Shares skidded and the price of gold surged on Monday as the number of people infected or killed by the viral outbreak that began in China surged, heaping more uncertainty on the economic outlook.
The decline followed a sell-off Friday on Wall Street and a weekend meeting in Riyadh, Saudi Arabia, of finance ministers and central bank chiefs of the Group of 20 major industrial economies where officials warned the outbreak that began in China is threatening to derail world growth.
“Interestingly, this time it’s markets outside of China (where the spread of coronavirus continues to slow) that have taken the brunt of the nervousness,” said Colin Cieszynski, chief market strategist at SIA Wealth Management in Toronto.
Britain’s FTSE 100 sank 2.7 per cent to 7,203.77, while the CAC 40 in Paris lost three per cent to 5,850.92. Germany’s DAX fell 2.9 per cent to 13,188.98.
In North America, major stock indexes opened sharply lower. The Dow dropped by more than three per cent or almost 1,000 points when the market opened. The TSX was also down 337 points, or just over two per cent, within minutes of opening.
The price of gold, viewed as a safe haven in times of peril, jumped $33.70 to $1,682.40 per ounce.
The price of oil is also sharply lower. West Texas Intermediate, the North American oil benchmark, is down by $2.21 a barrel to $51.08. It lost 50 cents to $53.38 per barrel on Friday.
Brent crude, the international standard, gave up $1.87, or 3.3 per cent, to $56.08 per barrel.
The 70 latest new cases raised South Korea’s total to 833, and two more deaths raised its toll to seven. The latest updates sparked selling of shares, pulling the benchmark Kospi 3.9 per cent lower to 2,079.04,
The viral outbreak that began in China has infected more than 79,000 people globally and killed more than 2,600 people. China has reported 2,592 deaths among 77,150 cases on the mainland.
Meanwhile, China cancelled its annual legislative session, usually held in early March, as part of efforts to contain the spread of the virus.
Travel restrictions, business closures and other efforts in China aimed at containing the spread of the virus have begun to disrupt supply chains and sales prospects for Apple and other big companies.
China trying to stimulate economy
Earlier Monday, officials in Beijing promised more help for companies and the economy, saying they expect their growth targets can still be reached despite the outbreak.
At a news conference Monday, finance and planning officials said they are looking at how to channel aid to businesses after President Xi Jinping publicly promised over the past week to ensure farming and other industries recover quickly.
The government is looking at “targeted tax reduction,” interest rate cuts and payments to poor and virus-hit areas, said an assistant finance minister, Ou Wenhan. “We will do a good job of implementing large-scale interest rate reduction and tax deferral and ensure effective implementation as soon as possible,” he said.
The latest measures failed to lift the Shanghai Composite, which lost 0.3 per cent to 3,031.23, though the smaller Shenzhen A-share market jumped 1.4 per cent.
Elsewhere in the region, the S&P ASX/200 in Sydney lost 2.3 per cent to 6,978.30. Hong Kong’s Hang Seng dropped 1.8 per cent to 26,820.88 and Thailand’s SET index lost 2.5 per cent. India’s Sensex lost 1.2 per cent to 40,689.12. Benchmarks in Jakarta, Taiwan and Singapore fell by more than 1 per cent.
Japan’s markets were closed Monday for a holiday.
Hopes that the outbreak had been contained were premature, Mizuho Bank said in a commentary, “and indeed, fears of secondary infections proliferating outside of China have come home to roost, sending risk assets in a tailspin and a wave of refuge-seeking into safe-haven.”
The yield on the 30-year treasury has dipped to record lows as investors sought the safety of U.S. government bonds. It fell to a record low of 1.886 per cent, according to Tradeweb, from 1.98 per cent late Thursday.
The yield on the more closely followed 10-year treasury was at 1.38 per cent. That yield, which is a benchmark for mortgages and other kinds of loans, was close to 1.90 per cent at the start of this year.
Expectations have been building among traders that the Federal Reserve will need to cut interest rates this year to help the economy. They’re pricing in a 90 per cent probability of at least one cut this year, up from an 85 per cent probability a day ago and a 58 per cent probability a month ago.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
