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Stocks have surged while oil and gold have fallen following President Donald Trump’s response to Iran’s attack on two Iraqi bases housing US troops — more sanctions but no armed response.
4:15 p.m. ET: Stocks come off highs after rockets in Baghdad
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Stocks fell after a Reuters report that two blasts were heard in the Iraqi capital of Baghdad, pulling back from record highs after Trump announced no armed response to Iran’s attacks. The blasts were later revealed to be rockets that fell within Baghdad’s Green Zone, causing no casualties. There was no immediate claim of responsibility, Reuters says.” data-reactid=”18″>Stocks fell after a Reuters report that two blasts were heard in the Iraqi capital of Baghdad, pulling back from record highs after Trump announced no armed response to Iran’s attacks. The blasts were later revealed to be rockets that fell within Baghdad’s Green Zone, causing no casualties. There was no immediate claim of responsibility, Reuters says.
Here’s where markets were at 4:15 p.m. ET:
S&P 500 (^GSPC): +0.49% or +15.87 points to 3,253.05
2:45 p.m. ET: Market response to U.S.-Iran tensions will fade, strategist says
History suggests that developments in U.S.-Iran tensions will not leave a lasting mark on U.S. stocks, oil and safe haven assets, according to Capital Economics senior market economist Oliver Jones.
“We doubt that U.S.-Iran tensions will play more than a minor role in deciding the best and worst-performing asset classes in 2020 as a whole, at least outside the Middle East,” Jones wrote in a note entitled “A bit of perspective on geopolitical risk” Wednesday.
So far, Wednesday’s trading action – namely, a sharp rebound in equities and stark declines in oil and gold prices – are early indications that Jones’ thesis may come to pass over the course of the year.
“Such a small and short-lived reaction is actually fairly typical of what has happened after other events which have raised the risk of military action involving the U.S., like North Korea’s missile tests and the U.S. threats of ‘fire and fury’ in 2017, or the Cuban missile crisis in the 1960s,” Jones said.
As another example, Jones pointed to cross-asset performance after the start of the Gulf War in 1990s. In the immediate aftermath of this conflict, returns from energy commodities surged, precious metal prices firmed and equities sank, in a similar response as witnessed late last week after the first reports of the U.S. airstrike that took out top Iranian commander Qassem Soleimani.
“By the six-month mark, though, energy commodities had given back a lot of their initial gains. And precious metals had started to struggle, faring about as badly as global equities, which were contending with a recession in the US economy,” Jones said. A similar reversal also took place around six months after the start of the Iraq War in 2003, he added.
“These conflicts simply haven’t had large enough lasting effects on the global economy to matter much to markets outside the Middle East for long,” Jones said. “That looks like the most likely outcome this time too.”
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<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="1:45 p.m. ET: The oil shock is cancelled” data-reactid=”35″>1:45 p.m. ET: The oil shock is cancelled
Crude is collapsing in the wake of President Trump’s remarks, which markets are interpreting (rightly or wrongly) as a de-escalation of the U.S.’s standoff with Iran. Overnight, crude traders aggressively priced in the possibility of an armed confrontation, but Trump’s speech is momentarily calming fears of things heating up.
Brent is now down over 5% on the session, having cracked $60 per barrel.
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1:38 p.m. ET: S&P 500 and Nasdaq hit record highs
Following Trump’s announcement that Iran is “standing down,” the S&P 500 hit a record high of 3,260.98 and the Nasdaq hit a record high of 9,144.00.
