North American major indexes closed higher on Wednesday with the Nasdaq’s 1.6% advance leading gains, after the U.S. Federal Reserve kept interest rates unchanged and comments from its top official fueled investor optimism rate hikes were done even though the central bank left the door open for more.
Fed Chair Jerome Powell said policy makers would proceed carefully although they were not yet confident financial conditions were restrictive enough to get inflation as low as the central bank would like.
Trading was choppy at the start of Powell’s press conference but the major equity indexes started to regain lost ground after about 20 minutes, then went on to hit session highs.
This was because the Fed’s top official “wasn’t as assertive about higher-for-longer” rates as he has been in past press conferences, according to Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
Charlie Ripley, senior investment strategist for Allianz Investment Management, wrote that while there is still a potential risk for the Fed to raise rates again, Powell’s commentary suggests that “the bar has become higher for rate hikes.”
Edward Moya, senior market analyst at Oanda wrote that while Powell insisted he was keeping options open for a hike “he didn’t seem very convincing.”
Earlier, the stock market was boosted from falling bond yields after the U.S. Treasury Department said it will slow the pace of increases in its longer-dated debt auctions in the November-January quarter and expects it will need one more additional quarter of increases after this to meet its financing needs.
The S&P/TSX composite index closed up 205.53 points, or 1.09%, at 19,079.00, notching its third day of gains and its highest finish since last Wednesday.
Last week, the Canadian central bank also kept interest rates steady and said the past 10 rate increases are working to cool the economy.
In Canada, the manufacturing PMI rose in October for the first time in three months, but the sector remained in contraction as output along with new orders declined and cost pressures rose, data showed on Wednesday.
“The hiking cycle is over and the question now becomes when will we see rate cuts,” said Allan Small, senior investment advisor at Allan Small Financial Group with iA Private Wealth.
“But I don’t think anything (rate cuts) will happen, at least until spring or summer of next year,” Small added.
First Quantum Minerals dropped 8%, taking its three-day fall to about 53%, on jitters over the Panama government’s decision to hold a referendum to decide whether to revoke the Canadian miner’s Cobre mine permit.
Parka maker Canada Goose shed 8.8% after the company cut its annual sales forecast in a sign that a sharp rebound in China was starting to falter and sales in the U.S. stayed under pressure.
Thomson Reuters shares rose 2% after the parent company of Reuters News reported higher-than-expected third-quarter profit and announced a new $1 billion share repurchase program.
Centerra Gold jumped 9.0% after the gold miner beat third-quarter revenue estimates and posted quarterly profit compared to a loss in the previous year.
The TSX utilities index advanced 3.7%, leading sectoral gains as Brookfield Infrastructure Partners rose 9.0% after reporting higher revenue in the third quarter.
The TSX energy sector climbed 1.0% following an over 2% rise in crude prices as the conflict in the Middle East remained in focus.
The Dow Jones Industrial Average rose 221.71 points, or 0.67%, to 33,274.58, the S&P 500 gained 44.06 points, or 1.05%, to 4,237.86 and the Nasdaq Composite added 210.23 points, or 1.64%, to 13,061.47.
Among the S&P 500′s 11 major sectors only two lost ground with energy falling 0.3% while consumer staples edged down 0.06%. Top gainers were rate sensitive information technology, which rose 2% and communications services, which rose 1.8%.
In individual stocks, Shares of Advanced Micro Devices jumped almost 10% after an upbeat forecast for sales of chips for artificial intelligence signaled progress in its bid to catch up with market leader Nvidia.
Earnings season has been a mixed bag for stocks even though 79.7% of the 310 S&P 500 companies that had reported at the time of LSEG’s latest update beat analyst expectations for the quarter while only 16.1% had fallen short of estimates.
Still investors were disappointed by many quarterly updates.
Estee Lauder shares tumbled 18.9% after the beauty products maker cut its annual profit outlook. And shares in Payroll processor Paycom Software sank 38.5% after it projected for downbeat fourth-quarter revenue.
Tinder owner Match Group dropped 15.3% after it also forecast fourth-quarter revenue below estimates.
Advancing issues outnumbered declining ones on the NYSE by a 2.36-to-1 ratio; on Nasdaq, a 1.20-to-1 ratio favored advancers.
The S&P 500 posted 7 new 52-week highs and 30 new lows; the Nasdaq Composite recorded 24 new highs and 297 new lows.
Trading was brisk on U.S. exchanges with 11.20 billion shares changing hands compared with the 10.67 billion average for the last 20 sessions.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
