4:15 p.m. ET: North American markets fall, close near session lows
North American equity markets closed lower in Tuesday’s trade, erasing much of the gains from Monday’s rally. The S&P/TSX Composite Index fell 0.47 per cent, the S&P 500 dropped 1.08 per cent, the Dow Jones Industrial Average declined 1.51 per cent and the Nasdaq Composite Index shed 0.86 per cent of its value.
The selloff accelerated into the closing hour of trading, after the major North American markets were largely mixed through midday. The declines marked the first negative showing for the S&P 500 in six trading sessions, with the broad-market benchmark snapping its longest winning streak of the year.
U.S. markets were led lower by stocks seen as sensitive to the prospects for a global economic reopening, with airlines, hotel operators and cruise line stocks posting losses. Boeing Co. on its own erased 62 points from the Dow with its 4.77 per cent drop.
In Toronto, nine of the 11 TSX subgroups finished in negative territory, with consumer discretionary, financials and health care posting the largest declines. Only materials and information technology closed the day higher.
160 of the composite’s 221 individual constituents closed out the session lower, with Enerplus Corp. and Seven Generations Energy Ltd. notching the largest percentage declines.
Oil prices retreated modestly, with U.S. benchmark West Texas Intermediate falling 0.74 per cent to US$40.33 per barrel and Alberta’s Western Canadian Select down 0.39 per cent to US$33.08 per barrel.
The Canadian dollar slipped against its American counterpart, falling four-tenths of a cent to 73.48 cents U.S.
12:00 p.m. ET: North American markets mixed, Nasdaq on track for new record
North American equity markets were mixed entering the Tuesday afternoon session, with the S&P/TSX Composite up about 0.2 per cent, the S&P 500 trading essentially flat, the Dow Jones Industrial Average down 0.7 per cent and the tech-heavy Nasdaq Composite Index up half a per cent.
Gains made in technology stocks had the Nasdaq on track to post a new record closing high, as heavyweights including Apple Inc., Facebook Inc. and Microsoft Corp. pushed the index higher.
The underperformance of the Dow was in no small part due to a 3.6 per cent decline in shares of Boeing, which took 46 points off the average on its own. Shares in the U.S. planemaker fell amid broad-based weakness in airline and hotel stocks amid concerns the surging U.S. COVID-19 case count could lead to another clampdown on gradual economic reopenings.
In Toronto, six of the 11 TSX subgroups were in negative territory, led lower by financials, health care and consumer discretionary stocks. Information technology, materials and industrials were the top performers.
Just over half of the composite’s 221 individual constituents were lower, with Enerplus Corp and Air Canada posting the largest percentage declines.
Oil prices pushed modestly higher, with U.S. benchmark West Texas Intermediate rising half a per cent to US$40.83 per barrel. Alberta’s Western Canadian Select gained 0.63 per cent to US$33.42 per barrel.
The Canadian dollar continued to lose ground against its American counterpart, shedding a quarter of a cent to trade at 73.61 cents U.S.
9:40 a.m. ET: North American markets slip, give back some of Monday’s rally
North American equity markets slid in early trading Tuesday, paring some of the gains made in Monday’s rally.
The S&P/TSX Composite Index fell about half a per cent, the S&P 500 declined 0.6 per cent, the Dow Jones Industrial Average dropped 0.75 per cent and the Nasdaq Composite Index slipped a modest 0.3 per cent.
The S&P 500 is on track to snap its five-day string of gains, the longest winning streak for the index since December as investors weigh the impact of global economic reopenings against a surge of new COVID-19 cases in the United States.
Traditional safe-haven assets rose following Monday’s declines, with a measure of the U.S. dollar and U.S. Treasuries both posting modest gains.
In Toronto, all eleven TSX subgroups opened the day in negative territory, led lower by energy, financials and healthcare stocks.
Crude oil gave up ground, with U.S. benchmark West Texas Intermediate down 0.7 per cent to US$40.36 per barrel. Alberta’s Western Canadian Select posted a similar decline, falling 0.66 per cent to US$32.99 per barrel.
The Canadian dollar fell two-tenths of a cent against its American counterpart to 73.64 cents U.S.
Dividend Stocks: 2 Telecom Giants to Watch – The Motley Fool Canada
While stocks have been creeping higher recently, some can still be had for good value. In particular, many TSX dividend stocks are offering investors good long-term investment opportunities.
However, it’s crucial for investors to differentiate between a good deal and a sinking ship. And it’s therefore vital to inspect these stocks for any worrying signs that could harm their growth going forward.
