Canada’s main stock index opened down Monday, pressured by weakness in energy and materials stocks. On Wall Street, the Dow started in the red, hit by a decline in Boeing shares while the Nasdaq and S&P 500 edged higher.
At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 45.51 points, or 0.22 per cent, at 20,892.04. The index saw modest declines last week.
In the U.S., the Dow Jones Industrial Average fell 138.74 points, or 0.37 per cent, at the open to 37,327.37.
The S&P 500 opened higher by 6.46 points, or 0.14 per cent, at 4,703.70, while the Nasdaq Composite gained 40.39 points, or 0.28 per cent per cent, to 14,564.47 at the opening bell.
“This week attention shifts to the December CPI numbers which does have the potential to put the speculation about a March cut firmly back in its box,” Michael Hewson, chief market analyst with CMC Markets U.K., said.
“The sharp rebound in yields last week does suggest that markets are paring back pricing of a March cut with the U.S. dollar also rebounding, as stocks in the U.S. declined for the first time in 9 weeks.”
Markets have priced in about a 64-per-cent chance of the first Fed rate cut coming in March, down from about 80 per cent at the end of last year. The report is due Thursday.
Swissquote senior analyst Ipek Ozkardeskaya said markets are expecting December’s U.S. inflation report to show the annual rate slowly accelerated to 3.2 per cent from 3.1 per cent in November. Core inflation is seen easing to 3.8 per cent from 4 per cent.
“inflation figures in U.S. and Europe have come significantly down last year, but the easing could slow or reverse,” she said. “And that’s the biggest risk to the dovish Fed and European Central Bank (ECB), and Bank of England (BoE) expectations this year.”
Meanwhile, some of the biggest U.S. banks kick off earnings season on Friday with results due from Bank of America, JPMorgan Chase, Citigroup and Wells Fargo.
In Canada, investors will get earnings from retailer Aritzia on Wednesday. On Tuesday, international trade figures for November will be released by Statistics Canada.
On the corporate side, shares of Boeing were down more than 8 per cent in morning trading after the U.S. Federal Aviation Administration said 171 Boeing 737 MAX 9 airplanes would remain grounded after a cabin panel blowout that forced a new Alaska Airlines jet carrying passengers to make an emergency landing.
Overseas, the pan-European STOXX 600 was down 0.03 per cent by afternoon. Britain’s FTSE 100 slid 0.11 per cent. Germany’s DAX and France’s CAC 40 added 0.25 per cent and 0.05 per cent, respectively.
In Asia, markets in Japan were closed. Hong Kong’s Hang Seng finished down 1.88 per cent.
Commodities
Crude prices fell in early trading in the wake of price cuts from exporter Saudi Arabia.
The day range on Brent was US$77.58 to US$78.95 in the early premarket period. The range on West Texas Intermediate was US$72.61 to US$73.95.
“The Middle East conflict continues to rage on,” Stephen Innes, managing partner with SPI Asset Management, said.
“But for today so far, it appears that with no significant escalation over the weekend, oil prices are falling as hedges are getting pulled compounded as investors turn back to economic realities, where higher inventories and soaring U.S. and non-OPEC production collide with a significant drop in the U.S. ISM services employment index.”
Prices saw downward pressure from Saudi Arabia’s announcement on Sunday that it would cut the February official selling price of its flagship Arab Light crude to Asia to the lowest level in 27 months, Reuters reported.
In other commodities, spot gold was down 0.8 per cent at US$2,030.10 per ounce by early Monday morning. U.S. gold futures fell 0.6 per cent to US$2,037.70 per ounce.
Currencies
The Canadian dollar was weaker while its U.S. counterpart extended recent gains ahead of new inflation numbers later in the week.
The day range on the loonie was 74.65 US cents to 74.94 US cents in the predawn period.
On world markets, the U.S. dollar index, which weighs the greenback against a group of currencies, was up 0.06 per cent to 102.47.
The euro dipped 0.02 per cent to US$1.0938 while Britain’s pound fell 0.15 per cent to US$1.2699 by early Monday morning.
In bonds, the yield on the U.S. 10-year note was slightly lower at 4.029 per cent.
More company news
Lululemonraised its fourth-quarter sales and profit forecasts on Monday, in a sign that deeper discounts and deals spurred more customers to shop for the company’s products during the holiday season. The company now expects fourth-quarter revenue to be in the range of US$3.170-billion to US$3.190-billion, compared to previous forecast of US$3.135-billion to US$3.170-billion. -Reuters
Air Transat and the union representing its 2,100 flight attendants say they have reached a new tentative agreement. The proposed contract between the airline and the Canadian Union of Public Employees comes after the flight attendants rejected an earlier agreement reached in December. Details of the new tentative deal were not immediately available. –The Canadian Press
Economic news
Euro zone retail sales, economic and consumer confidence
Germany factory orders and trade surplus
(3 p.m. ET) U.S. consumer credit for November.
With Reuters and The Canadian Press
Editor’s note: The weekly performance for the S&P/TSX Composite Index has been corrected in this article.
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.
