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TSX surges record 12% as stimulus hopes gain momentum – BNNBloomberg.ca

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Canadian stocks soared the most in at least 43 years, joining a global rally on hopes government stimulus will soon flow to economies hammered by the coronavirus.

The S&P/TSX Composite Index rose 12 per cent on Tuesday, the biggest one-day percentage jump since at least 1977 when the index’s predecessor began. South of the border, stocks boomed with the Dow Jones Industrial average posting its best day since 1933 as a U.S. stimulus bill of about US$2 trillion inches forward.

Investors had been searching for buying opportunities amid the brutal sell-off but volatility has made it difficult to call a bottom on the stocks. The Canadian market is still down about 30 per cent from its February peak.

“We had cash going into this period, and I have been investing it as the market has been going down,” said Whitney George, chief investment officer of Sprott Asset Management. “I have been reinvesting the proceeds incrementally as the market keeps dropping.”

Gold’s spot price was up about 5 per cent and silver more than 6 per cent on Tuesday, giving a boost to mining stocks. The spending package by the U.S. government caused Goldman Sachs to predict an “inflection point” for gold and the bank is recommending its clients buy now.

Canada’s economic heartland is shutting down to fight the virus outbreak. Ontario and Quebec, which together account for about 57 per cent of the country’s economy, have ordered non-essential businesses to close by the end of today. Nearly one million Canadians applied for jobless claims last week, representing almost 5 per cent of the labor force, according to a senior government official with knowledge of the data.

Debate on Prime Minister Justin Trudeau’s CUS$82 billion (US$57 billion) stimulus package is stalled as parties negotiate the terms in a minority parliament.

Within the energy patch, record low prices for heavy Canadian crude have prompted one of the biggest operators in the oil sands to take the rare step of shutting production. Motivated by the “extremely low” prices, Suncor Energy Inc. announced on Tuesday that it will shut in one of its two so-called trains at its two-year-old, 194,000 barrel a day Fort Hills oil sands mine.

Bombardier Inc. said it will suspend all non-essential work at most Canadian-based operations tonight until April 26 to comply with government mandates to help slow the spread of Covid-19.

Sprott’s George is keeping a positive outlook for the market despite all the volatility. “Looking ahead, I am confident that markets and the economy will bounce back as they have had in the past,” he said.

Commodities

  • Western Canada Select crude oil traded at a US$15.00 discount to West Texas Intermediate
  • Spot gold rose about 4.7 per cent to US$1,626.15 an ounce

FX/Bonds

  • The Canadian dollar was little changed at CUS$1.4487 per U.S. dollar
  • The 10-year government bond yield rose about 8 basis points to 0.873 per cent

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'Grim reality' as equity markets close near session lows – BNNBloomberg.ca

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North American equity markets sank deeper into the red to end the first day of the second quarter, settling near session lows. Toronto’s benchmark S&P/TSX composite Index fell nearly four per cent, while the S&P 500, Dow Jones Industrial Average and Nasdaq Composite all dropped about four-and-a-half per cent amid concerns over the impact of the COVID-19 outbreak.

In Toronto, 10 of the 11 subgroups finished the session in negative territory, with safe-haven gold names helping the materials subgroup buck the trend. The healthcare, utilities and energy sectors on the TSX posted the biggest declines.

Lightspeed POS Inc., which provides point-of-sale software for retailers, cannabis producer Hexo Corp.  and BlackBerry Ltd. – which declined to provide a financial forecast for this fiscal year in the face of the virus outbreak – and were the lead laggards on the TSX.

Gold producers dominated the list of leaders, with Kinross Gold Corp., IAMGold Corp. and Pretium Resources Inc. posting the largest percentage gains.

Crude prices had a volatile day, with U.S. benchmark West Texas Intermediate seesawing between positive and negative territory amid global economic growth concerns, the end of the OPEC+ curtailment agreement, the oil price war between the Saudis and the Russians and the massive 13.8 million barrel inventory build the U.S. reported Wednesday. WTI kept close to US$20 per barrel, rising a little more than one per cent at 4 p.m. ET. Western Canadian Select rose modestly, but is still trading at about $5 per barrel.

