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TD Expects Bigger Losses From Loans in Canada Than in the U.S. – Yahoo Canada Finance

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TD Expects Bigger Losses From Loans in Canada Than in the U.S.

(Bloomberg) — Toronto-Dominion Bank is bracing for a bigger Covid-19 impact on consumer loans in Canada than in the U.S.

The Canadian lender, which has a U.S. bank-branch network that stretches from Maine to Florida, set aside C$951 million ($723 million) for souring loans in its domestic retail division, compared with C$897 for its U.S. operation. Higher provisions eroded profit in the fiscal third quarter, with results beating analysts’ estimates.

Key Insights

Toronto-Dominion set aside a record C$3.22 billion in the second quarter to brace for a wave of impaired loans from the pandemic. That appeared to be a peak, with provisions in the fiscal third quarter totaling C$2.19 billion, more than triple the amount a year earlier.Canada’s second-largest lender by assets has been facing shrinking net interest margins — the difference between what a bank charges for loans and pays for deposits — as central banks cut rates to shore up economies amid the Covid-19 pandemic. Overall net interest margins were 1.73% in the fiscal third quarter, compared with 1.91% in the prior three months and 1.93% a year earlier — shrinking to the lowest in at least 18 years.Toronto-Dominion had a record contribution from its investment in the U.S. online brokerage TD Ameritrade, thanks to a retail trading boom during the pandemic. That showed up in the lender’s U.S. retail business, which nevertheless saw a 48% earnings decline to C$673 million as loan-loss provisions surged from a year earlier.Canadian personal and commercial banking is Toronto-Dominion’s largest business, accounting for almost half the bank’s overall earnings. The domestic division had earnings of C$721 million in the quarter, down 49% from a year earlier amid higher loan-loss provisions.A flurry of trading activity and dealmaking has helped the investment-banking businesses of Canada’s banks through the third quarter. Toronto-Dominion followed the trend, with its TD Securities capital-markets division posting quarterly earnings of C$442 million, compared with C$244 million a year earlier.

Market Reaction

Shares of Toronto-Dominion have fallen 8.9% this year through Wednesday, compared with a 9.6% decline for the eight-company S&P/TSX Commercial Banks Index.

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Third-quarter net income fell 31% to C$2.25 billion, or C$1.21 a share. Adjusted per-share earnings totaled C$1.25, beating the C$1.23 average estimate of 11 analysts in a Bloomberg survey.Read more about Toronto-Dominion’s quarterly results here.

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Wall Street falls, S&P 500 down 1.2% as global markets swoon – CP24 Toronto's Breaking News

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Stan Choe, Damian J. Troise And Alex Veiga, The Associated Press


Published Monday, September 21, 2020 3:03PM EDT


Last Updated Monday, September 21, 2020 11:23PM EDT

NEW YORK – Wall Street slumped Monday as markets tumbled worldwide on worries about the pandemic’s economic pain, though the S&P 500 had pared its losses by the end of the day.

The drops began in Asia as soon as trading opened for the week, and they accelerated in Europe on worries about the possibility of tougher restrictions there to stem rising coronavirus counts. In the U.S., stocks and Treasury yields weakened, while prices sank for oil and other commodities that a healthy economy would demand.

The S&P 500 fell 38.41 points, or 1.2%, to 3,281.06. It extends the index’s losing streak to four days, its longest since stocks were selling off in February on recession worries. But a last-hour recovery helped the index more than halve its loss of 2.7% from earlier in the day.

The Dow Jones Industrial Average fell 509.72, or 1.8%, to 27,147.70 after coming back from an earlier 942 point slide. The Nasdaq composite slipped 14.48, or 0.1%, to 10,778.80 after recovering from a 2.5% drop.

Wall Street has been shaky this month, and the S&P 500 has dropped 8.4% since hitting a record Sept. 2 amid a long list of worries for investors. Chief among them is fear that stocks got too expensive when coronavirus counts are still worsening, Congress is unable to deliver more aid for the economy, U.S.-China tensions are rising and a contentious U.S. election is approaching.

