World stocks looked set to close their worst quarter since 2008 on a brighter note on Tuesday, as strong Chinese factory data held out hope for an economic revival even as much of the rest of the world shut down to fight the coronavirus.
Stocks have rallied since the start of last week but remain down more than 20 per cent for the quarter. European shares have had an even worst time, suffering their worst three months since 1987.
But with trillions wiped off global markets in March and policymakers responding with more than US$10-trillion and counting of fiscal and monetary stimulus packages, a semblance of calm has returned this week.
Some analysts have been bold enough to call a bottom in stocks and say the lows of early last week are unlikely to be revisited.
Japan’s benchmark Nikkei 225 rose in morning trading but reversed course to dip nearly 0.9 per cent, finishing at 18,917.01. Hong Kong’s Hang Seng stood at 23,603.48, up 1.9 per cent.
European stocks rallied at the open. The Euro STOXX gained 1.7 per cent, France’s CAC 40 1.15 per cent and the German DAX 2.08 per cent. Britain’s FTSE 100 rose 1.8 per cent.
That followed gains in Asia after China’s official manufacturing purchasing managers’ index (PMI) rose to 52.0 in March from a record-low 35.7 in February, topping forecasts of 45.0.
Analysts cautioned that underlying activity probably remained below par, since the improvement measured the net balance of companies reporting an expansion or contraction, but markets cheered the news.
S&P 500 futures rose 0.6 per cent, pointing to a stronger open on Wall Street after a rally on Monday lifted the U.S. index towards a 20 per cent gain since the lows of last week.
Despite the more positive mood, not everyone is convinced the current rally has legs.
“In spite of the significant sell-off of most growth-oriented assets since mid-February, we are concerned there is further downside ahead,” said Salman Baig, an investment manager at Unigestion.
“The violent market action should not be understated, but the underlying cause – an accelerating pandemic requiring large parts of the economy to shut down – is still with us.”
The pace of coronavirus infections globally was heading towards 800,000. But Deutsche Bank analysts noted that for two consecutive days the global growth in new cases was 10 per cent, after being well above that for most of the past two weeks.
Health officials are much more cautious. A World Health Organisation official warned on Tuesday that even in the Asia-Pacific region the epidemic was “far from over”.
“This is probably the most embarrassing statistic for the West that China could possibly release. Not only did China stop the virus with just 3,309 deaths, they also appear to have done it with just a one-month shutdown of the economy,” Charlie Robertson, the chief economist at Renaissance Capital, said on Twitter.
Some analysts dispute China’s figures, however.
Elsewhere, oil prices rose off the 18-year lows hit on Monday after the United States and Russia agreed to talks to stabilise energy markets.
Oil prices have been hit by a double whammy, with U.S. crude at one point falling below $20 a barrel on Monday, as the virus outbreak cut demand worldwide and Saudi Arabia got into a price war with Russia.
Brent crude was up 43 cents, or 1.9 per cent, at $23.19 a barrel, after closing on Monday at $22.76, its lowest finish since November 2002.
U.S. crude was up $1.21, or 6 per cent, at $21.30 a barrel, after settling in the earlier session at $20.09, its lowest since February 2002.
The dollar rose for a second day, although the gains were more controlled than the jumps of earlier this month that put severe stress on funding markets for the U.S. currency.
The dollar, measured against a basket of currencies, was up 0.3 per cent at 99.493.
The euro dropped 0.4 per cent to $1.0995. Sterling slipped 0.7 per cent to $1.2330. The yen was 0.5 per cent lower against the dollar.
Analysts say investors rebalancing their portfolios at month-end and quarter-end were probably behind some of the dollar’s moves over the next 24 hours.
There was little respite for emerging-market currencies, however. The South African rand was near record lows and Latin American currencies were falling once again.
Bond market moves were more measured than in recent weeks. Italian government bond yields were steady before an auction of debt, amid hopes the country’s efforts to contain the spread of the coronavirus may be starting to work.
German benchmark 10-year yields rose 5 basis points to -0.474 per cent. U.S. Treasury yields gained 2 to 4 bps, as investors sold safer bonds and bought into equities.
Malls are reopening — but will shoppers come back? – CBC.ca
Malls across the country are beginning to open their doors after weeks of government-mandated shutdowns, but both operators and retail tenants are stepping into uncharted territory amid the COVID-19 pandemic.
In the near-term, operators are focused on reopening their properties safely, but there’s a larger concern that shoppers — who have embraced e-commerce and curbside pickup since the pandemic’s outset — will be unimpressed upon returning to malls as many stores remain closed and new safety measures change the experience.
Tim Sanderson, head of Canadian retail at Jones Lang LaSalle, said he’s worried about a repeat of U.S. retail giant Target’s ill-fated attempt to penetrate the Canadian market, where supply chain issues resulted in empty shelves and annoyed customers who left and never came back.
“This is the experience that I fear, that we fear, could happen in the malls,” he said. “Someone goes to a shopping centre, goes through all of the protocols involved, walks into the shopping centre, and the store she came for is not even open, but also, the experience is going to be underwhelming.”
Sanderson emphasized that the safety measures malls have rolled out, such as one-direction travel, reduced or eliminated seating, physical distancing requirements and increased security to enforce policies, may be detrimental to the shopping experience but are crucial as a resurgence of the pandemic is the worst-case scenario.
“If we re-open business, and then the government has to lock it down again, I think that’s just bad for everybody in a whole lot of ways, not just shopping and retail, but peoples psyche and everything,” he said.
