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TSX down in every sector amid Canada election & Evergrande crisis

The substantial bankruptcy by Chinese property developer Evergrande triggered an economic slowdown on Monday September 20 across the globe which is…

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This article was originally published by Kalkine Media - Canada

The substantial bankruptcy by Chinese property developer Evergrande triggered an economic slowdown on Monday, September 20, across the globe, which is impacting the financial systems. Additionally, the upcoming Fed’s action for pumping stimulus into the economy seemingly created uncertainty among the investors.

All the 11 major sectors registered on the TSX composite were down including healthcare (5.01%), Energy (2.84%), Industrial (1.78%), Financial (1.75%) and Technology (1.51%). Thus, the TSX composite index continued in the red zone after losing 335.82 points or down by 1.63% settled at 20,154.54.

The one-year price chart (as on September 20, 2021). 

Active volume

TC Energy Corporation was the most actively traded stock where 17.80 million exchanged hands, followed by Canadian Natural Resources where 15.02 million exchanged hands, and Suncor Energy Inc. with 8.64 million shares exchanging hands.

Movers and laggards

Wall Street update

Concerns over the probable collapse of China’s real estate company Evergrande weighed heavily on US equities on Monday, with the main averages all suffering their biggest losses in many weeks.

Traders were also looking forward to the Federal Reserve’s monetary policy statement on Wednesday. The central bank is largely anticipated to maintain its current monetary policy, but it may discuss the future of its asset purchase program.

The Dow Jones Industrial Average finished the afternoon down 614.41 points or 1.78% at 33,970.47. The S&P 500 fell by 75.26 points or 1.7% to 4,357.73, while the Nasdaq was down by 330.06 points or 2.19% to 14,713.80.

Commodity update

Gold traded at US$ 1,763.80, up 0.54%.

Brent oil slipped down at US$ 73.92/bbl down 1.48%, while Crude oil also traded at US$ 70.29/bbl down by 1.72%.

Currency news

The Canadian Dollar slid against the U.S. Dollar on Monday, while USD/CAD closed at 1.2825, climbing 0.46%.

The U.S. Dollar index gained marginally against the basket of major currencies on September 20, and ended at 93.23, up 0.01%.

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Stocks That Miss Expectations Are Being Hammered By The Most On Record

Stocks That Miss Expectations Are Being Hammered By The Most On Record

It was just a quarter ago (and then again, the quarter before that)…

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Stocks That Miss Expectations Are Being Hammered By The Most On Record

It was just a quarter ago (and then again, the quarter before that) when we reported that in a market as priced to perfection as this one, where stock prices have massively outrun fair value based on corporate earnings (in some cases by years, but that’s where super generous earnings multiples come in), that investors have no patience for companies that miss, and the result was a furious hammering of all stocks that missed top or bottom-line expectations (and in many cases, companies that beat but did not beat by enough were also punished).

Well, fast forward to this quarter when the same phenomenon is at play: while earnings are expected to (still) come in hot, the market has a familiar warning to companies: miss and you will get punished.

While so far Q3 earnings has come is surprisingly strong – amid whispers that stagflation will hit margins – and 84% of reporting companies have posted earnings that topped expectations, just shy of the best showing ever, similar to last quarter the firms that surpassed profit forecasts got almost nothing to show for it in the market while misses got punished the most since Bloomberg started tracking the data in 2017.

As Bloomberg details looking at recent reports, Procter & Gamble beat on sales and earnings on Tuesday, only to have investors fixate on rising commodity and freight costs. Baker Hughes plunged 5.7% after reporting a third-quarter earnings stumble. And streaming giant Netflix Inc. fell 2.2% on Wednesday as traders looked past a profit and subscriber-growth beat.

On average, companies that beat on profit estimates outperformed the S&P 500 by less than 0.2%.

What about companies that did not beat? Here it was really ugly: shares of firms that missed profit forecasts underperformed the S&P 500 by 4.4% a day after the report, the worst post-earnings reaction since at least 2017, Bloomberg reported.

Combining with our previous observations on this striking phenomenon, this makes Q3 the fourth consecutive quarter in which earnings are not being rewarded and where beats are being severely punished by a market which has been priced to beyond perfection. And while U.S. companies overall have been able to deal with the pandemic-related headaches, analysts want to see whether they can continue to charge more for products without losing business should costs from labor to raw materials continue to go up.

