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US stocks rebound along with oil price – Aljazeera.com

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United States stock indexes bounced back on Wednesday, driven by rising crude prices and another economic stimulus bill passed by the Senate. Better than expected quarterly earnings reports also lifted investor spirits.

The Dow Jones Industrial Average closed up 456.94 points or just shy of 2 percent to 23,475.82. The S&P 500 – a gauge of the health US retirement and education savings accounts – finished the session up 2.29 percent while the tech-heavy Nasdaq Composite Index closed 2.81 percent to the plus side.

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Wednesday’s move to the upside helped shake off the lingering effects of Monday, when a crude price wipeout saw West Texas Intermediate, the benchmark for US oil, crash into negative territory for the first time ever.  

But investors seemed to see a sliver of hope on Wednesday, after the US Senate on Tuesday approved a $484bn package to help keep US small businesses afloat, throw a financial lifeline to hospitals overrun by the coronavirus outbreak, as well as provide funds for a national testing impetus to help tamp down the pandemic.

The bill will be voted on in the House of Representatives on Thursday. US legislators have already passed trillions of dollars in coronavirus relief measures.

“Given that this bill provides nearly $500bn, Congress looks likely to exceed this expectation, as state fiscal aid alone could easily top another $200bn,” analysts at Goldman Sachs said in a note to clients. 

Overall expectation of another $1.5 trillion, including the legislation that the Senate passed on Tuesday, over the 2020-2022 period “still looks reasonable, we believe”, Goldman added. 

Shares of Netflix Inc lost more than 12 percent on the day. On Tuesday, the streaming giant reported that it had doubled its projections for new customers in the first quarter but forecast a weaker second half if the lockdown measures were to be lifted, 

Shares of Delta Air Lines Inc finished the session down 2.72 percent after it reported its first quarterly loss in five years. 

Crude prices moved higher, with the June contract for delivery of US benchmark West Texas Intermediate (WTI) oil gaining 22 percent to settle at $14.11 a barrel.

That helped drive energy shares higher with Exxon Mobil gaining 2.85 percent and Chevron Corp gaining 2.42 percent on the day. 

But some analysts are cautious about the outlook for the energy sector and US crude prices. 

Cushing, the major oil storing hub in Oklahoma, will rise by about 5.0 million barrels to 23.6 million barrels for the week ending April 17, pushing crude inventories to 76 percent capacity, according to Rystad Energy.

“Time to throw old perceptions of physical laws to the side and be prepared for more surprises in this broken oil market,” Rystad Energy’s Head of Oil Markets Bjornar Tonhaugen wrote in an email. “Prices can go to unprecedented low levels even for Brent as, unless there are further cuts announced.”

Rystad predicts that US crude output will hold steady above 12.0 million barrels per day (bdp) in the following weeks. Crude imports are also forecasted to remain at around 6.0 million bpd as an armada of Saudi cargoes is fast approaching US shores.

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Japan’s SoftBank returns to profit after gains at Vision Fund and other investments

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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.

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Yuri Kageyama is on X:

The Canadian Press. All rights reserved.

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Trump campaign promises unlikely to harm entrepreneurship: Shopify CFO

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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.

Companies in this story: (TSX:SHOP)

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RioCan cuts nearly 10 per cent staff in efficiency push as condo market slows

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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.

Companies in this story: (TSX:REI.UN)

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