Skip to main content
//empty //empty
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

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.

Equities

Canada’s main stock index opened lower Thursday as crude prices fell after OPEC and its allies announced plans to begin tapering production cuts. In the U.S.,major indexes also started in the red with a disappointing reading on jobless claims offsetting better-than-expected retail sales figures.

Story continues below advertisement

At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 88.18 points, or 0.55 per cent at 15,975.15.

On Wall Street, the Dow Jones Industrial Average fell 123.53 points, or 0.46 per cent, at the open to 26,746.57. The S&P 500 opened lower by 18.20 points, or 0.56 per cent, at 3,208.36, while the Nasdaq Composite dropped 106.62 points, or 1.01 per cent, to 10,443.87 at the opening bell.

Ahead of the opening bell, the U.S. Labor Department said a total of 1.3 million Americans applied for initial state unemployment benefits last week, down slightly from 1.31 million the week before. Markets had been expecting a number closer to 1.25 million. Economists have also feared that the current spike in coronavirus infections in some regions of the United States could stall the economic recovery.

The weekly jobless claims figures offset a separate report that showed U.S. retail sales rose 7.5 per cent in June. Those numbers offered a positive look at the direction of the U.S. economy but also captured the period before the latest jump in infections.

“Even though we are only two weeks into a new month, today’s data may already be considered old news,” CIBC economist Andrew Grantham said. “The surge in COVID-19 cases in a number of states in the second half of June, leading to a re-tightening of restrictions in some areas and likely reduction in consumers’ desire to make discretionary purchases.”

Elsewhere, earnings were also a big factor in investor sentiment. On Thursday, Bank of American, Morgan Stanley and Johnson & Johnson all reported their latest results. After the bell, tech heavyweight Netfilx Inc. reports its latest quarterly results. Subscriber figures will be key for investors after Netflix saw a surge in new subscribers during the previous quarter.

“Netflix’s biggest problem now is how many of these subscribers stick around once the lockdown is lifted,” CMC Markets U.K. analyst Michael Hewson said.

Story continues below advertisement

“There are also concerns about their content pipeline, which is suspended due to the lockdown restrictions.”

He said the streaming giant is expected to report 7 million new subscribers in the second quarter, taking the global total to 190 million. Those numbers, he said, should also “act as a bellwether for the wider streaming market.”

In this country, Barrick Gold Corp said it expects gold production to fall 15 per cent in the second quarter, citing the impact of the COVID-19 pandemic on its Veladero mine in Argentina.

Overseas, the pan-European STOXX 600 was down 0.66 per cent in afternoon trading as the ECB held steady on monetary policy in its latest decision but signalled it was ready to act if necessary.

“The Governing Council continues to stand ready to adjust all of its instruments, as appropriate,” the ECB said in a statement, adding that it expects interest rates to remain at their current or lower levels.

Britain’s FTSE 100 was off 0.36 per cent. Germany’s DAX fell 0.57 per cent and France’s CAC 40 dropped 0.70 per cent.

Story continues below advertisement

In Asia, the Shanghai Composite Index sank more than 4 per cent despite fresh figures showing China’s GDP grew by a better-than-expected 3.2 per cent in the second quarter after contracting in the previous three-month period. However, retail sales figures for June fell 1.8 per cent. Economists had been forecasting a modest gain for the month.

Hong Kong’s Hang Seng fell 2 per cent. Japan’s Nikkei slid 0.76 per cent.

Commodities

Crude prices weakened after OPEC and its allies agreed to taper record production cuts starting next month.

The day range on Brent so far is US$43.34 to US$43.80. The range on West Texas Intermediate is US$40.60 to US$41.18.

Following a meeting this week, the OPEC+ group agreed to reduce production cuts to 7.7 million barrels a day through to December, from the record 9.7 million barrels curbs currently in place.

Story continues below advertisement

“Saudi Arabia’s oil minister pointed out that over-compliance by producers who failed to cut entirely in May/June will mitigate some of the actual production rewinds,” AxiCorp chief market strategist Stephen Innes said.

“It will be a disappointment to some that the 9.7 mb/d reduction has not been extended again,” Mr. Innes said. “Still, it is ultimately supportive for oil that the OPEC+ agreement seems to be working well, and even more important is that OPEC compliance is on the unified front.”

