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TSX closes higher, US equity markets lose ground – BNNBloomberg.ca

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4:20 p.m. ET: TSX closes higher, U.S. equity markets lose ground

The S&P/TSX Composite Index extended its rally Tuesday, rising 1.07 per cent while benchmark indices south of the border erased gains to close in the red. The broad market S&P 500 closed 0.52 per cent lower, the Dow Jones Industrial Average fell a modest 0.13 per cent and the tech-heavy Nasdaq Composite Index was the laggard with a 1.40 per cent drop.

It’s shaping up to be a busy week for the Nasdaq, with a slew of tech titans reporting earnings as investors digest the early fallout of the COVID-19 pandemic and economic lockdown.

In Toronto, eight of the eleven TSX subgroups closed in positive territory, led by energy, consumer discretionary and financials. Health care, consumer staples and information technology bucked the trend to end Tuesday’s trading session lower.

In all, 150 of the TSX’s 230 constituents finished in the green.

Lumber stocks were noticeable outperformers, with Canfor Corp., West Fraser Timber Ltd. and Norbord Inc. all notching double-digit gains to rank among the top-performing stocks on the TSX.

Global oil prices remained mixed, with the price for U.S. benchmark West Texas Intermediate for June delivery falling 0.8 per cent to US$12.70 per barrel, while the world benchmark Brent crude held on to a three per cent gain.

WTI has been roiled by a number of technical changes to the methodology of major oil funds, which hold large volumes of the futures contracts for American oil. Those funds have been rebalancing their holdings toward contracts for later delivery in an effort to avoid having their net asset value fall below zero, after contracts for May delivery plunged into negative territory shortly before their expiration last week.

While some of the movement in near-dated crude contracts is a result of technical trading mechanisms interfering with the organic supply and demand dynamics of crude pricing, concerns remain about  global oversupply in the face of demand destruction resulting from the virus outbreak.

The Canadian dollar held near 71.46 cents U.S., up two-tenths of a cent against its American counterpart, though the greenback was broadly weaker against all of its major-market peers.

2:00 p.m. ET: North American equity markets retrace lost ground into mid-afternoon

North American equity markets bounced off the lows into the waning hours of Tuesday’s trade, with the S&P/TSX Composite Index rising 1.2 per cent, the S&P 500 and Dow Jones Industrial Average up a little more than a quarter of a per cent and the Nasdaq Composite Index shedding about half a per cent.

In Toronto, eight of the 11 TSX subgroups were higher, led by energy, consumer discretionary and financials. Health care, information technology and consumer staples remained in negative territory.

154 of the composite’s 230 constituents were in the green, led by Canfor Corp., Teck Resources Ltd. and NFI Group Inc.

Oil prices remained mixed, with U.S. benchmark West Texas Intermediate down about 2.5 per cent to trade at US$12.50 per barrel while the global Brent crude price was up about two per cent. Alberta’s Western Canadian Select was trading lower, down 29 per cent to trade at US$4.62 per barrel.

The Canadian dollar moderated gains, up two-tenths of a cent against its U.S. counterpart to trade at 71.45 cents U.S.

11:00 a.m. ET: North American markets give back early gains into late morning

North American equity markets traded near session lows into the late morning, with the S&P/TSX Composite clinging to a modest 0.3 per cent gain, and benchmark stock indices south of the border sliding into the red. The S&P 500 and Dow Jones Industrial Average both traded modestly lower, while the tech-heavy Nasdaq Composite Index fell about one per cent.

It’s a busy week for Nasdaq-listed stocks, with a slew of earnings from tech titans including Google parent company Alphabet Inc., Facebook Inc., Apple Inc., Amazon.com Inc. and Microsoft Corp. all reporting earnings in the coming days.

In Toronto, seven of the 11 TSX subgroups were trading in positive territory, with energy, consumer discretionary and financials notching the largest percentage gains. Health care, information technology and materials posted the largest losses.

U.S. benchmark oil prices moderated some losses, with WTI trading about four per cent lower at about US$12.25 per barrel.

9:40 a.m. ET: North American equity markets extend rally in risk-on trade

North American equity markets rallied into the opening trade Tuesday, extending Monday’s gains as a risk-on trade saw investors buy into assets like equities. The S&P/TSX Composite Index – now up more than 30 per cent from the March 23 trough – rose about one per cent out of the gate, the S&P 500 and Dow Jones Industrial Average gained about one-and-a-half per cent and the Nasdaq Composite Index was up one per cent.

Toronto’s benchmark index has now recouped about half of its losses from the February 20 peak to that March trough.

Global oil prices were mixed, with international benchmark Brent up nearly five per cent while American West Texas Intermediate for June delivery was essentially unchanged at US$12.75 per barrel. WTI has been notably volatile due to changes in the methodology of some major oil funds, as they shift their holdings away from futures for first-month delivery into longer-dated contracts.

The moves have been made in an effort to prevent the funds from having negative net asset values after last week’s historic plunge in the expiring May contract, which traded at negative US$40 per barrel ahead of expiration.

Alberta’s Western Canadian Select fell nearly 16 per cent to trade at US$5.48 per barrel, though Canadian crude is only priced a handful of times per day.