The Canadian dollar had another down day against its U.S. counterpart, falling to the low 70-cent U.S. level.

12:40 p.m. ET: North American equities fade, near session lows

North American equity markets fell to near-session lows in the early afternoon after initially paring their losses. The S&P/TSX composite index, S&P 500, Dow Industrials and Nasdaq all fell more than three per cent in early afternoon trading as the COVID-19-induced pain of the first quarter extended into the second.

In Toronto, shares of BlackBerry Ltd. fell back into a double-digit sell-off, making the company one of the worst-performing stocks on Canada’s benchmark index Wednesday. South of the border, Carnival Corp. was the lead laggard on the S&P 500 after the company cancelled some cruises through the end of the year due to the virus outbreak.

U.S. benchmark oil West Texas Intermediate hovered around US$20 per barrel after the massive crude inventory buildup. The Canadian dollar slid against its U.S. counterpart to the low 70-cent U.S. range.

10:50 a.m. ET: North American equity markets pare losses in mid-morning

North American equity markets pared some of their early losses by mid-morning but remained firmly in negative territory amid concerns over the fallout of the COVID-19 virus. The S&P/TSX composite index, S&P 500, Dow Industrials and the Nasdaq were all down more than two per cent after falling more than three per cent at the opening bells.

In Toronto, 10 of the 11 subgroups were trading lower, with the materials group bucking the trend. Real estate, health care and utilities were the lead laggards.

BlackBerry Ltd. clawed back some ground with shares down about nine per cent after an initial 16 per cent plunge. Shares of Teck Resources Ltd. recovered entirely, entering positive territory. Shares of Dollarama Inc. remained modestly negative.

Oil prices dipped in the wake of a massive U.S. inventory buildup that exceeded even the highest estimate, with stockpiles rising 13.83 million barrels last week. Economists surveyed by Bloomberg had a median estimate of a 3.3 million barrel build. Though prices fell, benchmark West Texas Intermediate crude remains in the US$20 per barrel range.

9:33 a.m. ET Markets Open: ‘Grim reality’ as equity markets fall to start second quarter

Global equity markets kicked off the year’s second quarter in negative territory on Wednesday after a disastrous first quarter. The S&P/TSX composite index, S&P 500, Dow Industrials and Nasdaq indices all fell more than three per cent in early trading, following  a decline in European markets.  

Investors are weighing the ongoing impact of the COVID-19 as virus outbreak as cases in the United States continue to climb. U.S. President Donald Trump said Tuesday that Americans should brace for a “painful two weeks” as officials forecast hundreds of thousands of deaths in total due to the virus.

In Europe, a string of Purchasing Managers’ Indexes were deep in contraction territory. The U.K.’s big banks, including HSBC Holdings Plc and Barclays Plc, axed dividend payments and share buybacks, sending the European banks index lower.

Crude oil prices had a volatile morning amid those economic concerns, the expiration of the OPEC+ production curtailment agreement and the ongoing price war between Saudi Arabia and Russia. Saudi Arabia’s production surged to more than 12 million barrels per day, though Russia said it would not boost output.

In Toronto, it was another day of companies shelving their forecasts in the wake of the uncertainty caused by the virus.

Teck Resources Ltd. suspended its full-year guidance and announced it has put construction activity at its QB2 project in Chile on hold, with no certainty on the timeline to resume construction. Shares fell more than seven per cent at the open of trading on Wednesday.

Dollarama Inc. suspended its fiscal 2021 outlook, telling investors it’s “impossible to forecast the impact of the pandemic on the Canadian economy.” The discount retailer said sales slowed through the end of last month due to social distancing efforts after an initial surge in February and early March, sending the stock modestly lower.