Here’s where the major indices were at 1:38 p.m. ET:
S&P 500 (^GSPC): +0.65% or +20.90 points to 3,258.08
Nasdaq (^IXIC): +0.81% or +73.68 points to 9,142.26
Crude oil (CL=F): -5.12% or -3.21 to 59.49 a barrel
Gold (GC=F): -0.97% or -15.20 to 1,559.10 per ounce
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<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="12:55 pm. ET: GrubHub spikes on report of strategic options” data-reactid=”53″>12:55 pm. ET: GrubHub spikes on report of strategic options
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="GrubHub (GRUB) is staging a breathtaking rally of nearly 14% on the day, after The Wall Street Journal reported that the food delivery startup is weighing its options, which may include a sale. The report said talks are in early stages and nothing may come of it. The stock has hit rough shoals since going public nearly 6 years ago, with its valuation less than half of where it began life as a public company.” data-reactid=”54″>GrubHub (GRUB) is staging a breathtaking rally of nearly 14% on the day, after The Wall Street Journal reported that the food delivery startup is weighing its options, which may include a sale. The report said talks are in early stages and nothing may come of it. The stock has hit rough shoals since going public nearly 6 years ago, with its valuation less than half of where it began life as a public company.
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<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="11:40 a.m. ET: Trump vows more sanctions on Iran but no armed response” data-reactid=”60″>11:40 a.m. ET: Trump vows more sanctions on Iran but no armed response
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President Donald Trump addresses the nation from the White House on the ballistic missile strike that Iran launched against Iraqi air bases housing U.S. troops, Wednesday, Jan. 8, 2020, in Washington, as Vice President Mike Pence, Secretary of State Mike Pompeo and military leaders, looks on. (AP Photo/Alex Brandon)
Addressing Iran’s retaliation against U.S. bases in Iraq late Tuesday, President Donald Trump said Tehran “appears to be standing down” — in keeping with most observers’ thinking that an armed U.S. response isn’t imminent. Trump added that his administration “will immediately impose additional punishing economic sanctions on the Iranian regime.”
Investors seemed to cheer that news, with stocks adding to the session’s gains on hopes that tensions won’t spiral into further armed conflict.
Here were the main moves in markets, as of 11:46 a.m. ET:
<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="11:00 a.m. ET: The oil shock that never was (and might never be)” data-reactid=”95″>11:00 a.m. ET: The oil shock that never was (and might never be)
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="With Iran escalation fears (momentarily) in retreat, oil (CL=F) has reversed dramatically after spiking by 4% in after-hours trading on Tuesday. One of the major concerns about a prolonged U.S.-Iran conflict has been the impact on crude — and whether it would spark a global supply crisis that could send prices well above $100.” data-reactid=”96″>With Iran escalation fears (momentarily) in retreat, oil (CL=F) has reversed dramatically after spiking by 4% in after-hours trading on Tuesday. One of the major concerns about a prolonged U.S.-Iran conflict has been the impact on crude — and whether it would spark a global supply crisis that could send prices well above $100.
The U.S. shale boom has lubricated world markets with oil, and helped insulate the world’s largest economy from supply shocks. Torsten Slok, Deutsche Bank’s top economist, pointed out that the U.S. is in fact much less sensitive to rising oil prices than in years past.
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The US economy is much less sensitive to higher oil prices today than it used to be.
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10:46 a.m. ET: Nasdaq hits, holds near fresh record high
The Nasdaq posted an all-time high of 9,104.99 at about 10:15 a.m. ET. The index held near this record level as investors continued to shrug off the most recent U.S.-Iran developments. Both the S&P 500 and Dow were also in the green, with the former within 0.3% of its own all-time high at the highs of the session so far.
Here were the main moves in markets, as of 10:46 a.m. ET:
S&P 500 (^GSPC): 3,240.96, up 3.78 points or 0.12%
Over the course of a more than two-hour press conference in Lebanon, former Nissan chief executive officer Carlos Ghosn attempted to explain his reasoning for fleeing Japan, where he had been arrested under allegations of financial misconduct and aggravated breach of trust.
In his first public appearance since his escape, Ghosn went into detail over his treatment in Japan, which has a conviction rate north of 99% and where he believed he would not be given a fair trial. He described solitary confinement, a lack of access to prescribed medications, hours of interrogation and just two showers a week as all part of his incarceration.
