Global stocks staged a ferocious rebound from the war-induced rout, with European equities notching the biggest rally since the pandemic bottom in March 2020 and U.S. shares jumping the most intraday since November of that year. Oil sank more than 10% and Treasuries dropped.
Dip buyers powered the S&P 500 up almost 3% and Germany’s DAX Index to an eye-popping 7.9% surge on speculation that two weeks of selling amply reflected the global economic impact of escalating sanctions on Russia. Oil slid below $110 a barrel in New York and the 10-year Treasury yield climbed back above 1.9%.
Still, the rallies managed to claw back only some of the losses incurred since Russia invaded Ukraine. The DAX had plunged into a bear market earlier this week, while the S&P 500 is still sitting 10% below where it started the year. West Texas crude has added almost $20 a barrel in two weeks, and other commodities from nickel to wheat remain near historically high prices.
The risk-on rally is the latest wild ride for markets have been roiled by fears of a global inflation shock from a commodity-price rally fueled by Russia’s isolation, while supply disruptions threaten to usher in a period of slower global growth. Sentiment was lifted Wednesday after a top foreign policy aide to Ukrainian President Volodymyr Zelenskiy said the country is open to discussing Russia’s demand of neutrality as long as it’s given security guarantees.
“Risk markets are higher today, suggesting traders are no longer in flight mode and are starting to think about value again,” said Chris Low, chief economist at FHN Financial. “That doesn’t mean volatility is over. Economic consequences, macro and micro, are still in flux. The West is still working on sanctions for Russian energy, and the duration and outcome of the war is still a big unknown.”
The rally in U.S. stocks Wednesday comes on the 13th anniversary since the S&P 500 bottomed out following the financial crisis. The gauge has climbed more than 500% in this bull market, with an annual return of about 15%.
Russian forces intensified their bombardment of Ukraine’s capital Kyiv, the U.S. said. The Russian stock market’s trading halt is being extended in an effort to keep prices from tumbling in the wake of vast international sanctions.
Meanwhile, Coca-Cola Co. joined McDonald’s Corp., Starbucks Corp. and a host of other companies in suspending Russia operations in protest at the war. Fitch Ratings cut Russia’s credit rating and said a bond default is “imminent.”
Oil tumbled as the U.A.E. and Iraq signaled OPEC may have greater willingness to raise output. Crude has posted huge intraday swings in recent days as Russia’s invasion of Ukraine threatens a major global supply shock. Declines in crude and gas Wednesday are reversing some of the main trades seen since war broke out.
“What we’re seeing today is a lot of focus on commodity prices,” Michelle Cluver, associate portfolio strategist at Global X, said in a phone interview. “We are also seeing, especially with what’s happened with banning energy imports from Russia, the question about economic growth increasingly coming to the forefront.”
Commodity costs underline the inflation challenge and growth dilemma facing central banks. The European Central Bank meeting Thursday may reflect caution as the war on Ukraine has upended the continent’s economic outlook, while bets on a Federal Reserve rate hike have been scaled back over the past few weeks, with a quarter point now widely expected. Still, with U.S. inflation data due Thursday set to capture prewar prices, economists are now saying it could peak somewhere in the 8%-9% range this month or next.
Commodities broadly pulled back from highs, with gold dropping from a 19-month high on improved risk sentiment. Bullion is still up 9% this year as investors seek a hedge against the threat of an inflationary shock.
In cryptocurrencies, Bitcoin jumped above $42,000 amid a sharp rally in digital tokens, spurred by optimism about an impending U.S. overhaul of crypto oversight that Treasury Secretary Janet Yellen called “historic.”
