Stimulus plan could be introduced as early as today, media report says
Extended Brexit talks revive hopes for a deal with a U.K.-E.U. trade agreement
Volatility could rise this week ahead of quadruple witching day on Friday
Did you see the video footage over the weekend of those trucks leaving the Pfizer
PFE
(PFE) manufacturing plant in Michigan—the ones filled with the first shipments of the coronavirus vaccine it developed with BioNTech (BNTX)? It seems many investors did, which could be helping lift markets to start the week.
Ahead of the open Monday, stocks were regaining some of the ground lost last week. Also—in a reversal from the action late last week—the Cboe Volatility Index (VIX) has eased a bit, and crude oil futures (/CL) look to be renewing their advance toward $50. In other words, the “risk-off” sentiment that seemed to rule the end of last week may be unwinding a bit.
With the vaccine rollout underway, investors were also looking at another issue that’s been on their mind recently—potential stimulus from Congress. Reuters reported that a bipartisan plan could be introduced as early as today, news which seemed to be cheering investors. Still, it remains to be seen whether Congress can dot the Is and cross the Ts to get a deal done.
Also helping sentiment is the more congenial tone between the United Kingdom and the European Union as the deadline approaches for the U.K’s pullout from the common market.
Last week, vaccine optimism clashed with worries about rising Covid-19 infections and a worsening employment picture. It didn’t help that Brexit once again was in the headlines amid worry that the United Kingdom’s divorce from the European Union might come before a trade agreement could be reached.
One of the main things that ended up helping drag stocks lower for the week was waning investor hope for a congressional stimulus package as the debate on more federal coronavirus aid dragged on in Washington.
Wall Street seems to have sided with the Federal Reserve in thinking that more help from Capitol Hill is needed for Main Street as the pandemic continues and widespread availability of the vaccine is still a ways away.
While the Fed’s bond-buying program that covers Treasuries, corporate bonds, and mortgage-backed securities has been a big help for Wall Street, helping make these recent record highs possible, it’s also arguable that congressional stimulus such as extra unemployment help and checks deposited in bank accounts have done more for the average Joe and Jill.
Without another round of stimulus, investors and traders are apparently worried that, despite the stock market’s success this year, the pandemic’s effects on consumer spending could end up greatly delaying the economic recovery.
Fed Up to Bat This Week
Speaking of the Fed, this week investors are scheduled to get to hear more from the central bank. It’s two-day policy-setting meeting is scheduled to conclude on Wednesday afternoon.
Investors are expecting the central bank to stand pat on interest rates (100% certainty, according to the CME FedWatch tool, which uses futures prices to calculate rate-move probabilities). We’ll see if the Fed makes any comment on the need for further congressional stimulus—assuming one hasn’t been agreed on by then.
Investors also might want to know more about what the Fed thinks about the Treasury’s decision to let several emergency lending programs expire on the last day of the year and whether monetary policy makers think they have other tools than what they’ve already used to help the economy, and by extension the markets.
In addition to the Fed meeting, this week’s economic calendar also includes readings on November industrial production, retail sales, housing starts and building permits.
The weekly unemployment claims report will also likely be closely watched. The report, once a relatively sleepy affair, has come to have more significant impact on trading during the pandemic because it offers a more up-to-date reading on the labor market than the government’s monthly employment situation report.
Another thing that investors may want to keep an eye on is quadruple witching day this week. Friday is one of four days a year (once a quarter) when contracts for stock index futures, stock index options, stock options, and single-stock futures all expire.
Traditionally, markets tend to see elevated volatility around these days, so it’s possible we could see some extra price movement as the week goes on.
CHART OF THE DAY: After reaching into record territory, the S&P 500 Index (SPX—candlestick) ended up … [+] having its first down week in three, as you can see from this chart of weekly gains and losses so far this year. Stocks lost some momentum as the congressional debate over a new coronavirus stimulus package continued to drag on. Rising infection numbers, worse-than-forecast jobless claims data, and Brexit worry didn’t help. Data source: S&P Dow Jones Indices. Chart source: The thinkorswim® platform from TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results.
Data source: S&P Dow Jones Indices. Chart source: The thinkorswim® platform from TD Ameritrade.
Not Out of the Woods: Although the latest consumer sentiment index from the University of Michigan showed a surprising gain, the chief economist for the university’s Surveys of Consumers, Richard Curtin, had some sobering words. Most of the early December gain was due to a more favorable long-term outlook following the presidential election. But expectations for the year ahead for the economy and personal finances remained unchanged. “In the immediate future, job losses and income declines due to shutdowns are expected to increase, and the long priority queues before most consumers can be vaccinated will make the wait amid rising deaths all the more difficult to endure,” Curtin said in commentary accompanying the numbers. While he said a new round of federal stimulus will prevent much greater financial harm to households, small businesses, and local governments, “even if immediately adopted, the payments will not reach recipients for at least a month, allowing renewed hardships to dominate the holiday season.”
Holiday Shopping: This week, the monthly retail sales data may be particularly of interest to investors as those numbers offer a good way to get a sense of the pulse of the domestic consumer. The figures will be for November, which included Black Friday, a day many retailers rely on to get themselves out of the red and into the black. A strong showing could bode well for all of the holiday shopping season, but a poor showing might portend the opposite. A good bit of how well retailers did probably has to do with how well they were able to capitalize on promotions for online shoppers who remained at home amid the resurgence of the Covid-19 pandemic.
Glowing Embers: Inflation readings were pretty tame last week, as you might expect with the economy still weighed down by the pandemic. But there was inflation, and the fact that it registered at all seems to be a good sign. The November core consumer price index showed 0.2% month-on-month growth, which was in line with a Briefing.com consensus. And the core producer price index came in at 0.1% growth, slightly shy of a Briefing.com consensus expectation of 0.2%. When you look at annualized data for core CPI, it was 1.6%, which is well below the Fed’s 2% inflation target. (Keep in mind that the Fed’s preferred inflation gauge is the core personal consumption expenditures price index.) Some inflation can indicate a healthy economy, but too much can mean things are overheating. We seem quite far away from that latter scenario and the Fed rate tightening that would probably go with it. As Briefing.com put it, in reference to last week’s CPI report: “There aren’t any inflation alarm bells (or rate-hike bells) ringing in this report for the Fed.”
TD Ameritrade® commentary for educational purposes only. Member SIPC.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.
The S&P/TSX composite index was up 254.62 points at 23,847.22.
In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.
The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.
The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.
The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.
This report by The Canadian Press was first published Sept. 19, 2024.
VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.
Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.
The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.
“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.
“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”
Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.
The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.
The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.
Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.
More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.
Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.
“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.
Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.
“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.
Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.
Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.
Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”
“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.
This report by The Canadian Press was first published Sept. 18, 2024.
