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Global shares mixed amid worries on coronavirus, economy – CTV News

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NEW YORK —
Stocks are drifting in mixed trading on Wall Street Friday, as another zig-zag week for markets closes out following their abrupt loss of momentum this month.

The S&P 500 was down 0.1% in morning trading after giving up a small gain in the first few minutes of trading. It’s still on pace for a gain of 0.4% this week after a two-day slump followed up on a two-day gain.

The Dow Jones Industrial Average was virtually flat at 27,901, as of 10:23 a.m. Eastern time, and the Nasdaq composite was up 0.1%. Both were flitting between small gains and losses. Smaller stocks were stronger, with the Russell 2000 index of small caps up 0.8%.

Analysts warned that the day’s trading could be even bumpier than usual. Futures and options on stocks and indexes are set to expire in an event known as “quadruple witching,” which can drive swings in prices.

Stocks have already swirled this week despite the Federal Reserve’s saying it expects to keep short-term interest rates at record lows through 2023. Low rates typically turbocharge the market by encouraging investors to pay higher prices for stocks, but some investors may have been looking for the Fed to be even more aggressive.

Growth in some areas of the economy has also slowed after unemployment benefits and other aid from the federal government expired, and partisan disagreements in Congress are holding up a possible renewal of support. Investors say it’s essential that such aid arrives.

Rising tensions between the world’s two largest economies are also continuing to keep markets on edge. The United States said on Friday that it will ban the downloads of the Chinese apps TikTok and WeChat on Sunday. It cited national security and data privacy concerns.

President Donald Trump’s targeting of the Chinese tech industry has caused intermittent worries in the market about a possible retaliation against the U.S. industry.

Big Tech stocks already stumbled sharply this month on worries that their prices have grown too expensive following their virtuosic performance through the pandemic. Surging shares of Apple, Microsoft, Amazon and others helped carry Wall Street back to record heights, even as the pandemic walloped much of the economy, as the coronavirus accelerated work-from-home and other trends that benefit them.

But they suddenly lost momentum two weeks ago, causing the market to swing with them. Because these companies have grown so massive, their stock movements have huge sway over broad market indexes, such as the S&P 500.

On Friday, several Big Tech stocks were swinging from gains to losses. Apple was down 0.9%, and Microsoft was down 0.5%, but Facebook was up 0.4%.

Also on the long list of concerns for markets is how the pandemic progresses, whether a vaccine for COVID-19 could indeed be available in early 2021 as many investors expect and what November’s U.S. presidential election will do to the economy.

Treasury yields remain very low, showing the powerful strength of the Federal Reserve and continued expectations by bond investors for only modest economic growth and inflation. The yield on the 10-year Treasury dipped to 0.68% from 0.69% late Thursday.

A preliminary report on Friday said that consumer sentiment is improving at a faster pace than economists expected, which is key for an economy where spending by consumers is the main driver. But it follows other reports this week that showed growth in retail sales slowed last month and the number of layoffs across the country remains stubbornly high.

Other stock markets around the world made mostly modest moves.

In Europe, the German DAX lost 0.1%, and the French CAC 40 sank 0.8%. The FTSE 100 in London fell 0.4%.

Asian markets rose. Japan’s Nikkei 225 added 0.2%, South Korea’s Kospi gained 0.3% and Hong Kong’s Hang Seng climbed 0.5%. Stocks in Shanghai rose 2.1%.

Benchmark U.S. crude oil rose 0.7% to $41.26 to per barrel. Brent crude, the international standard, gained 0.3% to $43.41 per barrel.

——

AP Business Writer Yuri Kageyama contributed

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Canadian economy caps strong third quarter before slowdown – BNN

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Canada’s economy recorded what are likely its last strong months of growth in August and September, as the country braces for an end-of-year slowdown.

Gross domestic product expanded 1.2 per cent in August, Statistics Canada said Friday in Ottawa. The agency also released a preliminary estimate for September, which showed a 0.7 per cent expansion — a fifth straight month of historically elevated readings as the economy rebounded from a sharp contraction from the COVID-19 lockdowns.

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With September figures in, the data suggest the economy grew 10 per cent in the third quarter, the agency said, implying about 46 per cent growth on an annualized basis — which would be an all-time high.

“The numbers are solid overall,” David Doyle, an economist at Macquarie Capital Markets, said by email.

But things will get much slower from here. This week the Bank of Canada projected annualized growth of only one per cent in the final three months of the year, and reiterated expectations for a drawn out recovery over the next several quarters.

Canada’s currency appreciated slightly on the report, rising 0.2 per cent to $1.3295 against the U.S. dollar at 9:07 a.m. Toronto time. The yield on government two year bonds was little changed at 0.25 per cent.

The numbers suggest economic activity in September was about 96.1 per cent of output levels in February.

Economists were expecting 0.9 per cent growth in August, according the the median forecast in a Bloomberg survey.

Warmer weather, lower virus counts and mass re-openings encouraged a surge in retail spending between July and September. In addition, pent-up demand for housing led to a boom in construction and real estate in the third quarter.

