• Posthaste: While the S&P500 keeps hitting new highs, these Canadian blue chips are weighing down the TSX index

    Source: Financial Post - Top Stories / 26 Aug 2020 08:31:15   America/New_York

    Good morning! The S&P 500 and Nasdaq indices have been hitting a series of record highs recently, but the TSX index continues to languish more than 1,300 points lower than its all-time high reached earlier this year just before the pandemic sent the bulls stampeding out of the market. The domestic market index stands at just over 16,617 points this year, still shy of the 17,944 all-time record seen in February. The main TSX index is now nearly 3 per cent shy of erasing its losses for the year, after falling 34 per cent by the late March. In contrast, the S&P 500 is now up 11 per cent for the year, after falling 27.67 per cent for the year by late March, according to data gleaned from Yahoo Finance. While the S&P/TSX Composite Index has grown 6.33 per cent in the current quarter, it has been an uneven recovery for the most part this year, with Shopify Inc. (up 157 per cent) and Barrick Gold Corp. (+57 per cent) doing the heavy lifting and adding about 800 points to the index, according to Bank of Montreal research. The performance of the various sectors mirrors the real-life performance of these industries: The S&P Capped Information Technology Index has expanded more than 42 per cent year-to-date, with the S&P TSX Capped Energy index at other end of the spectrum, down almost exactly more than 42 per cent. The S&P/TSX Capped Materials Index surged around 22 per cent year-to-date, with S&P/TSX Global Gold Index up nearly 38 per cent. But there are plenty of laggards: The S&P/TSX Capped REIT Index is down 21 per cent, S&P/TSX Capped Health Care Index has fallen 32 per cent, S&P/TSX Capped Real Estate Index is 19 per cent in the red, and the S&P/TSX Capped Financial Index is 13 per cent lower. In reality, a number of TSX blue-chips are weighing down the index. These include Bombardier Inc. (-76 per cent), Cineplex Inc. (-73 per cent), Air Canada (-66 per cent), Suncor Energy Inc. (-48 per cent), RioCan Real Estate Investment Trust (-39 per cent), Teck Resources Ltd. (-35 per cent), Gildan Activewear Inc. (-30 per cent), Blackberry Inc. (-24 per cent), Canopy Growth Corp. (-21 per cent), Manulife Financial Corp. (-21 per cent), The Bank of Nova Scotia (-20 per cent), Nutrien Ltd. (-17 per cent), Enbridge Inc. (-13 per cent), Rogers Corp. (-12 per cent), BMO research shows. To be clear, the S&P 500’s new record also masks weaknesses in the stock performance of a number of major American household names. “It’s well-known that the comeback has been narrowly based, led especially by just a few high-flying tech stocks. But, just as an illustration of the extent to which much of the rest of the market is lagging, consider these… household names below which are all still down by at least double-digits so far this year. Note the diversity of names,” Douglas Porter, chief economist at BMO, wrote in a note this week. Some of the biggest American brands deep in negative territory include American Airlines (down 58 per cent), Boeing (-49 per cent), General Electric (-44 per cent), Exxon Mobil Corp. (-41 per cent) and Bank of America (-29 per cent). _____________________________________________ Was this newsletter forwarded to you? Sign up here to get it delivered to your inbox. _____________________________________________________________ STORM’S COMING: This NOAA satellite shows Hurricane Laura moving Northwestern in the Gulf of Mexico towards Louisiana at 13:00 UTC on August 25, 2020. – Storm Laura was upgraded to a hurricane on August 25, 2020 and is forecast to make landfall along the Texas or Louisiana coasts on Wednesday night, US meteorologists said.”Laura has become a hurricane with maximum sustained winds of 75 mph (120 km/h), with higher gusts,” the US National Hurricane Center said. “Significant strengthening is forecast during the next 48 hours, and Laura is expected to be a major hurricane at landfall,” it added. Handout _______________________________________________________ The Parliamentary Budget Officer (PBO) will post a new PBO legislative costing note entitled COVID-19: Special payment to individuals receiving disability supports on the website at www.pbo-dpb.gc.ca at 9 a.m. ET Bank of Canada senior deputy governor Carolyn Wilkins to give opening remarks at the central bank’s workshop on the renewal of its monetary policy framework at 10 a.m. ET Salma Lakhani to be installed as the 19th lieutenant-governor of Alberta Activists and labour organizers protesting Peter Nygard, fashion mogul accused of sexual assault at 4 p.m. at 1300 Notre Dame Ave, Winnipeg Federal Reserve Bank of Richmond President Thomas Barkin speaks before a virtual meeting of the Morgantown Area Partnership, Morgantown, West Virginia Notable Earnings: Royal Bank of Canada, Aimia Inc., National Bank of Canada ___________________________________________________ _______________________________________________________ Royal Bank of Canada profit beats expectations on record capital markets earnings Podcast: What Chrystia Freeland brings to the table as Canada’s finance minister — from a former insider Justin Trudeau plots Canada’s sharpest turn left in economic policy in decades Pandemic worsening belief that official inflation measures don’t reflect rising costs: Bank of Canada Crude consumption rebounds from April lows despite concerns about peak oil demand Canada’s Boeing 737 Max flight is a test of the global regulatory regime Businesses were desperate for a rent-relief program. Governments rushed to deliver them one. What went wrong? Scotiabank’s foreign loan losses surge as BMO beats expectations What’s at stake in the battle over gig workers ‘Airplanes are cleaner than they’ve ever been’: Airlines double staff to deep clean planes between flights Merger of investment and mutual fund dealer regulators could save $490 million: report Feds to give provinces $2B to bolster safe reopening of schools this fall ____________________________________________________ Apple Inc. made Wall Street history last week when its 2020 stock surge pushed the market value over $2 trillion, the first time a U.S. company has surpassed that level. While it took Apple 38 years to reach its first US$1 trillion in value, the next trillion only took two years after the company rapidly expanded its hardware ecosystem with more iPhones and new Apple Watches and AirPods, launched digital services and leveraged its base of 1.5 billion devices to generate more recurring revenue, according to a Bloomberg report. “The gains have solidified Apple’s position as the most valuable company in the world. While Saudi Aramco briefly boasted a US$2 trillion valuation in December, shares of Saudi Arabia’s national oil company subsequently dropped, and it currently trades with a market cap of about US$1.8 trillion. Among U.S. companies, Apple is trailed by Amazon.com Inc. and Microsoft Corp., both of which have market caps under US$1.7 trillion,” Bloomberg said. Earlier this month, Apple announced it would do a 4:1 split of its stock — the news has propelled the company’ stock by close to a US$100, pushing it past the $2 trillion mark. ____________________________________________________ With the coronavirus keeping people indoors and putting them out of work, some Canadians have been patiently waiting for prices to tumble before buying a home. As it turns out, it may take more than a pandemic to keep the Canadian housing market down, writes our content partners at MoneyWise. ____________________________________________________ Today’s Posthaste was written by Yadullah Hussain (@Yad_Fpenergy), with files from The Canadian Press, Thomson Reuters and Bloomberg. Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? 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