After all, sometimes a great yield at a great price is unfortunately just a way for an ailing stock to attract investors. So, investors need to be mindful to avoid these traps and seek out quality dividend stocks.
Today, we’ll look at two TSX telecom giants that are offering solid dividends to go with strong market resiliency.
Through its various subsidiaries, the company offers a wide range of products and services including mobile phone, landline, TV, media and entertainment, and more.
As a TSX dividend stock, it offers investors great value. As of this writing, the stock is trading at $56.49 and yielding 5.89%. Given that the five-year average yield is only 4.97%, investors can lock in an out-sized yield with BCE.
While business has lagged, the damage has been minimal. Year-over-year quarterly revenue growth is sitting at -0.9% for a period where many stocks posted negative figures in the double digits.
The payout ratio for this dividend stock has been creeping higher but still sits at a manageable level as well.
Plus, the impending 5G network release should bode well for BCE’s wireless division as it looks to continue being an industry leader.
Rogers Communications (TSX:RCI.B)(NYSE:RCI) is a large Canadian communications and media company. It offers customers mobile phone, TV, internet, and media services.
Now, there’s no question Rogers has been hit hard recently with year-over-year quarterly revenue growth coming in at -16.5%. Despite this, its payout ratio of 51.41% means the dividend yield should be more than safe.
This dividend stock also still sports a solid profit margin with the resiliency to combat market forces, as many of its services are non-cyclical in nature.
As of this writing, this dividend stock is trading at $55.68 and yielding 3.59%. With a five-year average yield of 3.26%, the yield on offer should still be attractive to investors.
Similar to BCE, Rogers should also have some positive sentiment going forward with the upcoming 5G release.
While both dividend stocks face challenges ahead, the long-term investor can rely on their dividends and financial stability for long-term gains.
Dividend stock strategy
Both of these dividend stocks are offering decent value to long-term investors. BCE has a much higher yield but is also operating with a much higher payout ratio.
That’s not to say the dividend is on the chopping block, however; it’s simply something to keep in mind. Both stocks are also offering yields slightly above their respective five-year averages.
If you’re looking to add to a dividend stock strategy, these TSX giants are worth considering. Over the long run, they both have the potential to generate massive total returns through dividends and growth.
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Forex Today: The dollar’s remains the weakest – FXStreet
Here is what you need to know on Thursday, August 6:
Dollar’s sell-off continued. A poor ADP survey that showed that the private sector added just 167K new jobs in July added pressure on the American currency. The ISM Services PMI surprised to the upside, but investors ignored the headline as the employment sub-component was weak. Meanwhile, the US Congress continues to discuss the next aid package, without reaching an agreement just yet.
High-yielding EUR, GBP and AUD flirted with their recent multi-month highs on the back of dollar’s weakness, but there was no follow-through, easing just modestly ahead of Wall Street close.
Equities closed with gains, while government bond yields bounced a bit from their recent lows, preventing the USD/JPY pair from collapsing.
USD/CAD plunged in a mixture of encouraging Canadian data and rising oil prices, with WTI reaching $43.50 a barrel. The US EIA stockpiles report showed that stockpiles were down by 7.37 million in the week ended July 31.
Gold prices soared, hitting fresh all-time highs. Spot gold traded as high as $2055.69 a troy ounce.
The 'shop local' message is everywhere, but it's tough resisting deals during a pandemic – CBC.ca
Are you on board the shop local movement that’s rolling across Canada?
The encouragement to support neighbourhood businesses is coming from all quarters as the economy struggles to emerge from the financial devastation of the COVID-19 pandemic.
Whether it’s provincial and municipal initiatives, chambers of commerce programs, highly publicized incentive campaigns backed by financial giants, or small signs in front of individual businesses, the message is the same: Show your local entrepreneurs some extra love during these difficult times — it’s important for helping the economy recover.
While recent polls suggest most Canadians support the idea, actually getting people to prioritize shopping locally over scoring the best deal and the convenience of shopping online is a tough sell during a pandemic, some experts say.
Consumers lack confidence
The pandemic has left many people out of work and feeling insecure about their finances, which could make finding the lowest prices more important than supporting local small businesses.
The Bank of Canada’s most recent survey of consumer expectations showed that virtually all indicators have deteriorated due to the impact of the pandemic, including people’s expectations for wages, spending, labour market conditions, inflation and growth in house prices.
“Everybody is trying to find a deal because they don’t know how long their money is going to last,” said economist Armine Yalnizyan.