Investors should expect the stock market to stay volatile, perhaps through the November elections, as they wait for these questions to shake out, said Jason Draho, head of asset allocation for the Americas at UBS Global Wealth Management.

Monday’s selling was exacerbated by worries about the possibility of more business restrictions in Europe, particularly as the United States heads into flu season, Draho said, and “some investors may be stepping aside.”

David Joy, chief market strategist at Ameriprise Financial, noted how Monday’s sharpest drops were concentrated in areas of the market most closely tied to the economy’s strength, such as energy companies and raw-material producers.

“It seems to be a broader expression of worry about the economy,” he said.

Bank stocks took sharp losses after a report alleged that several continue to profit from illicit dealings with criminal networks despite U.S. crackdowns on money laundering.

Shares of electric and hydrogen-powered truck startup Nikola plunged 19.3% after its founder resigned as executive chairman and left its board amid allegations of fraud. The company has called the allegations false and misleading.

General Motors, which recently signed a partnership deal where it would take an ownership stake in Nikola, fell 4.8%.

Investors are also worried about the diminishing prospects that Congress may soon deliver more aid to the economy. Many investors call such support crucial after extra weekly unemployment benefits and other stimulus expired. But partisan disagreements have held up any renewal of what’s known as the CARES Act.

“The stimulus money from the CARES Act, the impact of that, is running off and there doesn’t seem to be any urgency in Washington to get another package together,” said Joy of Ameriprise Financial..

Partisan rancour is only continuing to rise, deflating hopes further. The sudden vacancy on the Supreme Court following the death of Justice Ruth Bader Ginsburg is the latest flashpoint dividing the country.

Tensions between the world’s two largest economies are also weighing on markets. President Donald Trump has targeted Chinese tech companies in particular, and the Department of Commerce on Friday announced a list of prohibitions that could eventually cripple U.S. operations of Chinese-owned apps TikTok and WeChat. The government cited national security and data privacy concerns.

That raises the threat of Chinese retaliation against U.S. companies.

A U.S. judge over the weekend ordered a delay to the restrictions on WeChat, a communications app popular with Chinese-speaking Americans, on First Amendment grounds.

Trump also said on Saturday he gave his blessing to a proposed deal between TikTok, Oracle and Walmart to create a new company that would likely be based in Texas.

Layered on top of all those concerns for the market is the continuing coronavirus pandemic and its effect on the global economy.

On Sunday, the British government reported 4,422 new coronavirus infections, its biggest daily rise since early May. An official estimate shows new cases and hospital admissions are doubling every week.

Prime Minister Boris Johnson later this week is expected to announce a slate of short-term restrictions that will act as a “circuit breaker” to slow the spread of the disease. The number of cases has been rising quickly in many European countries and while authorities don’t seem ready to return to the tough restrictions on public life that they imposed in the spring, the new wave of the pandemic threatens the economic outlook.

The FTSE 100 in London dropped 3.4%. Other European markets were similarly weak. The German DAX lost 4.4%, and the French CAC 40 fell 3.7%.

In Asia, Hong Kong’s Hang Seng dropped 2.1%, South Korea’s Kospi fell 1% and stocks in Shanghai lost 0.6%.

The yield on the 10-year Treasury fell to 0.66% from 0.69% late Friday.

September’s losses for markets are reversing months of remarkable gains. Beginning in late March, when the Federal Reserve and Congress pledged massive amounts of support for the economy, the S&P 500 erased its nearly 34% in losses caused by the pandemic. Signs of budding economic improvements accelerated the gains, but growth has slowed recently.

AP Business Writer Joe McDonald contributed.

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S&P 500 sinks more than 2% as markets tumble worldwide – CP24 Toronto's Breaking News

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Stan Choe, Damian J. Troise And Alex Veiga, The Associated Press


Published Monday, September 21, 2020 3:03PM EDT


Last Updated Monday, September 21, 2020 11:23PM EDT

NEW YORK – Wall Street slumped Monday as markets tumbled worldwide on worries about the pandemic’s economic pain, though the S&P 500 had pared its losses by the end of the day.