The September reading is still a “solid starting point” for the fourth quarter, Derek Holt, an economist at Bank of Nova Scotia, said by email. He estimates a fourth-quarter gain of 3.5 per cent annualized, compared with the Bank of Canada’s one per cent estimate.

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Canada's economy grew 1.2% in August as pace of growth cools down – Radio Canada International – English Section

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Statistics Canada says the pace of economic growth slowed in August as real gross domestic product grew 1.2 per cent in the month. (Matt York/THE CANADIAN PRESS/AP)

Canada’s economy grew by 1.2 per cent in August slightly higher than what economists were expecting but significantly slower than in previous months as the pace of economic recovery began losing steam.

In July, Canada’s economy had grown by 3.1 per cent, the national statistics agency said Friday.

Statistics Canada noted that August marked the fourth straight month of growth following the steepest drops on record back in March and April amid pandemic lockdowns.

The economy was expected to grow by further 0.7 per cent in September, according to Statistics Canada’s preliminary estimate.

Both goods-producing and services-producing industries were up as 15 of 20 industrial sectors posted increases and two were essentially unchanged in August, Statistics Canada said.

August saw healthy increases in the public sector, especially in education, professional services, manufacturing and construction, the data agency said.

Accommodation and food services, the hardest hit sectors by the pandemic, also continued their recovery, though at a much slower pace.

However, the mining, quarrying, and oil and gas extraction sector decreased 1.7 per cent in August, Statistics Canada said.

(Statistics Canada)

RBC economist Claire Fan said the economy has retraced around 75 per cent of the losses earlier in spring, but still sits about five per cent below February’s pre-pandemic level.

The bigger concern is how much of that third quarter growth can be sustained beyond September, Fan said.

COVID cases have been on the rise, prompting local governments to re-introduce some containment measures in hotspots, she said.

“The less stringent and more targeted response this time around probably means activity held up much better than it did back in April,” Fan wrote in a research note to clients. “But the economic rebound was already slowing ahead of the virus resurgence, and there is still clearly a risk that broader containment measures could yet be needed.”

Fan said she expects growth in activity for the industrial sector and some services industries like retail and professional services to persist beyond September.

But hospitality industries, alongside the oil and gas sector, will once again face much bigger challenges as demand weakens, she warned.

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Lifted by U.S., Mexico economy rebounds 12% in third quarter from coronavirus – The Journal Pioneer

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By Dave Graham

MEXICO CITY (Reuters) – Mexico’s economy grew 12.0% during the third quarter, largely as expected, making up for much of the record contraction over the previous three months at the height of the coronavirus lockdown, preliminary data showed on Friday.

The seasonally-adjusted jump in gross domestic product (GDP) published by national statistics agency INEGI was fractionally better than the 11.9% expansion predicted by a Reuters poll.

The quarter-on-quarter increase was easily the biggest since current records began at the start of the 1980s, and benefited from massive stimulus spending in the United States.

U.S. demand helped Mexico rack up large trade surpluses during the past four months, as exports picked up speed, especially in the automotive industry. By contrast, domestic demand has lagged, with many businesses still struggling.

Alfredo Coutino, an economist at Moody’s Analytics, said Mexico was still heavily reliant on the U.S. economy, and forecast the recovery would slow in the months ahead.

“The Mexican economy is benefiting from the upturn in the U.S. business cycle, mainly through the U.S. demand for Mexican exports and remittances sent by Mexican migrants working in the U.S.,” Coutino said in a research note.

Between April and June, at the peak of Mexico’s pandemic lockdown, the economy shrank 17.1% from the first quarter.

Mexico has not recovered as quickly as the U.S. economy, which shrank by an annualized rate of 31.4% in the second quarter then jumped by 33.1% in the July-September period.

COMEBACK

Despite the economic chaos of the pandemic, remittances to Mexico have surged this year, and President Andres Manuel Lopez Obrador has forecast they will reach a record $40 billion.

During a regular news conference, Lopez Obrador hailed the GDP figures as evidence the economy was bouncing back.

A breakdown of the data showed primary activities like farming, forestry and fishing advanced by 7.4% compared with the previous quarter. Secondary activities such as manufacturing increased by 22.0%, INEGI said. Meanwhile tertiary activities, which encompass consumer spending and services, climbed 8.6%.

Lopez Obrador was eager to point out that the primary sector, which he has pushed with schemes to boost farming and tree planting, is doing better now than it was a year ago.

Mexico’s economy is forecast to shrink almost 10% in 2020, its deepest annual contraction since the Great Depression.

However, primary activities, which make up only a small part of the economy, were up 2.7% in the first nine months of this year compared with the same period in 2019, INEGI said.

The severest months for the Mexican economy were April and May, when much of business activity ground to a halt, leading to the loss of roughly one million formal jobs. By Oct. 28, more than 400,000 jobs had been recovered, Lopez Obrador said.

Compared with the same period last year, Latin America’s no. 2 economy shrank by 8.6% in unadjusted terms in the third quarter, just less than the Reuters forecast of 8.7%.

Final third quarter data is due to be published on Nov. 26.

(Reporting by Dave Graham; Editing by Hugh Lawson, Chizu Nomiyama and Marguerita Choy)

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