Business

Stocks, bond yields drop as recovery risk lingers – BNN

Published

4 years ago

September 17, 2020

U.S. stocks fell and Treasuries gained as investors mulled whether the levels of stimulus being provided is enough amid a gradual economic recovery.

The benchmark S&P 500 dropped for a second day, though it found some support after bouncing off its 50-day moving average. Technology shares were the biggest decliners, with Apple Inc. and Microsoft Corp. weighing on the Nasdaq Composite.

Investors are snapping up long-term Treasuries, capturing a brief spike higher in yields following the Federal Reserve’s policy decision Wednesday. Although Fed Chair Jerome Powell said the central bank will maintain easy policy after easing its inflation policy, he didn’t provide clarity as to just how high it can go and for how long. That, along with the lack of fresh details on the Fed’s plans for its bond-buying program, sparked long-end demand.

“It remains to be seen how the long-term projection of near zero interest rates and more free-flying inflation will actually play out for the economy,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial Corp. “And the somewhat dour tone from the Fed could weigh on investors.”

The number of Americans applying for jobless benefits resumed its decline, while continuing claims fell by almost 1 million in the week ended Sept. 5.

All eyes remain on central bankers and their role in propping up economies still reeling from the coronavirus shock. Bank of England policymakers said they were exploring negative rates to counter ongoing risks to the labor market after voting unanimously to maintain their key interest rate at 0.1 per cent, causing the pound to slide to an intraday low. Earlier the Bank of Japan kept its asset-purchases and bond-yield targets in place.

Recent flare-ups of the virus and a fading post-pandemic recovery have renewed calls for more fiscal support as well. Fed officials have stressed in recent weeks that the U.S. recovery is highly dependent on the nation’s ability to better contain infections, and that further fiscal stimulus is likely needed to support jobs and incomes.

“Consumer sentiment data and the employment picture still reflect a fragile economic recovery,” said Matt Miskin, co-chief investment strategist at John Hancock Investments. “Powell did not bring up the need for further fiscal support multiple times yesterday just for the sake of it. Monetary policy has its limits, the lack of fiscal policy support leaves significant risks to this recovery.”

Meanwhile, the White House strongly signaled Wednesday that it is willing to increase its offer in talks with Democrats, and that Senate Republicans should go along in order to seal a stimulus deal in the next week to 10 days.

Elsewhere, crude oil traded above US$40 a barrel. Gold declined.

These are some of the main moves in markets:

Stocks

The S&P 500 Index fell one per cent to 3,352.09 as of 11:53 a.m. New York time, the largest fall in a week.
The Dow Jones Industrial Average declined 0.4 per cent to 27,931.38, the first retreat in a week.
The Nasdaq Composite Index fell 1.7 per cent to 10,862.23, the largest fall in a week.
The Nasdaq 100 Index fell 1.9 per cent to 11,029.44, the lowest in more than five weeks on the biggest fall in a week.
The Stoxx Europe 600 Index fell 0.5 per cent to 371.23, the first retreat in a week.

Currencies

The Bloomberg Dollar Spot Index declined 0.1 per cent to 1,163.81, reaching the lowest in more than two weeks on its fifth straight decline.
The British pound declined 0.1 per cent to US$1.2948, the largest fall in a week.
The euro rose 0.1 per cent to US$1.1827.
The Japanese yen appreciated 0.2 per cent to 104.76 per dollar, the strongest in seven weeks.

Bonds

The yield on two-year Treasuries declined one basis point to 0.13 per cent.
The yield on 10-year Treasuries declined two basis points to 0.68 per cent, the largest fall in a week.
Germany’s 10-year yield fell one basis point to -0.49 per cent, the lowest in more than a week.
Britain’s 10-year yield dipped three basis points to 0.183 per cent.

Commodities

West Texas Intermediate crude rose 1.8 per cent to US$40.87 a barrel, the highest in two weeks.
Gold weakened 0.7 per cent to US$1,944.97 an ounce, the largest decrease in more than two weeks.

–With assistance from Kamaron Leach, Liz Capo McCormick and Lu Wang.

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Business

Roots sees room for expansion in activewear, reports $5.2M Q2 loss and sales drop

Published

1 day ago

September 13, 2024

Anne Joseph

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.

Companies in this story: (TSX:ROOT)

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Business

Talks on today over HandyDART strike affecting vulnerable people in Metro Vancouver

Published

2 days ago

September 12, 2024

Anne Joseph

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.

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Business

Transat AT reports $39.9M Q3 loss compared with $57.3M profit a year earlier

Published

2 days ago

September 12, 2024

Anne Joseph

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.

Companies in this story: (TSX:TRZ)

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