Stock markets moved higher on Wednesday even as investors digested results of a U.S. election that remained too close to call.
U.S. stock indexes including the S&P 500 and the Dow Jones Industrial Average were both up more than two per cent in the afternoon and the technology-focused Nasdaq fared even better.
Shares in large tech companies such as Amazon, Facebook, Adobe, Apple and Google were all up by more than five per cent. That’s largely because those companies have fared well during the pandemic and are likely to continue to see strong demand for their services no matter who is in the White House.
The TSX was a little more muted, with the main index up about 100 points or half a per cent. Energy companies and financial firms gained ground, while most other sectors lost ground.
The election outcome is of particular interest to Canadian energy companies, since the two presidential candidates have wildly different policies for the oil and gas sector. Donald Trump is more open to energy exploration, but favours U.S. firms. Joe Biden, meanwhile, is perceived to be a net negative for Canada’s oilpatch, but the sector will face challenges no matter who wins.
“Although tariffs on energy are less likely, tariffs on other products, such as steel and aluminum, may continue,” TD Bank chief economist Beata Caranci said in a note to clients on Wednesday. “Canadian producers know this all too well.”
One sector of the TSX that was a clear loser on the day was cannabis stocks, which saw something of a mixed bag in the results. On the upside, four more states voted to legalize recreational use of the drug with New Jersey, Arizona, Montana and South Dakota becoming the 12th, 13th, 14th and 15th states to do so.
But a Congress and White House divided across party lines is unlikely to see more drug liberalization laws come to pass anytime soon.
Business professor Michael Armstrong at Brock University studies the cannabis market, and he says more states legalizing cannabis is likely to add pressure to the federal government to do something, but Republican control of the Senate makes full legalization unlikely.
“In the next Congress you’re going to have more representatives representing states where they have local cannabis businesses,” he said in an interview. “They are going to have a strong incentive to support legalization at the federal level.”
That would be good news for cannabis companies, who have been waiting for permission to sell into the U.S. market.
But since it’s unlikely to happen, those same companies now face a bleaker prospect. Shares in Canada’s two biggest cannabis companies, Canopy Growth and Aurora Cannabis, both lost almost 10 per cent of their value.
Manulife’s chief investment strategist Philip Petursson said September and October during election years are typically bad months for the stock market, but November and December tend to be good. So Wednesday’s buying makes a lot of sense.
“Markets are already looking past the election to a continued recovery and favourable seasonality,” Petursson said. “Trying to gain an edge in the equity markets based upon potential or real election results is a greatly unrewarding exercise.”
While the winner of the election is still unknown, it’s looking more and more clear that the expected Democratic sweep of all three branches of government is not happening, which means that more gridlock in Washington can be expected.
But that isn’t necessarily a bad thing, at least from the perspective of the stock market. Should Biden emerge victorious while the two branches of Congress remain as they were, that could be an ideal situation for markets, said Dennis Mitchell, CEO of Toronto-based money manager Starlight Capital.
“Markets are rallying because the chaotic status quo is shifting to more predictability and stability,” he said. “Drop Trump, take Biden but keep the House and Senate where they are … This is the perfect scenario for markets and they are showing their support for this outcome.”
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The Canadian Press
MIAMI — Brad Six becomes Santa Claus, pulling his black boots over his red pants in the office of a Miami outdoor supply company. It’s hot, so he forgoes the traditional heavy jacket for a lightweight vest and grabs his Santa hat.But before sliding it on, the gray-bearded 61-year-old dons a plastic face shield and then takes his chair positioned behind a plexiglass sheet.”Getting paid is nice, but to get your battery recharged and to really get something lasting out of it requires interacting with the kids — you don’t get a lot of that this year,” said Six, who first portrayed Santa 35 years ago.This is Santa Claus in the Coronavirus Age, where visits are conducted with layers of protection or online. Putting hundreds of kids daily onto Santa’s lap to talk into his face — that’s not happening for most. The physical attributes that make the perfect Santa align perfectly with those that make COVID-19 especially deadly.“Most of us tick all the boxes: We are old, we are overweight, we have diabetes and if we don’t have diabetes, we have heart disease,” said Stephen Arnold, the president of IBRBS, an association formerly known as the International Brotherhood of Real Bearded Santas.That has spurred creativity in Santa’s workshops. Santas conducting in-person visits are using some combination of masks, the outdoors, barriers and distance for safety. Others are doing virtual visits, where children chat with Santa online for prices typically ranging from $20 to $100, depending on the length and extras, such as whether customers want a recording. Some Santas are taking the season off.“Santa safety is our No. 1 concern” and negotiated into every contract, said Mitch Allen, president of HireSanta, one of the nation’s largest agencies. He said the pandemic initially dried up his business, but it bounced back, especially online.The average Santa makes $5,000 to $10,000 during a normal season, Allen said. That’s a welcome bonus for men often retired on a fixed income, but many Santas say revenue is down as corporate parties and other lucrative gigs evaporated.Jac Grimes, a Santa in Greensboro, North Carolina, gave up home visits, about a third of his business. He did it not just for his own health, but to prevent becoming a superspreader, fearing he’d pass the virus from one family to the next.At a farmers market he annually works, Grimes and his wife dress up as Santa and Mrs. Claus and sit in a parking lot where they to talk to people who remain inside their cars. Some homeowners associations are moving their annual Santa-visitation parties outdoors; Grimes will arrive in his red convertible to greet the crowds from afar.One of the hardest adjustments Santas have made is wearing masks that hide their painstakingly grown beards.