Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.


Canada’s main stock index jumped at the open Wednesday after the Bank of Canada cut rates by half a percentage point citing the “negative shock” from the spread of the coronavirus. Wall Street’s big indexes also spiked at the start of trading after early results showed former U.S. Vice President Joe Biden was on track for a dramatic comeback in the Democratic primaries.

Story continues below advertisement

At 10:01 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 170.65 points, or 1.04 per cent, at 16,594.27.

The Dow Jones Industrial Average rose 466.27 points, or 1.80 per cent, at the open to 26,383.68. The S&P 500 opened higher by 42.38 points, or 1.41 per cent, at 3,045.75. The Nasdaq Composite gained 150.01 points, or 1.73 per cent, to 8,834.10.

Wall Street gathered steam in the premarket period as results from Super Tuesday showed Mr. Biden sweeping nine states including Texas. Futures had struggled in the overnight period amid lingering concern that the half-point surprise Fed rate cut signalled serious worries about the threat posed by the spread of the coronavirus. U.S. markets tanked on Tuesday in the wake of the move. Early Wednesday, Cleveland Federal Reserve President Loretta Mester said in an interview that the Fed’s half point cut wasn’t driven by last week’s market rout, although it was noted.

“Volatility is going nowhere but the stock market sell-off appears to have stabilized, at least for now, with healthy gains being seen for the second time this week,” OANDA senior analyst Craig Erlam said.

“World leaders have a fine balancing act on their hands. Put the public on high alert to the point that they take coronavirus risks very seriously but not scare people so much that the economic consequences become exacerbated and recession self-fulfilling,” he said.

On this side of the border, the Bank of Canada said it was cutting its key rate to 1.25 per cent from 1.75 per cent, citing the “material negative shock” from the COVID-19 virus.

“Before the outbreak, the global economy was showing signs of stabilizing,” the bank said in its statement. “However, COVID-19 represents a significant health threat to people in a growing number of countries. In consequence, business activity in some regions has fallen sharply and supply chains have been disrupted.”

Story continues below advertisement

On the corporate side, construction firm Aecon Group Inc. hiked its quarterly dividend by 10 per cent after Tuesday’s close. The company will pay 16 cents per share on April 2, up from 14.5 per cent previously. The move came as Aecon reported earnings in the most recent quarter of $20.2-million or 31 cents per diluted share, compared with $27.9-million or 41 cents per share a year earlier. Analysts had been looking for earnings in the latest quarter of 32 cents a share, according to financial markets data firm Refinitiv. Aecon shares were up more than 6 per cent at the start of trading in Toronto.

After the close, MEG Energy Corp. reports quarterly results.

On Wall Street, shares of retailer Nordstrom Inc. fell 6 per cent in early trading after the company forecast 2020 profit below market expectations. The forecast came after Nordstrom reported total revenue in its latest quarter of US$4.54-billion up from US$4.48-billion, but short of analysts’ estimates of US$4.56-billion.

Overseas, major European markets held their gains into the afternoon, with the pan-European STOXX 600 rising 1.49 per cent. Britain’s FTSE 100 gained 1.49 per cent. Germany’s DAX rose 1.26 per cent and France’s CAC gained 1.34 per cent.

In Asia, the Shanghai Composite Index finished 0.63 per cent higher. Hong Kong’s Hang Seng gave up early gains to finished down 0.24 per cent. In Japan, Tokyo’s Nikkei edged up 0.08 per cent.


Story continues below advertisement

Crude prices advanced as traders await an agreement from OPEC and its allies on production cuts aimed at shoring up the market as the spread of the coronavirus weighs on demand.

The day range on Brent is US$51.61 to US$52.89. The range on West Texas Intermediate is US$46.79 to US$48.16. At last check, both benchmarks were up by more than 1 per cent.

The gains come as OPEC and its allies prepare to gather for a two-day meeting to weigh output reductions aimed at bolstering prices. A technical committee met Tuesday and revised a previous recommendation for production cuts up to 1 million barrels a day.

“The problem facing the OPEC+ group is that the full impact of the COVID-19 is completely unquantifiable, and regardless of the depth of the cut, it won’t meet market expectations, especially with the market still very prone to sell off on secondary outbreak headlines,” AxiCorp strategist Stephen Innes said.

“But [with] the collapse in oil prices and evidence that the virus is still spreading, the clock is ticking, so I’m assuming the depth of the production cut will come in at the midpoint of the [joint technical commitee’s] recommendation.”

Wednesday’s gains were also underpinned by a smaller-than-expected increase in weekly U.S. crude inventories. The American Petroleum Institute said late Tuesday that U.S. crude stocks rose by 1.7 million barrels in the week to Feb. 28 to 446.6 million barrels, compared with analysts’ expectations for a build of 2.6 million barrels. More official figures are due later Wednesday morning from the U.S. Energy Information Administration

Story continues below advertisement

Gold prices, meanwhile, slid after spiking 3 per cent on Tuesday in the wake of the Fed rate cut.

