BEIJING —
Global stock markets and U.S. futures rebounded Monday from losses last week after the head of the U.S. Federal Reserve expressed optimism that the American economy might start to recover this year from the coronavirus pandemic.
London and Frankfurt pushed higher, while benchmarks in Shanghai, Tokyo, Hong Kong and Australia advanced.
That came despite Japan’s announcement that its economy contracted in the first quarter and the Trump administration’s decision to step up a technology conflict with Beijing by tightening restrictions on Chinese tech giant Huawei.
Investors appear to be looking past the outbreak to a recovery despite rising infection numbers in the United States, Brazil and some other countries. Forecasters warn the latest market buoyancy might be premature and a return to normal could be some way off.
Market sentiment “will likely remain fragile” as investors weigh government stimulus plans against rising U.S.-Chinese tension and poor economic data, said Riki Ogawa of Mizuho Bank in a report.
In Europe, the FTSE 100 in London gained 2.4% to 5,936 and the DAX in Frankfurt advanced 2.9% to 10,766. France’s CAC 40 rose 2.2% to 4,373.
On Wall Street, futures for the S&P 500 index and the Dow industrials were up 1.6% and 1.7%, respectively. On Friday, U.S. stocks turned in their biggest weekly loss in nearly two months.
In Asia, the Shanghai Composite Index rose 0.2% to 2,875.42 and Tokyo’s Nikkei 225 gained 0.5% to 20,133.73. The Hang Seng in Hong Kong advanced 0.6% to 23,934.77.
The Kospi in Seoul was 0.5% higher at 1,937.11 and Australia’s S&P-ASX 200 gained 1% to 5,460.50. India’s Sensex lost 2.6% to 30,310.56. Markets in New Zealand and Southeast Asia advanced.
Federal Reserve Chair Jerome Powell expressed optimism Sunday the U.S. economy can begin to rebound in the second half, assuming the coronavirus doesn’t erupt in a second wave. He said a full recovery won’t likely be possible before the arrival of a vaccine.
That appeared to encourage investors who are looking for signs of when global economies might return to normal.
In an interview with CBS’s “60 Minutes,” Powell said the U.S. economy was fundamentally healthy before the virus forced widespread business shutdowns and tens of millions of layoffs. Once the outbreak has been contained, he said, the economy should be able to rebound “substantially.”
The U.S. downturn was the result of an external event instead of problems such as the financial instabilities that led to the 2008 crisis, which may mean “we can get back to a healthy economy fairly quickly,” Powell said.
Powell and Treasury Secretary Steven Mnuchin are due to appear Thursday before a Senate panel to report on recovery efforts.
“Expect policymakers to strike a more cautious tone, emphasizing that we are not out of the woods yet and that there will be more stimulus in the offing,” Stephen Innes of AxiCorp said in a report.
Meanwhile, Japan’s government reported Monday the world’s third-largest economy contracted by 0.9% in the three months ending in March compared with the previous quarter.
That “sharp fall” suggests there is “much worse to come” in the current quarter, Tom Learmouth of Capital Economics said in a report.
The White House added to trade uncertainty by tightening restrictions on Huawei Technologies Ltd. American officials say Huawei, one of the biggest makers of smartphones and network equipment, is a security risk, which the company denies.
Washington said non-U.S. companies that make processor chips for Huawei must obtain permission to use American technology, a move that threatens to disrupt sales. Huawei warned earlier that additional U.S. sanctions on the company might trigger Chinese government retaliation against American enterprises.
In energy markets, benchmark U.S. crude gained $2.78 to $32.21 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.87 to $29.43 on Friday. Brent crude, used to price international oils, advanced $2.08 to $34.58 per barrel in London. It rose $1.37 the previous session to $32.50.
The dollar gained to 107.24 yen from Friday’s 107.08 yen. The euro declined to $1.0816 from $1.0828.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