The Canadian dollar gained four-tenths of a cent against its U.S. counterpart to trade at 71.68 cents U.S. However, the greenback was showing noticeable weakness against all its global peers as investors took a more risk-on tone and sold traditional safe-haven assets.

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Lufthansa sets 2024 goal, eyes capital increase

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Germany’s flagship carrier Deutsche Lufthansa said it aims to boost its return on capital employed (ROCE) and laid out plans for a capital increase as it prepares for a business recovery amid an easing coronavirus pandemic.

The largest German airline aims to have an adjusted EBIT margin of at least 8% and an adjusted ROCE of at least 10% in 2024, it said late on Monday.

Adjusted ROCE was –16.7% in 2020 and 6.6% in 2019.

The group added it had mandated banks to prepare a possible capital increase, though size and timing have not yet been determined and the German state, which has bailed out the airline during the pandemic, has not yet given its approval.

 

(Reporting by Ludwig Burger; editing by Jonathan Oatis)

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Virtual Law Firms Are on the Rise in Canada

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Virtual law firms have been on the rise for a while. In a 2019 roundtable discussion conducted by the American Bar Association, several firm leaders met to discuss the growing presence of online legal services. The consensus was clear: virtual is the new reality.

That was 2019. In the intervening two years, the world was gripped by a global pandemic that forced most people to conduct their business indoors. As you might have guessed, demand for contactless, remote legal services has only ballooned since that roundtable discussion.

While the roundtable primarily focused on the legal industry in the US, you can witness similar trends here in Canada. Like the taxi industry and entertainment distribution industry before it, law is increasingly moving toward digital spaces.

This article explores what virtual law firms are, what benefits they present for Canadian clients, and what kind of clients are driving the virtual law boom.

Not a Change but an Addition

At its best, the shift from brick-and-mortar law firms to virtual isn’t an alteration of legal services as much as it is an addition.

The best virtual law firms do not compromise on service – they still offer traditional legal services with the expertise of real lawyers. The only difference is that they have added a new medium: a more accessible, transparent means of communication and billing.

Why Canadians Choose Online Law Firms

For some clients, the traditional brick-and-mortar firm was hard to give up. They viewed their lawyer like they viewed their doctor: a professional whose in-person expertise couldn’t be replicated in a digital space. Then, the pandemic hit. As millions more Canadians acclimatized to working online, they also habituated to the idea of doing business online.

 

Credit: Ketut Subiyanto Via Pexels

The benefits were immediately apparent. Virtual law firms feature streamlined communication, available seven days a week. They eliminate the need to go to a physical office. They offer all the same legal expertise and services as a brick-and-mortar lawyer. And, crucially, they often leverage transparent pricing: flat, predetermined legal fees with no hidden costs. A client looking for affordable legal services in Mississauga or Toronto, for instance, can simply click a few buttons and hire a lawyer on the spot.

Who Is Using These New Services?

You might be wondering: do they wheel a computer into the courtroom when someone avails themselves of a virtual lawyer? No, that isn’t quite the case.

Clients tend to use virtual law firms for everyday legal services – not necessarily courtroom representation. A client looking to create a will or name a power of attorney might choose a virtual lawyer for the sake of simplicity. A homebuyer, looking to keep costs manageable might hire a virtual lawyer for closing since their prices are both more transparent and affordable. A couple seeking to draft a cohabitation agreement may find similar benefits in an online lawyer.

The fact is that virtual legal services are not only here to stay – they are on the rise. Fortunately, the future is friendly; online law firms offer the same legal expertise as their physically housed counterparts, with the added benefits of being accessible and affordable.

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Tourmaline to expand in Montney with C$1.1 billion deal for Black Swan

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Canada‘s Tourmaline Oil Corp said on Friday it would buy privately owned Black Swan Energy Ltd in a C$1.1 billion ($908.79 million) deal, as the oil and gas producer looks to expand in the Montney region, one of North America’s top shale plays.

Canada‘s Montney, which straddles Alberta and British Columbia, has seen a wave of consolidation as companies buckled under collapsing oil prices amid the COVID-19 pandemic.

Tourmaline said the deal represents a key part of its ongoing North Montney consolidation strategy and the company sees the area as a key sub-basin for supplying Canadian liquefied natural gas.

The company in April acquired 50% of Saguaro Resources Ltd’s assets in the Laprise-Conroy North Montney play for $205 million and entered into a joint-venture agreement to develop these assets.

Analysts at brokerage ATB Capital Markets called the Black Swan assets a “hand in glove” fit with its recent acquisitions.

Tourmaline stock rose 4.5% to C$32.1.

The deal value consists of 26 million Tourmaline shares and a net debt of up to $350 million, including deal costs.

Tourmaline will acquire an expected average production capacity of over 50,000 boepd when the deal closes, likely in the second half of July.

The company, which also raised its dividend by 1 Canadian cent per share, expects the Black Swan assets to generate free cash flow of $150 million to $200 million in 2022 and beyond.

The Canadian energy sector has seen a flurry of deals with companies expecting to benefit from the rebound in oil prices as global fuel demand picks up.

ARC Resources Ltd in April bought Seven Generations Energy Ltd for C$2.7 billion to create Montney’s largest oil and gas producer.

($1 = 1.2104 Canadian dollars)

 

(Reporting by Rithika Krishna in Bengaluru; Editing by Vinay Dwivedi)

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