“It is just going to take time to get all those container ships to port and to have enough trucks and truck drivers to take it the last mile to the store shelf or distribution facility,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management. “We hear corroborating evidence from corporate CEOs and, frankly, our own clients — that the current bottlenecks will persist into mid-2022.”

Tyler Durden
Thu, 10/21/2021 – 18:30

Author: Tyler Durden

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S&P 500 closes at all-time high as tech shines, inflation jitters fade

The S P 500 Index closed at an all-time high on Thursday October 21 helped by gains in technology stocks while Nasdaq concluded the session in the green…

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The S&P 500 Index closed at an all-time high on Thursday, October 21, helped by gains in technology stocks, while Nasdaq concluded the session in the green, Dow Jones slipped.

The S&P 500 was up 0.30% to 4,549.78. The Dow Jones fell 0.02% to 35,603.08. The NASDAQ Composite was up 0.62% to 15,215.70, and the small-cap Russell 2000 rose 0.28% to 2,296.18.

The unemployment benefits claims fell to a 19-month low last week, showing progress in the labor market. New claims fell by 6,000 to 290,000 in the week ended October 16, the lowest level since mid-March 2020, the Labor Department said on Thursday.

Economists expect more workers would be open to work in the coming months, with the expiration of government relief cheques on September 6.

Consumer discretionary, technology and real-estate stocks were the top gainers on the S&P 500 index on Thursday. Energy and basic materials stocks were the bottom movers. Six of the 11 stock segments of the index stayed in the positive territory.

Shares of Danaher Corporation (DHR) fell 1.23% in intraday trading after reporting third-quarter earnings results before the opening bell. Its total sales rose to US$7.22 billion in Q3 from US$5.88 billion a year ago. Its net earnings were US$1.15 billion compared to US$883 million in Q3, FY20.

The AT&T stock was down 0.68% despite better-than-expected third-quarter FY21 results. The company’s net income was US$6.27 billion on revenue of US$39.92 billion in the quarter. In addition, it added 1.2 million wireless customers, of which 928,000 were new phone subscribers.

Freeport-McMoRan Inc. (FCX) stock tumbled 1.27% after reporting its third-quarter earnings, beating analysts’ estimates. Its revenue surged around 57% YoY to US$6.08 billion in Q3, FY21, while its adjusted earnings came in at US$1.32 billion, or US$0.89 per share.

In the consumer discretionary sector, Home Depot, Inc. (HD) gained 1.72%, Nike, Inc. (NKE) rose 2.13%, and Lowe’s Companies, Inc. (LOW) rose 1.14%. Booking Holdings Inc. (BKNG) and Chipotle Mexican Grill, Inc. (CMG) ticked up 1.24% and 1.12%, respectively.

In technology stocks, NVIDIA Corporation (NVDA) increased by 2.35%, Intuit Inc. (INTU) gained 1.10%, and Advanced Micro Devices, Inc. (AMD) rose 2.47%. Autodesk, Inc. (ADSK) advanced 2.17%, while International Business Machines Corporation (IBM) fell 8.63%.

In the energy sector, Exxon Mobil Corporation (XOM) declined 1.81%, Chevron Corporation (CVX) fell 1.47%, and ConocoPhillips (COP) declined 1.68%. EOG Resources, Inc. (EOG) and Pioneer Natural Resources Company (PXD) fell 2.32% and 1.82%, respectively.

Also Read: Crocs Inc. (CROX) stock jumps on strong Q3 results, revenue guidance

Also Read: SAP SE (SAP) raises guidance, Union Pacific (UNP) posts higher profits

Six of the 11 stock segments of the S&P 500 index stayed in the positive territory.

Also Read: Southwest Airlines’ (LUV) Q3 revenue up YoY but down from 2019 levels

Futures & Commodities

Gold futures were down 0.07% to US$1,783.60 per ounce. Silver decreased by 0.89% to US$24.227 per ounce, while copper fell 3.73% to US$4.5580.

Brent oil futures decreased by 0.04% to US$84.78 per barrel and WTI crude was down 0.91% to US$82.66.

Bond Market

The 30-year Treasury bond yields was up 1.55% to 2.144, while the 10-year bond yields rose 3.72% to 1.696.

US Dollar Futures Index increased by 0.24% to US$93.755.

