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Stock market news live updates: Stocks rally after December jobs report

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U.S. stocks climbed on Friday after December employment data showed wage growth decelerated last month while a closely watched manufacturing report reflected a contraction in the services industry. Investors perceived the releases as a sign Federal Reserve officials may ease their rate hiking campaign.

The S&P 500 (^GSPC) jumped 1.7%, while the Dow Jones Industrial Average (^DJI) added 550 points, or around the same percentage amount. The technology-heavy Nasdaq Composite (^IXIC) advanced 1.5%. All three major averages were on pace to round out the first week of 2023 with losses before Friday, but the indexes will end in positive territory if momentum holds.

The Labor Department’s final jobs report of 2022 showed the U.S. economy added 223,000 payrolls last month while the unemployment rate fell to 3.5%. Economists had expected readings of 200,000 and 3.7%, respectively.

Employment has moderated in recent months, but hiring remains momentous despite the Federal Reserve’s efforts to quell a tight labor market that has placed upward pressure on wages and contributed to stubborn inflation.

“With over 1.8 unfilled jobs for every unemployed person, investors should expect higher rates for longer after today’s release,” Lazard Chief Market Strategist Ron Temple said in a note. “As long as the labor market remains this tight, the Fed cannot rest assured that inflation will return to its 2% target.”

The ISM’s non-manufacturing PMI fell below the 50 threshold for the first time since early into the pandemic two years ago. The gauge of services activity in the U.S. fell to 49.6 last month from 56.5 in November. Economists surveyed by Bloomberg expected a print of 55.0.

Beleaguered Tesla (TSLA) pared a loss of as much as 7% earlier in the session after the electric carmaker slashed prices in China following a December drop in deliveries.

The starting price for Model 3 was cut to 229,000 yuan, or around $33,000, while prices on the Model Y have been lowered to 259,900 yuan, or $37,886, according to Tesla’s website.

Elsewhere in markets, World Wrestling Entertainment (WWE) shares surged 23% after The Wall Street Journal reported former chief executive Vince McMahon will return to explore a sale of the business. McMahon retired in July 2022 following a misconduct probe.

Bed Bath & Beyond (BBBY) slid another 18% Thursday morning after revealing in a statement the previous day that the company was exploring bankruptcy as it runs out of cash. On Wednesday, shares tanked 30% following the announcement.

Costco (COST) stock gained more than 7%, emerging from a six-month low after the bulk retailer released upbeat December sales data. Revenue last month came in at $23.8 billion, up 7% year-over-year, while total comparable store sales grew 5.5%, beating analyst expectations of 5%. Costco was Yahoo Finance’s company of the year.

In commodities markets, oil prices rebounded Friday morning after a gloomy start to the year that saw crude futures plunge as much as 10% this week. West Texas Intermediate (WTI) crude oil, the U.S. benchmark, rose 1.8% to trade around $75 per barrel midday.

A trader works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., January 5, 2023. REUTERS/Andrew Kelly

Outside of the main monthly jobs report, a bevy of other labor market updates this week suggested hiring remains strong and job openings are still high. For investors, the figures suggested labor conditions remain tight enough for the Federal Reserve to keep raising interest rates, sending stocks lower.

In the previous trading session, all three major averages shed more than 1% after the ADP National Employment report showed private payrolls grew by 235,000 jobs in December, while filings for unemployment insurance fell to the lowest since September.

“Last year, it was the Fed versus the markets — they needed valuations to come down, they wanted equities to go down, they wanted bonds to go down, they wanted housing prices to go down — they got that,” David Waddell, CEO of eponymous firm Waddell and Associates told Yahoo Finance Live on Wednesday. “This year, it’s going to be the Fed versus employers, and what the Fed has told employers is, ‘We’re not going to stop until you fire two million people.'”

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Japan’s SoftBank returns to profit after gains at Vision Fund and other investments

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TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.

Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.

Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).

SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.

The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.

WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.

SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.

SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.

SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.

The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.

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Yuri Kageyama is on X:

The Canadian Press. All rights reserved.

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Trump campaign promises unlikely to harm entrepreneurship: Shopify CFO

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Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.

“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.

“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”

Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.

On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.

If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.

These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.

If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.

However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.

He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.

“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.

Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.

The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.

Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.

Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.

Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.

Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.

Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”

In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.

“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.

This report by The Canadian Press was first published Nov. 12, 2024.

Companies in this story: (TSX:SHOP)

The Canadian Press. All rights reserved.

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RioCan cuts nearly 10 per cent staff in efficiency push as condo market slows

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TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.

The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.

The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.

RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.

The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.

RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.

This report by The Canadian Press was first published Nov. 12, 2024.

Companies in this story: (TSX:REI.UN)

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