BlackBerry Ltd. warned of a tough first quarter and declined to offer a full-year forecast in the face of the outbreak, with CEO John Chen telling investors it wasn’t prudent to offer a view in light of the uncertainty. BlackBerry was one of the worst performing stocks on the TSX in early trading, trading down 16 per cent.

A&W Revenue Royalties Income Fund announced it is suspending distributions to shareholders, and disclosed 200 of its restaurants are temporarily closed and that traffic is down significantly at those that remain open.

While the damage has been widespread through the first quarter of 2020, markets veteran David Rosenberg is warning the worst is yet to come. In a note to clients, Rosenberg, the chief economist and strategist at Rosenberg Research and Associates, said investors should brace for further downside.

“It is a brutal session today across most risk-assets —rather incredible when you think of the massive amounts of firepower unleashed by global monetary and fiscal policymakers,” he said. 

“A grim reality is that we are only now about to enter the eye of the storm and the 22 per cent plunge in global equities —the worst performance since 2008 —was actually just an appetizer despite all the proclamations from Wall Street pundits that the lows had been turned in.”

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Scott Stinson on COVID-19: If Canadian governments want better public buy-in, then give us better data – National Post

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Before the coronavirus shut down sports, I spent a lot of time most days looking at numbers.

And now, I spend a lot of time most days looking at numbers.

Instead of points per possession, or shot attempts, or expected goals, it’s COVID-19 cases, and percentage daily increases, and testing rates.

There are lessons from the analysis of sports statistics that can be applied to the much more important data that is now impacting how we live our everyday lives, bunkered away and either lonely or constantly bumping into family members.

But the biggest lesson, so far, is this: this data stinks. If a professional sports league was providing the kind of scattered, incomplete information that our governments are releasing on the coronavirus pandemic, we would ridicule them. And we have. (Hello, National Hockey League).

But when this data is meant to inform the public about the spread of an illness, and whether the measures we are taking have been effective, there is something more than ridicule that should be offered. We should be mad. We deserve better from our governments.

The single coronavirus statistic that is most cited these days is the number of cases in a particular place. Everywhere you turn, there are references to the steady global rise, or the sharp jumps in places like New York and Spain, and before that, China and Italy. In Canada there has also been a steep upward trajectory, which is distressing given all the talk about flattening the curve and the social-distancing measures that a significant number of citizens have undertaken.

Are Ontarians doing a bang-up job of containing this thing, or do we simply not have the proper data?

But that statistic, on its own, doesn’t say much. Rates of coronavirus testing vary wildly from province to province, which naturally affects the number of positive cases discovered. As of Wednesday morning, Ontario appeared to be having moderate success at restraining the spread of the virus, with just under 2,000 cases, for a rate of about 13 per 100,000 residents. That rate is lower than the rate in six other provinces. But again, as of Wednesday morning, Ontario had also run far fewer tests on a per-capita basis. Quebec had completed 16,000 more tests, even though Ontario has six million more residents. Alberta had completed 94 per cent as many tests as Ontario, despite having less than a third of its population.

So, are Ontarians doing a bang-up job of containing this thing, or do we simply not have the proper data? It’s like comparing the goals scored by two hockey teams, when one has played far more games. Further clouding the picture is that Quebec, with double the confirmed cases of Ontario, includes “presumed” cases as positive results. Thus, there’s no standard agreement on what constitutes a goal.

On cue, Ontario’s updated Wednesday numbers revealed a jump of more than 400 cases, the largest daily increase so far, but on a day when more than double the amount of tests were resolved than a day earlier. More tests, more positives. More games, more goals.

And while the numbers of confirmed cases are what lead all of the daily media briefings, experts have said for some time that it is hospitalized cases that are most concerning.


A traveller stands in the International arrivals hall at Toronto’s Pearson Airport, on Friday, March 27, 2020. Six planes carrying Canadians stranded in Africa and Europe are to touch down today in the government’s effort to repatriate travellers stranded by COVID-19.