Ghosn blamed a host of individuals and institutions for his situation, including Japanese prosecutors and government officials, and Nissan and its law firm.
The former auto executive was arrested in November 2018 and faced multiple charges for allegedly under-reporting years’ worth of compensation and misusing Nissan’s resources for his personal gain.
Iranian officials said they believed a mechanical issue caused the crash of the Boeing 737-800 aircraft, which had been en route to Ukraine’s capital Kyiv.
The crash took place just hours after Iran launched a missile attack on airbases in Iraq housing U.S. troops.
Ukrainian officials have most recently declined to offer their assessment for the cause of the accident, as the investigation remains ongoing.
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9:31 a.m. ET: Markets open little changed
U.S. equities opened mostly flat, shrugging off earlier fears after Iran launched more than a dozen missiles to strike U.S.-Iraqi airbases.
Here were the main moves in markets, as of 9:31 a.m. ET:
S&P 500 (^GSPC): 3,238.20, up 1.02 points or 0.03%
Gold (GC=F): $1,578.40 per ounce, up $4.10 or 0.26%
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8:15 a.m. ET: Private payrolls rise more than expected in December
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The U.S. economy added 202,000 private payrolls at the end of last year, according to a report from ADP/Moody’s Wednesday. This exceeded consensus economist expectations for an increase of just 160,000, according to Bloomberg data. In November, private payrolls had risen by an upwardly revised 124,000, from the 67,000 reported previously.” data-reactid=”173″>The U.S. economy added 202,000 private payrolls at the end of last year, according to a report from ADP/Moody’s Wednesday. This exceeded consensus economist expectations for an increase of just 160,000, according to Bloomberg data. In November, private payrolls had risen by an upwardly revised 124,000, from the 67,000 reported previously.
By sector, service-producing firms led December’s advances, posting a net increase of 173,000 jobs. However, gains were capped by a loss of 21,000 jobs in the leisure and hospitality industry, and a loss of 14,000 jobs in the information industry.
Goods-producing firms increased jobs by a net 29,000, with a gain of 37,000 payrolls in construction industries offset by declines in mining and manufacturing.
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<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="8:00 a.m. ET: Carlos Ghosn speaks for the first time since fleeing Japan” data-reactid=”177″>8:00 a.m. ET: Carlos Ghosn speaks for the first time since fleeing Japan
Former Nissan chief Carlos Ghosn slammed the Japanese justice system during his first public appearance since fleeing the country.
“I did not escape justice. I fled injustice and persecution, political persecution,” Ghosn said at a press conference in Lebanon on Wednesday. “You’re going to die in Japan or you’ve got to get out.”
Wall Street jitters flared before quieting after Iran fired missiles at U.S.-Iraqi airbases during the overnight session. The retaliatory move by Iran, after a U.S. airstrike last week took out its top military general, produced no reported casualties so far.
Here were the main moves during the pre-market session, as of 7:33 a.m. ET:
S&P futures (ES=F): 3,241.50, up 6.25 points or 0.19%
Dow futures (YM=F): 28,513, down 13 points or 0.05%
Nasdaq futures (NQ=F): 8,870.25, up 17.25 points or 0.19%
Crude oil (CL=F): $62.59 per barrel, down $0.11 or 0.18%
Gold (GC=F): $1,578.90 per ounce, up $4.60 or 0.29%
After reports of the projectiles around 5:30 p.m. ET Tuesday, stock futures slid and gold and oil prices spiked. Brent crude oil prices briefly surged to $71.75 per barrel and gold jumped to more than $1,600 per ounce for the first time in about seven years. These gains, however, retraced shortly thereafter.
“There was a knee-jerk reaction in financial markets, with oil and gold prices rising,” UBS economist Paul Donovan wrote in a note Wednesday. “However, a response was expected by investors, and the initial market moves seem hard to justify.”
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.
