North American equity markets sank deeper into the red to end the first day of the second quarter, settling near session lows. Toronto’s benchmark S&P/TSX composite Index fell nearly four per cent, while the S&P 500, Dow Jones Industrial Average and Nasdaq Composite all dropped about four-and-a-half per cent amid concerns over the impact of the COVID-19 outbreak.
In Toronto, 10 of the 11 subgroups finished the session in negative territory, with safe-haven gold names helping the materials subgroup buck the trend. The healthcare, utilities and energy sectors on the TSX posted the biggest declines.
Lightspeed POS Inc., which provides point-of-sale software for retailers, cannabis producer Hexo Corp. and BlackBerry Ltd. – which declined to provide a financial forecast for this fiscal year in the face of the virus outbreak – and were the lead laggards on the TSX.
Gold producers dominated the list of leaders, with Kinross Gold Corp., IAMGold Corp. and Pretium Resources Inc. posting the largest percentage gains.
Crude prices had a volatile day, with U.S. benchmark West Texas Intermediate seesawing between positive and negative territory amid global economic growth concerns, the end of the OPEC+ curtailment agreement, the oil price war between the Saudis and the Russians and the massive 13.8 million barrel inventory build the U.S. reported Wednesday. WTI kept close to US$20 per barrel, rising a little more than one per cent at 4 p.m. ET. Western Canadian Select rose modestly, but is still trading at about $5 per barrel.
The Canadian dollar had another down day against its U.S. counterpart, falling to the low 70-cent U.S. level.
12:40 p.m. ET: North American equities fade, near session lows
North American equity markets fell to near-session lows in the early afternoon after initially paring their losses. The S&P/TSX composite index, S&P 500, Dow Industrials and Nasdaq all fell more than three per cent in early afternoon trading as the COVID-19-induced pain of the first quarter extended into the second.
In Toronto, shares of BlackBerry Ltd. fell back into a double-digit sell-off, making the company one of the worst-performing stocks on Canada’s benchmark index Wednesday. South of the border, Carnival Corp. was the lead laggard on the S&P 500 after the company cancelled some cruises through the end of the year due to the virus outbreak.
U.S. benchmark oil West Texas Intermediate hovered around US$20 per barrel after the massive crude inventory buildup. The Canadian dollar slid against its U.S. counterpart to the low 70-cent U.S. range.
10:50 a.m. ET: North American equity markets pare losses in mid-morning
North American equity markets pared some of their early losses by mid-morning but remained firmly in negative territory amid concerns over the fallout of the COVID-19 virus. The S&P/TSX composite index, S&P 500, Dow Industrials and the Nasdaq were all down more than two per cent after falling more than three per cent at the opening bells.
In Toronto, 10 of the 11 subgroups were trading lower, with the materials group bucking the trend. Real estate, health care and utilities were the lead laggards.
BlackBerry Ltd. clawed back some ground with shares down about nine per cent after an initial 16 per cent plunge. Shares of Teck Resources Ltd. recovered entirely, entering positive territory. Shares of Dollarama Inc. remained modestly negative.
Oil prices dipped in the wake of a massive U.S. inventory buildup that exceeded even the highest estimate, with stockpiles rising 13.83 million barrels last week. Economists surveyed by Bloomberg had a median estimate of a 3.3 million barrel build. Though prices fell, benchmark West Texas Intermediate crude remains in the US$20 per barrel range.
9:33 a.m. ET Markets Open: ‘Grim reality’ as equity markets fall to start second quarter
Global equity markets kicked off the year’s second quarter in negative territory on Wednesday after a disastrous first quarter. The S&P/TSX composite index, S&P 500, Dow Industrials and Nasdaq indices all fell more than three per cent in early trading, following a decline in European markets.
Investors are weighing the ongoing impact of the COVID-19 as virus outbreak as cases in the United States continue to climb. U.S. President Donald Trump said Tuesday that Americans should brace for a “painful two weeks” as officials forecast hundreds of thousands of deaths in total due to the virus.
In Europe, a string of Purchasing Managers’ Indexes were deep in contraction territory. The U.K.’s big banks, including HSBC Holdings Plc and Barclays Plc, axed dividend payments and share buybacks, sending the European banks index lower.
Crude oil prices had a volatile morning amid those economic concerns, the expiration of the OPEC+ production curtailment agreement and the ongoing price war between Saudi Arabia and Russia. Saudi Arabia’s production surged to more than 12 million barrels per day, though Russia said it would not boost output.
In Toronto, it was another day of companies shelving their forecasts in the wake of the uncertainty caused by the virus.
Teck Resources Ltd. suspended its full-year guidance and announced it has put construction activity at its QB2 project in Chile on hold, with no certainty on the timeline to resume construction. Shares fell more than seven per cent at the open of trading on Wednesday.
Dollarama Inc. suspended its fiscal 2021 outlook, telling investors it’s “impossible to forecast the impact of the pandemic on the Canadian economy.” The discount retailer said sales slowed through the end of last month due to social distancing efforts after an initial surge in February and early March, sending the stock modestly lower.
BlackBerry Ltd. warned of a tough first quarter and declined to offer a full-year forecast in the face of the outbreak, with CEO John Chen telling investors it wasn’t prudent to offer a view in light of the uncertainty. BlackBerry was one of the worst performing stocks on the TSX in early trading, trading down 16 per cent.
A&W Revenue Royalties Income Fund announced it is suspending distributions to shareholders, and disclosed 200 of its restaurants are temporarily closed and that traffic is down significantly at those that remain open.
While the damage has been widespread through the first quarter of 2020, markets veteran David Rosenberg is warning the worst is yet to come. In a note to clients, Rosenberg, the chief economist and strategist at Rosenberg Research and Associates, said investors should brace for further downside.
“It is a brutal session today across most risk-assets —rather incredible when you think of the massive amounts of firepower unleashed by global monetary and fiscal policymakers,” he said.
“A grim reality is that we are only now about to enter the eye of the storm and the 22 per cent plunge in global equities —the worst performance since 2008 —was actually just an appetizer despite all the proclamations from Wall Street pundits that the lows had been turned in.”
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