Chris Young /

THE CANADIAN PRESS

It’s those numbers that demonstrate whether the health-care system is on pace to be overwhelmed, as has happened in places like Italy, which causes a commensurate jump in the death rate. In the sports context, hospitalization or intensive-care rates would be the advanced stats, the underlying numbers that give a more accurate picture of performance than the tops-of-the-waves stuff. But the information our governments provide on these details is scattershot and incomplete at best. It has to be chased down separately, although some provinces appear to be finally moving in the direction of providing it as part of their daily releases.

It is worth noting here that health care is a provincial responsibility, and so there are obstacles in the way to providing uniform, Canada-wide information. But isn’t a global pandemic the time for Ottawa to shake itself out of its normal way of doing business? The time for it to ensure that the coronavirus information released to the public is comprehensive and accurate? We shouldn’t have to be trying to infer what the numbers from Quebec and Ontario and Alberta mean. We should know, because someone in a position to know is telling us.

The information our governments provide on these details is scattershot and incomplete at best

It’s not even clear that federal officials should be trying to describe coronavirus spread in national terms. In recent days, the Canada-wide picture has been one of consistent daily jumps, but these are driven by big increases in Quebec and Ontario. The situation in British Columbia and the Prairies appears — for now, at least — to be one of significant progress in terms of limiting the spread of the disease, and a sign that the social-distancing measures are having the desired impact. You’d think that’s a message that Ottawa’s political and medical leaders would want to drive home, instead of simply reporting the steady national increases.

Of course, much about this pandemic has been changing rapidly, and I understand that people in high places have been forced to figure this stuff out on the move. But we are being told that our new reality of isolation and lockdown could carry on for weeks and months.

If our governments want the public to understand why all this is happening, it needs to provide the public with better information. And it needs to do that now.

Postmedia News

sstinson@postmedia.com

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Dow falls almost 1,000 points, TSX, 500 to close as investors brace for ‘very, very painful’ coronavirus shutdown – Financial Post

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The U.S. benchmark S&P 500 stock index fell more than 4 per cent on Wednesday after a dire warning on the U.S. death toll from the coronavirus sent investors running from even the most defensive equities.

The Dow Jones Industrial Average fell 973.65 points, or 4.44 per cent, to 20,943.51, the S&P 500 lost 114.09 points, or 4.41 per cent, to 2,470.5 and the Nasdaq Composite dropped 339.52 points, or 4.41 per cent, to 7,360.58.

The Toronto Stock Exchange’s S&P/TSX composite index closed down 3.8 per cent at 12,876.37, with shares of security software company BlackBerry Ltd falling nearly 18 per cent after dismal quarterly results.

Economic data showed U.S. manufacturing activity contracted less than expected in March, but disruptions caused by the coronavirus pandemic pushed new orders received by factories to an 11-year low, reinforcing economists’ views that the economy was in recession.

Also, business closures as authorities tried to contain the coronavirus pushed private payrolls down by 27,000 jobs last month, the first decline since September 2017, the ADP National Employment Report showed separately on Wednesday.

The blue-chip Dow Jones Industrial Average and benchmark S&P 500 indexes extended losses after suffering their worst first quarter as President Donald Trump warned Americans of a “painful” two weeks ahead and health officials highlighted research predictions of an enormous jump in virus-related deaths.

Roughly two weeks before the first-quarter earnings season is due to start in earnest, investors are “very sensitive to the latest headlines” about the virus due to a lack of fundamental information,” said John Augustine, chief investment officer at Huntington National Bank in Columbus, Ohio.

“We don’t know all the economic and earnings impact yet and this is a sober thought for Americans with those projections of the death rate,” said Augustine.

S&P 500 firms are expected to enter an earnings recession in 2020, falling 4.3 per cent in the first quarter and 10.9 per cent in the second, according to the latest estimates gathered by Refinitiv.

© Thomson Reuters 2020

© Thomson Reuters 2020

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