The drops began in Asia as soon as trading opened for the week, and they accelerated in Europe on worries about the possibility of tougher restrictions there to stem rising coronavirus counts. In the U.S., stocks and Treasury yields weakened, while prices sank for oil and other commodities that a healthy economy would demand.

The S&P 500 fell 38.41 points, or 1.2%, to 3,281.06. It extends the index’s losing streak to four days, its longest since stocks were selling off in February on recession worries. But a last-hour recovery helped the index more than halve its loss of 2.7% from earlier in the day.

The Dow Jones Industrial Average fell 509.72, or 1.8%, to 27,147.70 after coming back from an earlier 942 point slide. The Nasdaq composite slipped 14.48, or 0.1%, to 10,778.80 after recovering from a 2.5% drop.

Wall Street has been shaky this month, and the S&P 500 has dropped 8.4% since hitting a record Sept. 2 amid a long list of worries for investors. Chief among them is fear that stocks got too expensive when coronavirus counts are still worsening, Congress is unable to deliver more aid for the economy, U.S.-China tensions are rising and a contentious U.S. election is approaching.

Investors should expect the stock market to stay volatile, perhaps through the November elections, as they wait for these questions to shake out, said Jason Draho, head of asset allocation for the Americas at UBS Global Wealth Management.

Monday’s selling was exacerbated by worries about the possibility of more business restrictions in Europe, particularly as the United States heads into flu season, Draho said, and “some investors may be stepping aside.”

David Joy, chief market strategist at Ameriprise Financial, noted how Monday’s sharpest drops were concentrated in areas of the market most closely tied to the economy’s strength, such as energy companies and raw-material producers.

“It seems to be a broader expression of worry about the economy,” he said.

Bank stocks took sharp losses after a report alleged that several continue to profit from illicit dealings with criminal networks despite U.S. crackdowns on money laundering.

Shares of electric and hydrogen-powered truck startup Nikola plunged 19.3% after its founder resigned as executive chairman and left its board amid allegations of fraud. The company has called the allegations false and misleading.

General Motors, which recently signed a partnership deal where it would take an ownership stake in Nikola, fell 4.8%.

Investors are also worried about the diminishing prospects that Congress may soon deliver more aid to the economy. Many investors call such support crucial after extra weekly unemployment benefits and other stimulus expired. But partisan disagreements have held up any renewal of what’s known as the CARES Act.

“The stimulus money from the CARES Act, the impact of that, is running off and there doesn’t seem to be any urgency in Washington to get another package together,” said Joy of Ameriprise Financial..

Partisan rancour is only continuing to rise, deflating hopes further. The sudden vacancy on the Supreme Court following the death of Justice Ruth Bader Ginsburg is the latest flashpoint dividing the country.

Tensions between the world’s two largest economies are also weighing on markets. President Donald Trump has targeted Chinese tech companies in particular, and the Department of Commerce on Friday announced a list of prohibitions that could eventually cripple U.S. operations of Chinese-owned apps TikTok and WeChat. The government cited national security and data privacy concerns.

That raises the threat of Chinese retaliation against U.S. companies.

A U.S. judge over the weekend ordered a delay to the restrictions on WeChat, a communications app popular with Chinese-speaking Americans, on First Amendment grounds.

Trump also said on Saturday he gave his blessing to a proposed deal between TikTok, Oracle and Walmart to create a new company that would likely be based in Texas.

Layered on top of all those concerns for the market is the continuing coronavirus pandemic and its effect on the global economy.

On Sunday, the British government reported 4,422 new coronavirus infections, its biggest daily rise since early May. An official estimate shows new cases and hospital admissions are doubling every week.

Prime Minister Boris Johnson later this week is expected to announce a slate of short-term restrictions that will act as a “circuit breaker” to slow the spread of the disease. The number of cases has been rising quickly in many European countries and while authorities don’t seem ready to return to the tough restrictions on public life that they imposed in the spring, the new wave of the pandemic threatens the economic outlook.

