Global equities slid on Thursday on concerns about the long-term impact of the new coronavirus and renewed U.S.-China tensions, though oil markets ignored those worries and marched to a 2-1/2 month highs.
Canada’s main stock index edged lower on Thursday, weighed by bleak monthly domestic jobs data .
The nation lost 226,700 jobs in April, ADP payroll data showed, as the lockdowns imposed to the curb the spread of the coronavirus impacted economic activities with trade, leisure and hospitality among the hardest hit industries.
Story continues below advertisement
The Toronto Stock Exchange’s S&P/TSX composite index was unofficially down 112.78 points, or 0.75%, at 14,884.85.
The energy sector slid 2%, while the financial and industrials sectors were both down 1%.
The materials sector, which includes precious and base metals miners and fertilizer companies, lost 2% as gold futures fell.
Wall Street ended lower on Thursday, a day after hitting two-month highs, on a fresh wave of China-U.S. tensions that raised doubts about the trade deal reached early this year between the world’s two largest economies.
Unofficially, the Dow Jones Industrial Average fell 100.21 points, or 0.41%, to 24,475.69, the S&P 500 lost 23.1 points, or 0.78%, to 2,948.51, and the Nasdaq Composite dropped 90.90 points, or 0.97%, to 9,284.88.
The majority of the 11 S&P sector indexes declined, with energy and technology each down more than 1%.
The U.S. dollar traded in a narrow range as investors weighed the impact of global business lockdowns and the euro’s four-day rally against the U.S. currency ran out of steam.
Story continues below advertisement
Gold fell more than 1% as a strong dollar pushed it off this week’s 7-1/2 year peak.
Rising tensions between Washington and Beijing gave investors pause.
President Donald Trump warned the United States would react “very strongly” against China trying to gain more control over Hong Kong through new national security legislation. U.S. Secretary of State Mike Pompeo on Wednesday called China’s $2 billion pledge to fight the pandemic “paltry.”
“The biggest threat to the U.S. market this year is actually the potential for ignition of the tariff war, between the U.S. and China,” said Kristina Hooper, chief global market strategist at Invesco in New York.
Stocks in the short run are driven by news flow, though bias is to the upside because of easy monetary policy from the Federal Reserve, Hooper said.
MSCI’s gauge of stocks across the globe shed 0.69%, while the pan-European STOXX 600 index lost 0.75%.
Story continues below advertisement
Purchasing manager index surveys (PMIs) in Europe confirmed economic activity has begun to return, though they were far from stellar.
Euro zone-wide figures came in better than expected overall but Germany’s improvement undershot forecasts. It was the third month in a row that the surveys were plonked firmly in economic contraction territory.
Oil rose on the view that slumping fuel demand should rebound. Brent, the international benchmark, has bounced up $20 a barrel over the past month.
U.S. crude futures rose 43 cents to settle at $33.92 a barrel, while Brent settled up 31 cents at $36.06 a barrel.
The market absorbed the latest glut of government debt to pay for coronavirus support programs fairly smoothly. The United States on Wednesday auctioned $20 billion of 20-year debt, the first such sale since 1986.
Italy sold roughly the same on Thursday and Spain said it will need to raise almost 100 billion euros more than planned.
Story continues below advertisement
The benchmark U.S. 10-year notes fell 0.4 basis points to yield 0.6736%.
U.S. weekly jobless claims came in at a seasonally adjusted 2.4 million, in line with a Reuters survey of economists ahead of the data and well off the record 6.867 million at the end of March.
The dollar index rose 0.22%, with the euro down 0.23% to $1.0952. The Japanese yen weakened 0.13% versus the greenback at 107.68 per dollar.
U.S. gold futures settled 1.7% lower at $1,721.90 an ounce.
Reuters
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.
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.