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5 Sinema Advisors Quit, Accuse Her Of ‘Selling Out’ To Big Donors, As Far-Left Backlash Intensifies

5 Sinema Advisors Quit, Accuse Her Of ‘Selling Out’ To Big Donors, As Far-Left Backlash Intensifies

While the New York Times attempts to augur…

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5 Sinema Advisors Quit, Accuse Her Of ‘Selling Out’ To Big Donors, As Far-Left Backlash Intensifies

While the New York Times attempts to augur Arizona Sen. Kyrsten Sinema’s demands as she and fellow moderate Dem Sen. Joe Manchin continue their battle with progressive House Dems that has left President Biden’s “Build Back Better” agenda – an infrastructure bill and accompanying expansion of the social safety net – the backlash against her “obstructionist” stance has just prompted five veterans who once served on her semi-formal “advisory council” to resign in protest.

In recent weeks, Sinema has been hounded by progressive activists who tried – but failed – to harangue her as she ran the Boston Marathon. Now, that pressure is likely about to be turned up to ’11’ as the former advisors accused her of “hanging your own constituents out to dry” in a letter that was just leaked to the New York Times.

As President Biden struggles to quell the partisan battle over his agenda and sell it to the American people (as warnings about the potential for stoking further inflationary pressures multiply), progressives are getting increasingly desperate, and ramping up their attacks on Dem moderates who are in the middle of a pitched battle with progressives.

According to the NYT, which “obtained” (ie was given) a copy of the letter, the former Sinema aides accuse her of placing the needs of wealthy donors ahead of the needs of her constituents.

In a scathing letter obtained by The New York Times, the veterans took Ms. Sinema to task for her refusal to abolish the filibuster and her opposition to parts of Mr. Biden’s multitrillion-dollar social safety net, education, climate and tax plan, stances that have stymied some of his top priorities.

“You have become one of the principal obstacles to progress, answering to big donors rather than your own people,” the veterans wrote in a letter that is to be featured in a new advertisement by Common Defense, a progressive veterans’ activist group that has targeted Ms. Sinema.

“We shouldn’t have to buy representation from you, and your failure to stand by your people and see their urgent needs is alarming,” they added.

Moreover, the NYT said the letter is the latest in a “crescendo of anger” directed at Sinema over her ‘perplexing’ tactics during the hectic negotiations, which have most recently centered on the tax hikes Dems’ have promised to help offset the cost of both Biden’s “bipartisan” infrastructure plan as well as his plan to expand the social safety net. Sinema is a key swing vote in this battle.

But it’s not just Sinema’s stance on the tax hikes that’s got the far-left so hot and bothered. There’s a groundswell of anger over her opposition to scrapping the filibuster, which progressive Dems want to eliminate to help push through a version of the Biden agenda that they effectively dictate.

The resignations add to a crescendo of anger and pressure that Ms. Sinema is facing from erstwhile allies who say they are perplexed by her recent tactics. She has resisted major elements of Democrats’ sprawling social safety net and climate bill, including raising individual income and corporate tax rates to pay for it. Because Democrats control the Senate with only 50 votes, even one defection could spell defeat for the measure, giving Ms. Sinema outsize influence to determine what can be included.

Ms. Sinema has also steadfastly opposed changing the Senate’s filibuster rule, which effectively requires 60 votes to move forward on any major bill, even as Republicans have used it as a procedural weapon to block voting rights legislation and a bill to avert a federal debt default.

Progressive activists have stepped up their campaign to push Democrats to do away with the rule so they can muscle Mr. Biden’s priorities through Congress on simple majority votes, and they have trained their anger on Ms. Sinema and another centrist holdout, Senator Joe Manchin III of West Virginia.

One progressive activist quoted by the NYT said that Dems worked “so hard” to get Sinema elected, and now they feel betrayed.

“Democrats were out desperately trying to help her win the seat, and now we feel like, what was it for?” Sylvia González Andersh, one of the veterans who signed the letter, said in an interview. “Nobody knows what she is thinking because she doesn’t tell anybody anything. It’s very sad to think that someone who you worked for that hard to get elected is not even willing to listen.”

Well, there is one person who knows – Nancy Pelosi. But apparently she won’t tell.

As time goes on, pressure on Sinema is only going to get worse. How much longer until she gets “Tucker Carlson’d” – or worse – by Antifa?

Tyler Durden
Thu, 10/21/2021 – 17:10

Author: Tyler Durden

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