With just hours to go until the final session of the first quarter wraps, the Dow was on track for its worst single-quarter decline since the fourth quarter of 1987, and its worst first quarter on record.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Stocks have swung widely over the past several weeks, with Monday’s gains coming after a smattering of positive health-care developments helped blunt some fears surrounding reports of a still-rising coronavirus case count, extended stay-at-home orders, and strained hospital infrastructure in the cities hit hardest by the outbreak. Johnson & Johnson said Monday it planned to begin human tests of its coronavirus vaccine by September, and Abbott Laboratories recently unveiled a five-minute coronavirus test.” data-reactid=”18″>Stocks have swung widely over the past several weeks, with Monday’s gains coming after a smattering of positive health-care developments helped blunt some fears surrounding reports of a still-rising coronavirus case count, extended stay-at-home orders, and strained hospital infrastructure in the cities hit hardest by the outbreak. Johnson & Johnson said Monday it planned to begin human tests of its coronavirus vaccine by September, and Abbott Laboratories recently unveiled a five-minute coronavirus test.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Separately, overnight Tuesday, better than expected manufacturing sector data from China suggested the country was beginning to recover some economic damage from the outbreak.” data-reactid=”19″>Separately, overnight Tuesday, better than expected manufacturing sector data from China suggested the country was beginning to recover some economic damage from the outbreak.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Still, both the human impact and business disruptions due to the pandemic have continued to mount around the world. The number of coronavirus cases topped 800,000 globally as of Tuesday, including more than 164,000 in the U.S., according to Johns Hopkins data. In New York, the U.S. epicenter of the outbreak, the number of confirmed cases jumped by nearly 7,000 to 66,497 as of Monday afternoon.” data-reactid=”20″>Still, both the human impact and business disruptions due to the pandemic have continued to mount around the world. The number of coronavirus cases topped 800,000 globally as of Tuesday, including more than 164,000 in the U.S., according to Johns Hopkins data. In New York, the U.S. epicenter of the outbreak, the number of confirmed cases jumped by nearly 7,000 to 66,497 as of Monday afternoon.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Some lawmakers have already been pushing for more fiscal stimulus just days after passing a $2 trillion economic relief package.” data-reactid=”21″>Some lawmakers have already been pushing for more fiscal stimulus just days after passing a $2 trillion economic relief package.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="JCPenney, Macy’s, Kohl’s and Gap became some of the latest major public retailers to announce major furloughs as storefronts remain closed. Companies from Domino’s Pizza to Planet Fitness and L’Oreal recently suspended their respective 2020 financial guidance, as uncertainty over the duration and magnitude of impact from the coronavirus outbreak linger.” data-reactid=”22″>JCPenney, Macy’s, Kohl’s and Gap became some of the latest major public retailers to announce major furloughs as storefronts remain closed. Companies from Domino’s Pizza to Planet Fitness and L’Oreal recently suspended their respective 2020 financial guidance, as uncertainty over the duration and magnitude of impact from the coronavirus outbreak linger.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Amid these developments, many analysts believe further volatility is ahead for equities, with some predicting a choppier “W-shaped” or slower “U-shaped,” rather than a “V-shaped,” recovery. Others, including those at JPMorgan Chase, suggested risk assets could start to stabilize from here.” data-reactid=”23″>Amid these developments, many analysts believe further volatility is ahead for equities, with some predicting a choppier “W-shaped” or slower “U-shaped,” rather than a “V-shaped,” recovery. Others, including those at JPMorgan Chase, suggested risk assets could start to stabilize from here.
As equities at least temporarily take a breather from a selloff earlier this month, investors turned their attention to oil, which recovered some losses Tuesday after a precipitous decline during the prior session sent West Texas intermediate futures to the lowest level since 2002.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="President Donald Trump held a call with Russian leader Vladimir Putin Monday, during which the leaders “agreed on the importance of stability in global energy markets,” according to Bloomberg, citing a White House statement.” data-reactid=”25″>President Donald Trump held a call with Russian leader Vladimir Putin Monday, during which the leaders “agreed on the importance of stability in global energy markets,” according to Bloomberg, citing a White House statement.
—
1:12 p.m. ET: Stocks decline again in volatile session
Stocks turned around were down again midday Tuesday, with the Dow off nearly 200 points, or 0.87%. The Nasdaq and S&P 500 each also dipped into negative territory, led by declines in the Real Estate sector.
—
11:02 a.m. ET: Stocks pare earlier losses, Dow and Nasdaq turn slightly positive
Here were the main moves in markets, as of 11:02 a.m. ET:
S&P 500 (^GSPC): -4.31 points (-0.16%) to 2,625.76
10:50 a.m. ET: The eventual economic recovery in the U.S. will be ‘U-shaped,’ strategist says
The economic deterioration induced by the COVID-19 outbreak will likely create a “U-shaped” recovery after infection rates peak, or a slower rebound than the speedy “V-shaped” recovery some had initially anticipated, according to Gabriela Santos, JPMorgan global market strategist.