“Santa performers are fairly vain people — if they are good,” Grimes said.The virus has many Santas and parents turning to virtual visits, which are booked through each Santa’s personal website or agencies like Allen’s. That often has Santas turning to their children and others for help mastering the computer skills needed.“It has been a challenge,” said Christopher Saunders, a Santa performer in Tool, Texas, a small town near Dallas.But Saunders and others say virtual sessions are a good if imperfect substitute for in-person visits. Parents fill out questionnaires, allowing performers to personalize their patter, and a side benefit is that the sessions aren’t rushed. Many Santa mall visits last no more than two minutes to keep the line moving.“You get a different energy,” Saunders said of the virtual visits. “You can see the child’s expressions, as pure as they are.”Jim Beidel, a Santa performer near Seattle, said knowing the children’s personal stories, such as their friends and school, helps Santas sell their Christmas magic.“It really enhances the engagement, the suspension of disbelief, especially among the older children,” he said.But even Santas with the best gigs are hurting. Howard Graham usually portrays Santa in the grand foyer of New York’s Radio City Music Hall during its Christmas show featuring the Rockettes. That’s gone, so he’s doing virtual visits and five days with a historic railroad in Pennsylvania. Still, he’s taking a financial and emotional hit.“I love what I do … bringing them (children) a little bit of smiles and hope,” said Graham, who has played Santa at Radio City for eight years. “I am going to do what I can not to change that.”That was also Six’s goal as he settled recently into Santa’s throne for a three-hour shift at Miami’s Bass Pro Shops.As families sat in front of the plexiglass for photos, Six tilted his head so his face shield didn’t reflect the camera’s flash. He cheerfully waved children around the plexiglass so they could tell him their wish list, keeping them 6 feet (1.8 metres) back. As he wished them a Merry Christmas, an elf swooped in with disinfectant, wiping the plexiglass and bench before the next group sat.Six said the arrangement is “a little easier physically on Santa’s back because he doesn’t have to pick anybody up, but it’s not as enjoyable because Santa doesn’t get the interaction he normally gets.”But for families, sitting with Santa, even if behind a shield, is a bit of normalcy in abnormal times.Paul and Sarah Morris and their children, 5-year-old Theo and Sophy, 4, were among the first to visit Six that night. An Air Force family visiting from Hawaii, the Morrises cajoled their children into hugging for their photo. “Stop wiggling,” Theo said, scolding his sister before each sibling told Santa their Christmas wish. Sophy wanted candy; Theo, a remote control Ford Mustang.“This is definitely different,” Sarah Morris said of the setup, “but the kids are excited and that’s what matters.”Terry Spencer, The Associated Press
Royal Bank of Canada warns of headwinds after better-than-expected profit – Financial Post
Article content continued
“We expect mortgage growth to slow going forward as pent-up housing demand begins to cool,” Royal Bank Chief Executive Dave McKay said on the call.
Royal Bank joined rivals including Bank of Nova Scotia , Bank of Montreal and National Bank of Canada in reporting better-than-expected fourth-quarter profits as it set aside less money than analysts had estimated to cover future bad loans.
That came after three straight quarters of adding to provisions for credit losses, including on performing loans, that have built up record reserve levels.
But should the pessimistic scenario materialize, allowances on performing loans would have to increase by about 18 per cent, Royal Bank Chief Risk Officer Graeme Hepworth said.
Amid short-term headwinds like the second coronavirus pandemic wave, and the end of loan deferrals and government support, “we do see a world where delinquencies and … impairments will start to increase through 2021,” Hepworth said.
That would come as trading and underwriting activity, which helped the bank’s capital markets unit generate near-record earnings of $2.8 billion this year, moderates, executives said.
Royal Bank reported fourth-quarter adjusted net income of $2.27 per share, up 5 cents from a year earlier, and better than estimates of $2.05.
National Bank, the smallest of Canada’s six largest lenders, which also reported results on Wednesday, took provisions of $110 million, versus the nearly $160 million that was expected. That helped it post adjusted profit of $1.69 a share, compared with expectations of $1.52.
Royal Bank shares slipped 0.3 per cent to $107.72 in morning trading on the Toronto Stock Exchange, while National Bank’s stock dropped 1.1 per cent to $72.67. The TSE’s stock benchmark fell 0.1 per cent.
© Thomson Reuters 2020
Conservatives push for parliamentary committee study into failed vaccine deal – CTV News
The federal Conservatives are calling for a parliamentary committee to probe the Liberal government’s plan to refit a National Research Council facility in Montreal to start producing a COVID-19 vaccine.
The government announced the $44-million project in May as part of a partnership between the NRC and a Chinese company to develop a made-in-Canada vaccine.
By August, the Liberals confirmed the partnership with CanSino Biologics had fallen apart, after the Chinese government had blocked shipments of vaccine samples meant to be used in clinical trials in Canada.
Conservative Leader Erin O’Toole has criticized the Liberals for putting too much faith in Beijing, and blamed the failed deal for Canada being late to order vaccines from other foreign companies.
The proposed committee probe would look at the investment intended to upgrade the NRC facility and how the deal impacted Canada’s efforts to ensure the country has timely access to vaccines.
Prime Minister Justin Trudeau admitted last week that Canada might have to wait for other countries to get access to vaccines, though the government and vaccine-makers have since downplayed any delay.
This report by The Canadian Press was first published Dec. 1, 2020.
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