are forced to slash payouts. 

Neil Wilson, market analyst at Markets.com, said: “Whilst monetary and fiscal stimulus sustained a strong rally through April – the best monthly gain for Wall Street since 1987 – it’s harder to see how it can continue to spur gains for equity markets.”

Wilson added: “This is an election year so I’d expect Trump to beat on the Chinese as hard as he can without actually going to war. Trade Wars 2.0 will be worse than the original.”

But Aslam thinks the possibility of having a vaccine by the end of the year could offset any market impact from US-China tensions. 

“If the possibility of having a vaccine became a reality by the end of this year, it would surely support market optimism.”

Gilead’s experimental antiviral called remdesivir was approved for emergency use in the US on Friday, after a trial showed patients on the drug recovered 31% faster compared to patients who were put on a placebo. 

“This is because it reduces the chances of a second-coronavirus wave having the same detrimental impact on the global economy as the first one,” Aslam said.

Analysts point to a rise in gold prices

Reuters / Pascal Lauener

Aslam said ongoing tensions could increase the demand for gold, another safe-haven asset. 

“The safe-haven bet, buying gold, is back in demand and the price of the shining metal is trading higher today. Given the fact that tensions have resurfaced between the US and China, investors are likely to play safe and include gold in their portfolios.”

He added: “Fear of trade war usually pushes investors towards safety bets and gold sits at the top of this ladder. No one wants to see a hostile situation surging but the US officials are on course to play with fire.”

Losses were also seen in both the US and international oil markets, after they had recovered last week following days of volatility. 

Read more: Warren Buffett discussed bailouts, coronavirus, and selling airline stocks at Berkshire Hathaway’s annual meeting. Here are the highlights.

After dropping into negative territory two weeks ago, oil has remained volatile, although prices have risen in recent days. Concerns, however, are mounting that the June oil contract could turn negative the closer it moves to expiration. 

Aslam said: “Investors are concerned about the storage issues despite the fact that we have seen some serious voluntary production cut by the US Shale oil producers over the last week. The possibility of an intense sell-off of West Texas Crude remains a possibility.”

Let’s block ads! (Why?)



Source link

Business

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

Published

 on

 

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)

Source link

Continue Reading

Business

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

Published

 on

 

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)

The Canadian Press. All rights reserved.

Source link

Continue Reading

Business

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

Published

 on

 

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)

The Canadian Press. All rights reserved.

Source link

Continue Reading

Trending

Exit mobile version