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Here are some key events this week:
European Central Bank President Christine Lagarde briefing after policy meeting, Thursday
U.S. CPI, initial jobless claims, Thursday
Some of the main moves in markets:
Stocks
The S&P 500 rose 2.9% as of 3:25 p.m. New York time
The Nasdaq 100 rose 3.8%
The Dow Jones Industrial Average rose 2.3%
The MSCI World index rose 2.9%
Currencies
The Bloomberg Dollar Spot Index fell 1%
The euro rose 1.6% to $1.1074
The British pound rose 0.6% to $1.3185
The Japanese yen fell 0.1% to 115.81 per dollar
Bonds
The yield on 10-year Treasuries advanced eight basis points to 1.93%
Germany’s 10-year yield advanced 10 basis points to 0.22%
Britain’s 10-year yield advanced eight basis points to 1.53%
Commodities
West Texas Intermediate crude fell 11% to $109.65 a barrel
Gold futures fell 2.3% to $1,996.30 an ounce–With assistance from Akshay Chinchalkar, Sharon Cho, Andreea Papuc, Srinivasan Sivabalan and Peyton Forte.
HALIFAX – Chorus Aviation Inc. says its shareholders have voted to approve the sale of the company’s regional aircraft leasing business to HPS Investment Partners.
The Halifax-based company says the $1.9-billion deal was greenlighted by 98.1 per cent of votes cast by shareholders at a special meeting. The transaction needed approval by a two-thirds majority vote.
Chorus also says the waiting period mandated under U.S. legislation has expired and that it has received approval from Ireland’s Competition and Consumer Protection Commission.
Chorus announced the sale of its plane leasing business to New York City-based HPS in July for $814 million in cash and $1.1 billion in aircraft debt to be assumed or prepaid by the buyers at closing.
The deal marked a one-eighty for Chorus, which bet big on aircraft leasing just two years earlier by buying London-based plane-leasing outfit Falko Regional Aircraft Ltd.
Chorus, which also provides regional service for Air Canada via Chorus subsidiary Jazz Aviation, says the sale remains subject to the other regulatory approvals and customary conditions.
This report by The Canadian Press was first published Sept. 25, 2024.
TORONTO – AGF Management Ltd. says its net income attributable to equity owners totalled $20.3 million in its latest quarter, down from $23.0 million in the same quarter last year.
The investment manager says the profit amounted to 30 cents per diluted share for the quarter which ended on Aug. 31, down from 34 cents per diluted share a year earlier.
Total net revenue for the quarter amounted to $102.0 million, up from $84.0 million in the same quarter last year.
On an adjusted basis, AGF says it earned 37 cents per diluted share in its latest quarter, up from an adjusted profit of 34 cents per diluted share a year ago.
The company says its total assets under management and fee-earning assets totalled $49.7 billion at Aug. 31, up from $42.3 billion a year earlier.
Kevin McCreadie, AGF’s chief executive and chief investment officer, says the company was pleased to see early signs of improvement with positive retail net flows complementing its solid investment performance amid an uncertain economic backdrop and significant market volatility.
This report by The Canadian Press was first published Sept. 25, 2024.
As of January 2024, Canada is home to more than 3,600 recreational cannabis retail shops and this number is increasing annually with a single store to every 10,000 Canadians. The retail sector has been facing multiple challenges and one is surely overabundance of stores within smaller communities. Too many retailers compared to users of cannabis. The use of cannabis has remained relatively the same, while multiple retailers and online sales forces are competing for this marketplace.
Failures within the retail field are not a surprise, as Tokyo Smoke closes its multiple stores, and most shops’ profit margins remain small and diminishing over time. Mass closures may happen within certain provinces such as Ontario where situations of multiple retailers are situated right beside a competitor. Massive amounts of revenue have been collected by provincial governments while these stores remain open to every possible financial flux possible.
The black market remains healthy and profitable. An excuse to legalize pot was to challenge illegal pot sales and make it difficult to sell this pot outside of legal means. 22% of Canadian pot smokers get their supply from the black market. They say the pot tastes better and is slightly less costly. Legal pot management is costly and this cost is passed onto the customer. With gummy sales growing, the cost of management by legal means is difficult and costly too.
It seems the government may need to rethink its policy regarding cannabis and the possibility of legalizing further types of illicit drugs in the future. A total ack of imagination exists within the policy network where old-fashioned prejudice towards addiction and the use of narcotics is seen as criminal and threatening to society. All the while the number of traffic stops due to drivers under the influence of narcotics continues to grow, and the use of drugs by the youthful generation continues to be a problem. A solution to our society’s problems will never come from present-day authorities.
