BNN Bloomberg's closing bell update: April 6, 2020
4:45 p.m. ET: TSX rallies into bull-market territory
North American equity markets rallied into the close of Monday’s trade, with Canada’s S&P/TSX Composite Index notching a more than five per cent gain to help the benchmark index rise more than 20 per cent from the March 23rd low.
Risk assets like equities were lifted by some cautious optimism about the pace of growth in COVID-19 cases potentially slowing.
All 11 subgroups on the composite finished in positive territory, with consumer discretionary, utilities and health care leading the gains on a percentage basis. On a stock-specific level, 216 of the 230 constituents on the index closed the day higher, with Lightspeed POS Inc., MEG Energy Corp., and Alacer Gold Corp. posting the largest gains.
South of the border, the S&P 500, Dow Jones Industrial Average and Nasdaq Composite all rose more than seven per cent to post their largest gains since the March 24th rally.
Crude oil fell, with U.S. benchmark West Texas Intermediate off more than seven per cent over concerns related to the delay of the OPEC+ meeting to discuss production curtailments in the face of the recent supply and demand shocks. Alberta’s Western Canadian Select fell more than 25 per cent to close the day under US$9 per barrel, though Canadian crude is priced a handful of times per day.
12:40 p.m. ET: North American Markets extend rally, near session highs
North American equity markets are accelerating into midday, with the S&P/TSX Composite Index, S&P 500, Dow Jones Industrial Average and the Nasdaq Composite all trading near their intraday highs. Toronto’s benchmark index rose more than four per cent, with the three main indices south of the border all posting gains of more than five-and-a-half per cent.
In Toronto, all 11 subgroups were trading in positive territory, with consumer discretionary, health care, and utilities posting the largest percentage gains. On a stock-specific basis, Lightspeed POS Inc., ERO Copper Corp., and West Fraser Timber Co Ltd. were the lead gainers on the composite.
10:45 a.m. ET: Equity markets extend rally, all TSX subgroups push higher
North American equity markets remained in rally mode through mid-morning, with the S&P/TSX Composite Index, S&P 500, Dow Jones Industrial Average and the Nasdaq Composite continuing to push higher. Toronto’s benchmark index rose more than three-and-a-half per cent, while American indices all notched gains north of four-and-a-half per cent.
In Toronto, all 11 TSX subgroups were in positive territory, with consumer discretionary, health care and information technology posting the largest percentage gains. Nearly all of the members of the index were trading higher, with point-of-sale software provider Lightspeed POS Inc., Brookfield Property Partners Ltd., and Hexo Corp. notching the largest gains.
Oil prices remained under pressure in the wake of the delay of the OPEC+ meeting, with U.S. benchmark West Texas Intermediate falling nearly six per cent. Alberta’s Western Canadian Select crude, which is only priced a few times a day, remained below US$11 per barrel.
The Canadian dollar continued to hold at around 70.75 cents U.S., with currency traders greeting the backward-looking Bank of Canada Business Outlook survey with a shrug, given the deterioration in sentiment recorded largely predated the depths of the COVID-19 response.
9:35 a.m. ET: Global equity markets rebound on optimism of slowing virus growth
Global equity markets started the week on an upbeat tone amid cautious optimism about slowing growth of COVID-19 cases. The S&P/TSX composite index, S&P 500, Dow Jones Industrial Average and the Nasdaq Composite all rose more than three-and-a-half per cent in early trading, following European averages moving higher.
Crude oil pared earlier losses, with U.S. benchmark West Texas Intermediate prices down about five per cent after falling nearly 11 per cent overnight. Crude came under pressure after the OPEC+ cartel delayed a virtual meeting to discuss production curtailment to address the one-two hit of the demand shock triggered by the virus and the production shock from the Saudi-Russia price war. Western Canadian Select prices fell below $11 per barrel.
The Canadian dollar rose about 0.4 per cent against its U.S. counterpart, though the greenback was broadly weaker against its major peers as investors flocked to risk assets like stocks.
In Toronto, it was another busy morning for corporate news.
CT Real Estate Investment Trust said 2.8 per cent of its rent base didn’t meet their obligations to the REIT in April. The company said it will take a case-by-case approach with any tenants whose financial viability is in question due to the virus. CT REIT’s exposure to smaller tenants is limited, with Canadian Tire and its affiliated businesses accounting for 92.5 per cent of its rent base as of the end of 2019. Shares of the REIT rose three-and-half per cent at the opening bells.
CAE Inc. announced 2,600 temporary layoffs, or about a quarter of its workforce, in the face of the virus. The flight-simulator firm also suspended dividends and share buybacks to preserve cash, and said its CEO and executive team would take a 50 per cent pay cut while the pandemic plays out. Shares rose more than six per cent in early trading.
MTY Food Group Inc. said approximately 2,100 of its restaurants were closed due to the virus outbreak, with the remainder operating at reduced capacity. The company suspended its dividend and said about half of its global workforce has been temporarily laid off. Shares rose modestly higher in early trading, up about one-and-a-half per cent.
Chorus Aviation Inc. also suspended its dividend and dividend reinvestment plan (DRIP). The air operator said the dividend and DRIP suspensions would save the company $132 million on an annualized basis. The company’s president and CEO will take a 70 per cent pay reduction, and other executives will forego as much as 50 per cent of their salaries. Shares fell nine per cent in early trading.