And maintaining low prices can be a challenge for small enterprises, she said.
“They have a hard time providing deep-cut bargains, especially now.”
Still, surveys done since the pandemic began suggest there is growing support for small businesses in this country. A key finding from a Leger poll conducted in April was that “Canadians say they are buying local products more often or for the first time.”
American Express Canada said 83 per cent of participants in an online poll in June agreed it was time to support the small business community, while 76 per cent said they were “determined to shop local more than in the past.” The poll wasn’t randomized, but a comparable random poll would have a margin of error of four percentage points, 19 times out of 20.
Who says they don’t support small businesses?
But Wayne Smith, a professor at Ryerson University’s Ted Rogers School of Management who specializes in consumer behaviour, says what people tell researchers can differ from how they actually behave in the real world.
“It’s kind of like asking if people like puppies,” he said. “Everyone’s going to say they like puppies. But how many people go out and get a puppy?”
Smith compares the shop local phenomenon to consumers committing to shop at stores that specialize in environmentally friendly, sustainable products.
“Some do it, but it’s a relatively small proportion of the population,” he said. “Otherwise, Walmart would be out of business.”
Buying decisions are based on “perceived value,” Smith said. Locally sourced goods or services must be of equal or greater quality than those found elsewhere if consumers are going to follow through on their good intentions, he said.
Julia Gray of Toronto said she and her family are happy to shop locally as much as possible and support small businesses instead of large corporate chains.
However, as an artist, she is also very value conscious, she said.
“My income is always a bit in flux, so, as a family, we’ve learned to be careful about our spending.”
Even so, the pandemic inspired her to make a more concerted effort to support her neighbouring businesses, she said.
“Instead of ordering from Pizza Pizza or some other corporate pizza place, let’s order from the local place where their kids go to school with our kids,” she said. “These places won’t survive if we don’t help them.”
Amazon sales booming
Gray says small businesses can also be preferable from a health perspective.
“We have folks in our family who are immunocompromised,” she said. “We don’t want to go where there are big groups and you can be more exposed to the virus. Smaller shops don’t have as many people in them.”
She avoids shopping at Amazon, she said, because it’s one way to express her values.
“You can vote, and you can decide where to spend your money,” she said. “We think about workers — are they treated fairly? Are they protected? And in whose hands does our money end up?”
But Lonnie Delisle, a choir director in Vancouver, is a fan of Amazon.
“It’s so convenient. The price point is good, the selection is good,” he said. “The ease at which you can find things and make the purchases. Amazon is exceedingly user-friendly.”
Delisle said he tries to shop with Canadian companies as much as possible, often checking the Bay or Canadian Tire first.
“But when you need something, and [Amazon has] what’s available, that’s where we go.”
Amazon has thrived during the pandemic, with sales jumping 40 per cent compared to the same time last year. Revenue from international markets such as Canada has also surged due to increased demand.
Big businesses offer incentives for shopping locally
However, even some very big businesses in Canada are trying to get the message out about the importance of small businesses.
The Royal Bank and American Express Canada are both spending big bucks on multimedia advertising campaigns to encourage consumers to shop locally, and offering financial incentives to customers who support small businesses.
RBC’s Canada United campaign offers customers extra points on their RBC Rewards card by shopping locally.
The bank also produced a video about the importance of small businesses and will donate five cents to a special fund every time someone views the video, or likes or shares it on social media. Entrepreneurs will then be able to apply to the fund for grants up to $5,000 to help them cover costs associated with keeping their business afloat through the pandemic.
American Express Canada’s Shop Small initiative gives cardholders $5 in credits when they spend at least $10 at up to 10 different small businesses, to earn a maximum of $50 in free money. The company has also created a Shop Small Map to direct shoppers to eligible stores.
“It’s good for our economy,” said Kerri-Ann Santaguida, vice-president and general manager of merchant services for American Express Canada. “It’s about the vibrancy of neighbourhoods across the country.”
Economist Armine Yalnizyan said the strategies of American Express Canada and RBC are similar to that of the federal government, with its rent relief program and small business loans, because they recognize that businesses are the engine that will pull Canada’s economy through the crisis.
“We can’t have resilient communities without resilient small businesses,” said Yalnizyan, who holds a fellowship on the future of jobs from the Atkinson Foundation, a Toronto-based charitable organization focused on social and economic justice.
The fact is, she said, big financial institutions such as RBC and American Express Canada depend on a healthy economy.
“They’re trying to keep as many businesses afloat as possible,” she said, “which will minimize the increase in permanent layoffs.”
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