The FTSE 100 in London dropped 3.4%. Other European markets were similarly weak. The German DAX lost 4.4%, and the French CAC 40 fell 3.7%.

In Asia, Hong Kong’s Hang Seng dropped 2.1%, South Korea’s Kospi fell 1% and stocks in Shanghai lost 0.6%.

The yield on the 10-year Treasury fell to 0.66% from 0.69% late Friday.

September’s losses for markets are reversing months of remarkable gains. Beginning in late March, when the Federal Reserve and Congress pledged massive amounts of support for the economy, the S&P 500 erased its nearly 34% in losses caused by the pandemic. Signs of budding economic improvements accelerated the gains, but growth has slowed recently.

AP Business Writer Joe McDonald contributed.

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Tesla's "battery day" Could Be Bad News For Cobalt Miners – OilPrice.com

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Tesla currently uses the nickel-cobalt-aluminum cathode chemistry, which has a low cobalt content of about 5%, for their cars produced outside China.

The company also embraces the Responsible Minerals Initiative (RMI) to identify red flags such as child labour in their cobalt sourcing.

A reportedly signed deal between Tesla and Glencore (LON: GLEN) in June has cast doubts on the company’s statement that it’s close to eliminating cobalt from its batteries altogether.

The contract would involve supplies of 6,000 tonnes of cobalt from the Democratic Republic of Congo for Tesla’s new Shanghai factory.  

There are rumours about a wider cell design, which would bring down the cost of making batteries. That would be a critical development, given that they are the main cause of EVs’ hefty price tag.

Musk, 49, said earlier this year that the event would “blow your mind” and has been adding to the hype over the weekend by tweeting the upcoming announcement “it’s big” and “insane”, with “many exciting things to be unveiled.”

Analysts at Citigroup said that with Tesla having roughly 30% of the pure battery electric vehicle (BEV) market this year, its innovations in battery performance and chemistry have “significant implications for EV metal demand” and so Battery Day “could impact sentiment towards battery metals demand.”

Related: What’s Next For Gold?

Goldman Sachs believes the focus on Tuesday will be on “production capacity expansion, battery cost and new technology trends.”

Even if Tesla is not ready to transition to an entirely new type of battery, updates in the chemistry of its existing cells could also offer extra longevity, with high hopes the coveted “million-mile battery” will be unveiled.

Volkswagen’s own battery day earlier this month predicted 300 gigawatt-hours of batteries will be needed in 2025.

Over the last three years, Tesla has mass-manufactured batteries for its cars and energy storage products at its Gigafactory in Nevada with its partner Panasonic.

It has also begun sourcing cells from Contemporary Amperex Technology Co Ltd (CATL) and LG, and making battery packs for the made-in-China (MIC) version of its Model 3 sedans. 

Not so near-future news

Most of Tesla’s announcements have related to finding ways drive down production costs, increase the lifetime and charging speed of their batteries, and make sure the metals used in the making of its EVs are ethically sourced.

The carmaker events often cause short-term stock volatility, but what Musk shows at these presentations doesn’t always result in a working product within the announced timeline. 

In October 2016, the South African-born billionaire showed off different styles of roof tiles with solar cells that weren’t actually functional. The event helped Tesla score shareholder approval for a $2.6 billion acquisition of debt-saddled SolarCity.

So far, the carmaker has not produced or installed solar glass roof tiles in a significant volume.

A year later, Tesla unveiled its new Roadster vehicle prototype, “the fastest production car ever made”, which should have been available this year. Last May, however, Musk listed several other tasks Tesla would need to achieve first, suggesting it may not arrive until after next year.

Tesla’s “Autonomy Day”, held in April 2019, was all about self-driving cars or “robotaxis” being available in the second quarter of 2020. They have yet to pass all safety tests needed before beginning mass production. “All the things I said we would do them, we did it,” Musk said at the event. “Only criticism— and it’s a fair one — is sometimes I’m not on time. But I get it done and the Tesla team gets it done.”

By Mining.com

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