Stocks gained on Monday, rising to fresh record levels after last week’s volatility as investors looked ahead to a key event from the Federal Reserve later this week.
The S&P 500 advanced and reached a fresh all-time intraday high. The positive sentiment extended into other risk assets, and oil prices also rebounded following recent declines. U.S. West Texas intermediate crude oil futures (CL=F) topped $64 a barrel, and Brent crude (BZ=F) jumped above $67 per barrel after suffering its longest losing streak since early 2018 as of last week.
“It’s the return of risk appetite in the broader financial markets,” Vandana Insights CEO Vandana Hari told Yahoo Finance of the rebound on Monday. “The real blow last week was signals the Fed might start tapering towards the end of this year, and I think that was a real double whammy for oil.”
The Dow rose as shares of Chevron (CVX) and Caterpillar outperformed. Shares of Pfizer (PFE) jumped after the pharmaceutical company announced it will acquire the cancer drugmaker Trillium Therapeutics (TRIL) for $2.3 billion. Separately, the U.S. Food and Drug Administration fully approved Pfizer’s top-selling COVID-19 vaccine following months of use under emergency authorization.
Stocks came under pressure late last week after the Federal Open Market Committee’s July meeting minutes signaled that “most” Fed participants believed the economy will have recovered enough to warrant the start of asset-purchase tapering by the end of this year. The S&P 500 posted its first weekly decline in three weeks, albeit while closing out Friday’s session to the upside. Central bank officials are set to hold their annual Jackson Hole Symposium this week starting on Thursday, which could serve as a forum for more remarks about the size and scope of the Fed’s tapering plans.
A host of new earnings and economic data have also come in. On the whole, corporate profits have been exceptionally strong, with nearly 90% of S&P 500 companies having topped consensus earnings per share estimates, according to FactSet. That’s come even as concerns over the spread of the Delta variant have resurged and issues around supply chain and materials and labor shortages have remained.
“I think we certainly are not going to get the kind of fiscal stimulus that we’ve had over the past year-and-a-half, nor the monetary stimulus. So I think overall, the market’s handling all this remarkably well,” Ed Yardeni, Yardeni Research president and chief investment officer, told Yahoo Finance. “The perception is that the Federal Reserve is now seriously moving in the direction of tapering because the economy is doing fine. But any way you slice it or dice it, it’s going to be slower growth, slower earnings growth, slower economic growth, and that’s probably keeping the bond yield down and giving some weakness to the oil patch.”
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10:23 a.m. ET: U.S. service-sector activity cooled to an 8-month low in August amid Delta variant: IHS Markit
Activity in both the U.S. services and manufacturing sectors decelerated in August as the rapid spread of the Delta variant dampened overall growth.
IHS Markit’s flash August services business activity index fell to 55.2 from 59.9 in July. This was a steeper decrease than the dip to 59.2 expected, according to Bloomberg data, and brought the index down to the lowest level in eight months. Readings above the neutral level of 50.0 indicate expansion in a sector.
The manufacturing activity index also fell more than expected to 61.2 from 63.4 in July. This marked a four month low, and came in below the 62.0 economists were anticipating.
“The expansion slowed sharply again in August as the spread of the Delta variant led to a weakening of demand growth, especially for consumer-facing services, and further frustrated firms’ efforts to meet existing sales,” Chris Williamson, chief business economist at IHS Markit, said in a press statement.
“Not only have supply chain delays hit a new survey record high, but the August survey saw increasing frustrations in relation to hiring,” he added. “Jobs growth waned to the lowest since July of last year as companies either failed to find suitable staff or existing workers switched jobs.”
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10:02 a.m. ET: Existing home sales unexpectedly rose in July, marking back-to-back monthly gain
Sales of previously owned homes gained 2.0% in July, according to the National Association of Realtors’ monthly report, marking a second consecutive monthly gain. Consensus economists were looking for existing home sales to dip by 0.5% on the month, according to Bloomberg estimates.
In June, existing home sales had increased by 1.6%. July’s advance brought existing home sales to a seasonally adjusted annual rate of 5.99 million, or the highest level since March.
Home prices continued to creep higher in July as tight inventories and elevated demand continued to weigh on affordability. The median existing-home price came in at $359,900 for a jump of 17.8% compared to the same month last year.
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9:31 a.m. ET: Stocks gain, recovering from last week’s losses
Here’s where markets were trading just after the opening bell Monday morning:
Traders work at the trading floor in the New York Stock Exchange in New York, the United States, Aug. 19, 2021. The S&P 500 Index closed at 4,405.80 points, up 5.53 points, or 0.13 percent. The Dow Jones Industrial Average closed at 34,894.12 points, down 66.57 points, or 0.19 percent.The Nasdaq Composite Index closed at 14,541.79 points, up 15.88 points, or 0.11 percent. (Photo by Wang Ying/Xinhua via Getty Images)
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.
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.
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.
