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Pension giant says radical post-COVID changes to hit investments – BNN

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4 years ago

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Canada’s largest pension fund says some of the “radical changes” in consumer behaviors enforced during the pandemic lockdown are here to stay.

The Canada Pension Plan Investment Board’s thought leadership lab sees permanent changes to consumer behavior as a result of the global pandemic. The era after COVID-19 will be defined by wider adoption of e-commerce among older consumers, as well as by long-term impacts on health-care and privacy policy, all of which will impact investment portfolios, it says.

“The world will be different after COVID-19. For long-term investors, this will mean both new risks and new opportunities as we transition to recovery,” CPPIB portfolio managers Caitlin Walsh and Ruby Grewal wrote in the report.

Gains in adoption of e-commerce have been patchy, according to the report. While the U.S. and Europe appear to be rapidly catching up to China, not all merchants are reaping the benefits with big players like Amazon.com Inc. and Walmart Inc. having enormous advantages over smaller retailers with more limited selections and unscalable infrastructure, Walsh and Grewal said.

The pandemic’s impact on different demographic groups will change how older and younger consumers approach the use e-commerce,

“Older consumers, anxious to avoid crowded public spaces for health reasons, now say they plan to increase e-commerce adoption across all categories, while younger consumers, restless after months of lockdown, indicated a building desire to return to stores for more discretionary categories,” they wrote.

Telehealth was also another notable pandemic-driven trend. A third of users in countries reviewed by CPPIB tried telehealth services for the first time during the pandemic. Longer-term uptake will depend, in part, on whether providers are able to improve the experience, the report said.

Work-from-home

Remote work, a slow-building trend before Covid-19, accelerated dramatically during the crisis, with roughly 50 per cent of workers in China, the U.K. and the U.S. working from home, up from five per cent or fewer before, according to the report.

CPPIB expects a long-term uptick in remote work, mostly in the form of flexible schedules that allow for a few days per week at home, rather than a wholesale abandonment of the office. In that sense, companies enabling remote work, for example collaboration and productivity tools, cybersecurity, cloud, automation, and sectors that focus on office sanitation are likely to gain a tailwind from the crisis.

A potential shift of populations away from the largest urban centers and changing mobility trends are also likely to have an effect. With greater geographic flexibility in employment, employees looking for more space should migrate further from city centers, which will likely accelerate the ongoing growth of so-called tier two cities in the U.S. and Europe.

Shifts in global supply chains should benefit providers of supply chain software and automation. CPPIB expects global supply chains will grow more complex, as the pandemic and chronic geopolitical tensions lead companies to diversify by turning to other countries or multi-sourcing. India, Southeast Asia, Mexico and Poland are best positioned to benefit from gradual, incremental supply chain diversification, according to the report.

CPPIB returned 5.6 per cent in the quarter ended June 30 as stock markets rebounded from a pandemic-induced selloff in March. The fund’s growth to $434 billion (US$330 billion) was attributed to gains in a broad range of asset classes, though a stronger Canadian dollar offset some gains. CPPIB holds $241 billion in public and private equities and 97 per cent are in the U.S. and overseas markets.

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Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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6 days ago

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November 6, 2024

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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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4 weeks ago

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October 16, 2024

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX up more than 200 points, U.S. markets also higher

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1 month ago

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October 11, 2024

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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