“A ‘V-shape’ I think we should unfortunately discount at this point, because even when infection rates peak for COVID-19 around the world, what the China experience is teaching us is even though the government begins to relax some social distancing guidelines, individuals themselves are still very careful about how exactly they go back to their day to day lives,” she said.
“So demand was quick to shut down, but it’s actually much slower to come back online,” she added. “The better analogy here is a U. There’s a very sharp drop in activity in the first half, there’s a bit of a stall in the second, and then in 2021 is when that strong rebound begins.”
—
<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="10:17 a.m. ET: Goldman Sachs slashes first- and second-quarter GDP estimates further” data-reactid=”49″>10:17 a.m. ET: Goldman Sachs slashes first- and second-quarter GDP estimates further
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Goldman Sachs on Tuesday downwardly revised its estimate for second-quarter economic activity in the U.S., citing even greater impact from the coronavirus outbreak than originally anticipated. However, they also upwardly revised their expectations for the margin of recovery in later quarters this year.” data-reactid=”50″>Goldman Sachs on Tuesday downwardly revised its estimate for second-quarter economic activity in the U.S., citing even greater impact from the coronavirus outbreak than originally anticipated. However, they also upwardly revised their expectations for the margin of recovery in later quarters this year.
The firm said it sees real gross domestic product falling 9% in the first quarter and dropping 34% in the second quarter on a quarter over quarter, annualized basis. This compared to their previous estimates of a 6% drop and 24% drop in the first and second quarters, respectively, on a quarter over quarter, annualized basis.
At the same time, the economists upgraded their expectations for the recovery in the second half of this year. They see a 19% quarter over quarter annualized GDP gain in the third quarter, or better than the 12% jump previously anticipated.
“These forecast changes reflect the net effect of two directionally offsetting changes. On the one hand, the anecdotal evidence and the sky-high jobless claims numbers show an even bigger output and (especially) labor market collapse than we had anticipated,” the economists said. “This not only means deeper negatives in the very near term but also raises the specter of more adverse second-round effects on income and spending a bit further down the road.”
“On the other hand, both monetary and fiscal policy are easing dramatically further, which will tend to contain these second-round effects and add to growth down the road,” they added. “The Phase 3 fiscal package was much bigger than we had expected, we now anticipate a Phase 4 package focused on state fiscal aid, and the Fed is likely to use the $454bn addition to the Treasury’s Exchange Stabilization Fund aggressively to sustain the flow of credit to private-sector and municipal borrowers.”
—
10:00 a.m. ET: Consumer confidence declines in March ‘in line with a severe contraction,’ Confidence Board says
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Consumer confidence fell but by a smaller margin than anticipated, the Conference Board said Tuesday.” data-reactid=”61″>Consumer confidence fell but by a smaller margin than anticipated, the Conference Board said Tuesday.
The headline consumer confidence index fell to 120.0 in March, better than the 110.0 expected, according to Bloomberg consensus data. February’s index was upwardly revised to 132.6 from 130.7 previously reported.
Subindices tracking consumers’ assessments of current and future business conditions also declined in March.
“Consumer confidence declined sharply in March due to a deterioration in the short-term outlook,” Lynn Franco, senior director of economic indicators at The Conference Board, said in a statement. “The Present Situation Index remained relatively strong, reflective of an economy that was on solid footing, and prior to the recent surge in unemployment claims.”
“However, the intensification of COVID-19 and extreme volatility in the financial markets have increased uncertainty about the outlook for the economy and jobs,” Franco added. “March’s decline in confidence is more in line with a severe contraction – rather than a temporary shock – and further declines are sure to follow.”
—
9:31 a.m. ET: Stocks open lower
Stocks opened lower, taking a pause from rising after Monday’s rally.
Early losses in the S&P 500 were led by declines in the Utilities and Financial sectors. Energy was the only positive sector, as crude oil prices recovered some of Monday’s steep losses.
Here were the main moves in markets as of 9:31 a.m. ET:
S&P 500 (^GSPC): -16.97 points (-0.65%) to 2,609.68
Stock futures’ gains proved ephemeral Tuesday morning as contracts on each of the S&P 500, Dow and Nasdaq took a turn a dropped at least 1%, with an hour to go until the opening bell.
Here were the main moves in the three major indices, as of 8:33 a.m. ET:
S&P 500 futures (ES=F): down 1.41%, or 36.75 points to 2,574.5
Dow futures (YM=F): down 1.31% or 290 points to 22,877.00
Nasdaq futures (NQ=F): down 1.07% or 84.25 points to 7,770.5
—
7:11 a.m. ET Monday: Stock futures hold steady
Stock futures were little changed Tuesday morning, taking a pause after Monday’s rally. Crude oil prices recovered some losses after a rout sent the commodity down to its lowest level since 2002.
Here were the main moves in markets, as of 7:11 a.m. ET:
S&P 500 futures (ES=F): down 0.08%, or 2 points to 2,609.25
Dow futures (YM=F): up 0.01% or 2 points to 22,169
Nasdaq futures (NQ=F): up 0.25% or 19.5 points to 7,874.25
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.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