Mr. Innes also noted that the decline in June retail sales in China likely tempered buying activity in the crude market on Thursday.

In other commodities, gold prices slid as the U.S. dollar firmed although concerns over rising coronavirus infections underpinned bullion.

Spot gold was down 0.3 per cent to US$1,805.62 per ounce, just US$12 shy of its highest since September 2011 hit last week. U.S. gold futures fell 0.3 per cent to US$1,807.90.

Currencies

Story continues below advertisement

The Canadian dollar slid in early going as its U.S. counterpart firmed against global currencies and risk sentiment turned lower.

The day range on the loonie is 73.91 US cents to 74.06 US cents.

There were no major economic releases on the Canadian calendar on Thursday. On Wednesday, the Bank of Canada held interest rates steady and forecast that GDP would decline by 8.7 per cent this year. The central bank also pledged to keep interest rates low through the economic recovery.

“Governing Council is pledging to keep the overnight rate at its current level until the economy is back at full capacity and inflation is sustainably at the bank’s 2 per cent target,” Josh Nye, senior economist with RBC, said.

“Based on economic projections in the monetary policy report, that won’t be until 2023 or later.”

On global markets, the U.S. dollar gained as investors looked past gains in China’s first-quarter GDP and focused instead on a decline in June retail sales. The U.S. dollar index was last up 0.12 per cent at 96.20.

Story continues below advertisement

The euro was last trading down 0.1 per cent at US$1.1401, though against the safe-haven Japanese yen, the U.S. dollar was neutral at 106.95, according to Reuters.

More company news

Johnson & Johnson raised its full-year profit forecast and beat analysts’ estimates for quarterly earnings on Thursday as strength in its pharmaceuticals unit cushioned a steep fall in sales of its medical devices due to the COVID-19 pandemic. The company raised its full-year adjusted profit forecast to $7.75 to $7.95 per share, from its prior estimate of $7.50 to $7.90 per share. J&J reported net earnings of $3.63-billion, or $1.36 per share, in the second quarter, down from $5.61-billion, or $2.08 per share, a year earlier.

Excluding items, J&J earned $1.67 per share, beating the average analyst estimate of $1.49, according to Refinitiv estimate.

Bank of America Corp reported a drop of more than 50% in second-quarter profit as it set aside $4-billion for potential loan losses tied to the coronavirus pandemic. Net income applicable to common shareholders fell to $3.28-billion, or 37 cents per share, for the quarter ended June 30 from $7.11-billion, or 74 cents per share, a year earlier.

Morgan Stanley posted a 45% rise in quarterly profit, driven by strong trading gains as the coronavirus pandemic whipsawed global financial markets since March. The bank’s earnings attributable to common shareholders rose to $3.2-billion, or $1.96 per share, in the second quarter ended June 30, from $2.2-billion, or $1.23 per share, a year ago.

Multiple high-profile Twitter accounts were hijacked on Wednesday, with some of the platform’s top voices - including U.S. presidential candidate Joe Biden, reality TV star Kim Kardashian, former U.S. President Barack Obama and billionaire Elon Musk, among many others - used to solicit digital currency, Reuters reports. Hours after the first wave of hacks, the cause of the breach had not yet been made public. In a sign of the seriousness of the problem, Twitter took the extraordinary step of preventing at least some verified accounts from publishing messages altogether.

Nissan Motor Co is planning a 30% year-on-year cut in global vehicle production through December as falling demand due to the coronavirus complicates its efforts to recover profitability, two sources with knowledge of the matter have told Reuters. Japan’s No. 2 automaker plans to produce around 2.6 million vehicles between April and December, down from 3.7 million during the same period last year, the sources said.

Economic news

(8:30 a.m. ET) Canada's international securities transactions for May.

(8:30 a.m. ET) Canada's ADP National Employment Report for June.

(8:30 a.m. ET) U.S. initial jobless claims for week of July 11.

(8:30 a.m. ET) U.S. retail sales for June.

(8:30 a.m. ET) U.S. Philadelphia Fed Index for July.

(10 a.m. ET) U.S. NAHB Housing Index for July.

(10 a.m. ET) U.S. business inventories for May.

With Reuters and The Canadian Press

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 feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

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 letters@globeandmail.com. 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 letters@globeandmail.com. 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