Mall owners have a strong incentive to get their properties open safely, as rents have plummeted following the provincial orders to close.
Owners were only paid about 20 to 25 per cent of their expected April rent, and around 15 per cent in May.
“There’s lots of talk among the retail and landlord community about what rents look like going forward, people have had a major, major impact to their sales.”
But he said there hasn’t been much progress as nobody’s in a position to say what sales will look like, or what rent levels will be affordable.
Mall owners, like many other landlords, have engaged tenants in rent deferrals to help struggling tenants.
Ivanhoe Cambridge has given deferrals to the “vast majority” of tenants “in solidarity with the difficult circumstances,” said spokeswoman Katherine Roux Groleau.
Some landlords are stepping in to help in other ways. Brookfield Asset Management, which has extensive mall holdings especially in the U.S., has said it’s ready to invest $5 billion US in large retailers to keep them afloat.
The situation could also lead to a return of pure percentage deals, where rent is tied to sales, especially for restaurant tenants, said CBRE Ltd. vice chair Paul Morassutti.
The crisis, however, will likely also accelerate the trend already underway of mall properties moving away from strictly retail, especially as numerous retailers like Reitmans, Aldo, Pier 1 and others go into creditor protection.
“This pandemic has accelerated the timing for some of those stores,” said Ray Wong, vice president at Altus Group.
“It’s not just the pandemic, they were having challenges before, and this just pushed them along.”
He said that while some premier shopping centres like Yorkdale Mall in Toronto will continue to see high demand, others in secondary markets could see an accelerated switch to more mixed used condos and rentals and office, while some in smaller markets might not survive as retail spaces at all.
“Certain malls or certain shopping centres, it may not be viable to have retail there and it may be redeveloped to other types of uses.”
The coronavirus outbreak, and the resulting shift to working from home, could also make people more reluctant to take long commutes and will instead gravitate to suburban hubs, like a massive development Oxford has planned for central Mississauga to further the trend of diversifying mall properties.
“It will be really interesting to see the discussion on the office front, with more people working from home, not wanting to do the two-hour commute on the subway, that they prefer locations that are closer to where they live, especially in the suburbs,” said Wong.
“It’s a constant juggling act to figure out what will work.”
'We are excited by these results': Saskatoon lab plans human trials after potential COVID-19 vaccine shows promise in animal tests – CTV News Saskatoon
human clinical trials for a Saskatoon research lab’s potential COVID-19 vaccine could begin as early as this fall.
In a news release, the Vaccine and Infectious Disease Organization-International Vaccine Centre (VIDO-InterVac), said the vaccine proved “highly effective” in ferrets, animals which are widely used for COVID-19 modelling.
“Proving that the vaccine is effective in ferrets is a key milestone in the development pathway,” VIDO-InterVac director Dr. Volker Gerdts said in the release.
During the trial, the vaccine decreased viral infection in the animals’ upper respiratory tract to “almost undetectable levels.”
More trials are planned for the coming months, which will include safety studies that could clear the way for human clinical trials this fall.
As the lab’s vaccine research continues VIDO-InterVac is also in the process of readying a vaccine manufacturing facility.
“We are excited by these results and are continuing to develop our vaccine towards regulatory approval,” project leader Dr. Darryl Falzarano said.
The University of Saskatchewan-based lab received a
from the federal government for its COVID-19 research in March.
Five business groups urge Ontario to halt commercial evictions during pandemic – CP24 Toronto's Breaking News
Shawn Jeffords, The Canadian Press
Published Monday, May 25, 2020 12:25PM EDT
Last Updated Monday, May 25, 2020 3:43PM EDT
TORONTO – Five business groups called on the Ontario government on Monday to impose a commercial eviction moratorium during the COVID-19 pandemic, saying many small and medium-sized businesses are at risk of closing.
The groups make the request in an open letter to Premier Doug Ford, saying the help is needed as the due date for June rent approaches.
The groups include the Canadian Federation of Independent Business, Ontario Chamber of Commerce, Ontario Restaurant Hotel & Motel Association, Restaurants Canada and the Retail Council of Canada.
“Without your immediate assistance, more businesses will be forced to close,” the letter says. “In the absence of sufficient support, a large portion of the economy and the jobs created by our hard-working members will disappear forever.”
Last month, the federal and provincial governments announced the joint Canada Emergency Commercial Rent Assistance program to help businesses stave off eviction during the pandemic shutdown.
The program will see Ottawa and the provinces offer forgivable loans to commercial property owners to cover 50 per cent of rent for eligible small businesses, with the tenant covering 25 per cent.
But the groups said some landlords are not applying for the program, which means businesses will receive no aid at all.
“Even though the program just officially started, we already know from our members that many landlords will not apply, meaning that their tenants will not be able to access the program and the commercial tenant eviction protection it includes,” the business groups said.
On Monday, Ford resisted calls for the moratorium, noting the joint rent relief program was just getting underway. But he cautioned landlords against not taking part in it and instead evicting tenants.
He called the program an “olive branch” to landlords and urged them to register.
“They need to start signing up for this,” Ford said. “They aren’t going to like the consequences if they don’t sign up for it. I can assure you. I’m protecting the tenants, it’s simple.”
Green party Leader Mike Schreiner said the province could grant the moratorium and give businesses relief without costing the government anything.
“Today the Ontario business community asked the province for a temporary moratorium on evictions, but the Premier would only pass the buck to landlords with vague threats,” Schreiner said in a statement. “Small businesses need a champion, not a cheerleader.”
This report by The Canadian Press was first published May 25, 2020.
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