Stock markets soared on Monday after German pharmaceutical giant Pfizer said early data suggests its COVID-19 vaccine seems safe and effective, raising hopes that the world economy is now one step closer to getting back to normal.
The vaccine candidate, known as BNT162, “has emerged as a front-runner in the tight race, and the latest data were encouraging, though logistical and supply chain challenges remain,” said Cinney Zhang, a pharmaceutical industry analyst with Bloomberg Intelligence.
Pfizer’s shares gained 15 per cent. Its vaccine partner BioNTech did even better, up 25 per cent.
The companies said in a release early Monday morning that out of roughly 44,000 people in the Phase 3 trial, only 94 have contracted the virus, and there are no serious side effects reported so far. This “raises the hope that the patient demographics will be broad enough for an early approval,” Zhang said.
Any economic recovery depends on checking the pandemic, and investors pounced upon the news. Pfizer’s data is only preliminary and does not mean a vaccine is imminent. Getting the vaccine to billions of people will be a massive undertaking, even if it is approved.
But even the potential of an effective vaccine on the horizon was all investors needed to shake off some of their doom and gloom.
“Investors may be seeing this as a potentially game-changing announcement as stocks in some of the sectors that had been particularly hammered by COVID have been soaring, including United Airlines (up 19.5 per cent), Royal Caribbean Cruises (up 21.1 per cent ) and MGM Resorts (up 17.2 per cent ),” said Colin Cieszynski, chief market strategist with SIA Wealth Management in Toronto.
“Moderate overnight gains in the markets have morphed into explosive gains this morning.”
The Dow Jones Industrial Average opened more than 1,500 points higher, or 4.2 per cent. In Toronto, the S&P/TSX Composite Index was up more than 400 points, or almost three per cent.
Interestingly, the one sector that was lower was technology, as big tech company stocks that have done very well in the pandemic gave back some of their gains. Netlfix was down six per cent, Amazon was down by about three per cent, and video conferencing software company Zoom was down by 16 per cent, on speculation that booming demand for the company’s services may soon drop from its current level.
In Europe, France’s CAC 40 jumped 5.6 per cent to 5,239, while Germany’s DAX surged 5.1 per cent to 13,112. Britain’s FTSE 100 gained four per cent to 6,145.
U.S. election outcome also helped
Markets were already buoyant about the result of the U.S. elections, which saw Democrat Joe Biden win the presidency.
“This means less uncertainty, less turmoil in terms of foreign relations, and reversal of some futile policies which were put by the Trump administration,” Naeem Aslam, chief market analyst at Ava Trade, said in a commentary.
Many analysts expect trade tensions to de-escalate under a Biden presidency. Still, not all trade tensions are expected to vanish even if Biden rolls back some of the tariffs imposed by President Donald Trump on U.S. trading partners, especially China, in the past several years.
Donald Trump’s apparent loss of the White House, while Republicans maintain control of the Senate, also had investors breathing a sigh of relief. (Evan Vucci/The Associated Press)
The European Union pressed ahead Monday with plans to impose tariffs and other penalties on up to $4 billion US worth of U.S. goods and services over illegal American support for plane maker Boeing. That followed a World Trade Organization ruling in the U.S.’s favour over EU support for Airbus.
In Asian trading, Japan’s Nikkei 225 surged 2.1 per cent to finish at 24,839.84. Australia’s S&P/ASX 200 added 1.8 per cent to 6,298.80. South Korea’s Kospi advanced 1.3 per cent to 2,447.20. Hong Kong’s Hang Seng rose 1.2 per cent to 26,016.17, while the Shanghai Composite gained 1.9 per cent to 3,373.73.
For now, investors seem inclined to shrug off Trump’s refusal to concede and threats of legal action. With Republicans expected to retain their grip on a majority in the Senate, they are betting on continuity in tax, regulatory and other policies, analysts said.
Oil price gains $3
“Trump not conceding a loss is near-term noise looking to wrong-foot Biden at the start of his presidency, while Republicans in a position to not concede ground on legislation may continue to frustrate Biden’s agenda,” Mizuho Bank said in a commentary.
If Republicans remain in charge of the Senate, chances for a big package of economic aid are weaker, and the Federal Reserve will likely need to step up with more support, said Jeffrey Halley of Oanda.
“More easing is almost certainly on the way at December’s FOMC meeting,” Halley said, referring to the Fed’s policy-making committee. “Looser monetary policy equals higher asset prices in a zero per cent interest rate world.”
Despite rising infections and deaths from the pandemic, economies have continued to recover from the shocks of earlier shutdowns to combat outbreaks.
Biden has vowed to move decisively to try to counter the worsening coronavirus pandemic, which has sapped economic growth, trade and travel, as the U.S. and Europe face a troubling rise in infections. Even if the strictest lockdowns don’t return in the United States, the worsening pandemic may dampen consumption and erase profits.
In energy trading, U.S. benchmark crude gained more than 10 per cent, or $3.16, to $40.30 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose $3.08 to $42.53 a barrel.
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.