Spot gold slipped 0.2 per cent to US$1,636.13 per ounce, after rising as much as 0.7 per cent earlier in the session and recording its biggest one-day percentage gain since 2016 on Tuesday. U.S. gold futures slipped 0.4 per cent to US$1,637.20 per ounce.

“In the very short term, gold has perhaps reached its upside limit as this rate cut is priced in,” CMC Markets analyst Margaret Yang Yan said.


The Canadian dollar fell after the Bank of Canada’s move to lower borrowing costs.

In the wake of the announcement, the loonie slid to the lower end of the day range of 74.54 US cents to 75.01 US cents. Markets had been expecting a rate cut but many had believed the central bank would opt for a smaller quarter point cut.

Story continues below advertisement

Shortly after the bank’s decision, markets were pricing in a 75-per-cent chance of another cut in April.

“The bank left the door swinging wide open to further cuts, if need be,” Bank of Montreal chief economist Douglas Porter said. “The reality is, it all depends on how the virus develops, and how consumers and, yes, financial markets then respond to that news. We suspect that given the heightened sensitivity to any bad news on that front, today’s move is unlikely to be the last cut.”

On global markets, the euro held near its highest level and the U.S. dollar regained some ground lost after the Fed’s rate cut on Tuesday.

The euro rose 0.1 per cent in early London trading to US$1.11760, but remained below Tuesday’s two-month high at US$1.12135.

The U.S. dollar, which fell to a five-month low at 106.85 yen in Asia on Wednesday, rebounded and was last up 0.2 per cent at 107.355 yen, according to Reuters. The U.S. dollar index, which weighs the greenback against a basket of currencies, was also higher.

Britain’s pound was last trading at US$1.2792, down 0.2 per cent for the day with prospects of a rate cut by the Bank of England and uncertainty over trade talks between Britain and the European Union weighing.

Story continues below advertisement

In bonds, the yield on the U.S. 10-year note was lower 0.961 per cent after hitting a record low of 0.906 per cent on Tuesday. The yield on the 30-year note was also lower at 1.58 per cent.

More company news

TransAlta Corp. reported a fourth-quarter profit of $66-million compared with a loss of $122-million in the fourth quarter of 2018. The company says the profit amounted to 24 cents per diluted share for the three months ended Dec. 31 compared with a loss of 43 cents per diluted share in the last three months of 2018. Revenue totalled $609-million, down from $622-million in the same quarter a year earlier.

General Electric Co said it expects a hit of US$300-million to US$500-million to its first-quarter cash flow from the coronavirus outbreak, while reaffirming its cash and profit targets for the full year. GE had previously set 2020 cash target of US$2-billion to US$4-billion, while estimating an adjusted profit of 50 US cents to 60 US cents per share. GE shares gained 1.7 per cent just after the opening bell in New York.

Campbell Soup Co raised its forecast for annual earnings, after it beat Wall Street estimates for quarterly sales, powered by improved demand at its soup business. The company said net sales fell marginally to US$2.16-billion in the second quarter ended Jan. 26, but beat analysts’ expectations of US$2.15-billion, according to IBES data from Refinitiv. The company also said it now expects fiscal 2020 adjusted earnings to be in the range of US$2.55 per share to US$2.60, up 5 US cents from an earlier forecast. Shares jumped 4 per cent on the news.

Dollar Tree Inc reported quarterly same-store sales that missed Wall Street estimates as it struggled to attract shoppers to its Family Dollar stores. Same-store sales rose 0.4 per cent in the fourth quarter ended Feb. 1, falling short of the analysts’ average estimate of 1.71 per cent, according to IBES data from Refinitiv.

Abercrombie & Fitch Co beat quarterly same-store sales estimates, boosted by strong demand for its flagship clothing brand in the holiday season. Sales at established stores rose 1 per cent in the fourth quarter ended Feb. 1, while analysts on average had expected a climb of 0.7 per cent, according to IBES data from Refinitiv.

Economic news

The ADP National Employment Report on Wednesday showed U.S. private payrolls rose by 183,000 jobs last month after climbing 209,000 in January. The January number was revised down from 291,000. Economists polled by Reuters had expected private payrolls to rise by 170,000 jobs in February.

(10 a.m. ET) Bank of Canada policy announcement.

(10 a.m. ET) U.S. non-manufacturing ISM for February.

(2 p.m. ET) U.S. Beige Book is released.

With Reuters and The Canadian Press

Coronavirus information
Coronavirus information
The Zero Canada Project provides resources to help you manage your health, your finances and your family life as Canada reopens.
Visit the hub
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies