New car sales drop 48% in March due to pandemic

Auto sales plunge 48%

DesRosiers Automotive Consultants Inc. says auto sales plunged 48 per cent in March from last year because of the Covid-19 pandemic.

The consultancy says March sales looked to be only declining moderately for the first half of the month, but started to dive as provinces declared states of emergency, Quebec closed front-end dealerships, and many other dealerships voluntarily shut down.

Sales are still possible online, but DesRosiers notes that hesitation and uncertainty around the economy and the outbreak have kept buyers away.

The consultancy says it expects even greater sales declines for April and May.

The plunge in March left first quarter auto sales down 20 per cent compared with last year to an estimated 329,108, with no reporting brand seeing increased sales.

Ford, which had the highest sales for the quarter, saw sales drop 13.8 per cent compared with last year, while General Motors declined 12.8 per cent and Fiat Chrysler Automobiles sales were down 18.8 per cent.


Asian stocks mixed as economic toll of virus worsens

Asian stocks mixed

Asian stocks were meandering Thursday after a White House warning that as many as 240,000 Americans might die of the coronavirus sent Wall Street tumbling and signs of the outbreak's global economic cost increased.

Benchmarks in Tokyo and Hong Kong opened lower but were trading higher by midday, and losses in early trading were smaller than Wall Street's 4.4% overnight fall. Shanghai opened down but gained 0.3% at mid-morning while Seoul advanced 1.9%.

U.S. futures were higher.

The U.S. warning added to anxiety among investors who are trying to figure out how long and deep this history-making global economic downturn might be.

“Fear, fear and more fear descended upon the market,” said Jingyi Pan of IG in a report.

Traders say markets will be turbulent until numbers of new cases decline, but Pan said that “still looks to be a distance away.”

The White House jolted financial markets with its announced Wednesday that anywhere from 100,000 to 240,000 Americans might die from the virus even if the country avoids shopping trips, eating in restaurants and other public activities through April.

Florida’s governor became the latest to issue a statewide stay-at-home order.

Tokyo's Nikkei 225 lost 0.3% to 18,007.46, adding to the previous session's 4.5% loss. The Hang Seng in Hong Kong climbed 0.2% to 23,135.25.

The Shanghai Composite Index gained to 2,743.64. The Kospi in Seoul rose to 1,716.60 while Sydney's S&P-ASX 200 declined 1.8% to 5,162.20.

Benchmarks in New Zealand and Southeast Asia also retreated.

On Wall Street, the benchmark S&P 500 index lost 114.09 points on Wednesday to 2,470.50.

The index is coming off its worst quarter since 2008 with a 20% loss.

The Dow Jones Industrial Average lost 4.4% to 20,943.51. The Nasdaq composite fell 4.4% to 7,360.58.

The market's hardest-hit areas included banks, utilities and other dividend payers.

Department store icon Macy's has lost 74% so far in 2020. So much of its stock value has vanished that it was removed from S&P 500 index of big U.S. companies, effective Monday. It is being moved to the small-stock index.

U.S. investors were rattled by mounting evidence of the virus's impact on major companies.

On Wednesday, Whiting Petroleum, one of the biggest shale oil drillers in North Dakota's Bakken formation, applied for court protection from its creditors under Chapter 11 of the bankruptcy code.

Automakers also reported sharp drops in March sales, including a 43% plunge for Hyundai.

Mortgage applications tumbled 24% from a year earlier after open houses are all but shut down.

A report on Wednesday said private U.S. employers cut 27,000 jobs last month, though that was milder than expected. The survey used data from March before the number of people seeking unemployment benefits exploded to a record.

Economists expect the next batch of U.S. jobless claims, due to be reported Thursday, to blow past last week's total of nearly 3.3 million initial claims. That was quintuple the prior record.

“The number of unemployed is set to surge and 1H growth will be heavily affected,” said Mizuho Bank in a report.

The number of infections is rising despite anti-disease controls that have shut down much of the global economy.

There are more than 911,000 confirmed cases worldwide, led by the United States with more than 206,000, according to a tally by Johns Hopkins University.

For most people, the coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia, and death.

The U.S. Congress last week agreed on a $2.2 trillion economic aid package and the Federal Reserve promised to buy as many Treasurys as needed to keep credit markets running smoothly.

Legislators are collecting ideas for a possible new round of aid. President Donald Trump tweeted his support for a $2 trillion infrastructure package. But top Republicans in Congress say they first want to see how well their newly approved programs do.

In energy markets, benchmark U.S. crude gained 96 cents to $21.28 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, rose $1.51 to $26.25 per barrel in London.

The dollar gained to 107.45 yen from Wednesday's 107.15 yen. The euro declined to $1.0936 from $1.0965.

Shopify suspends outlook for 2020

Shopify suspends outlook

Shopify Inc. says it is suspending its financial outlook for the year because of the uncertainty stemming from COVID-19.

The Ottawa-based e-commerce company says momentum in the first two months of the year will enable it to achieve first-quarter revenue and adjusted operating income that's within or ahead of expectations.

Shopify will report results for the period that ended March 31 on May 6.

The company says it has taken steps to support merchants and protect shareholders, including extended 90-day free trials to all new standard plan signups and local curbside pickup and delivery for merchants.

Early signs from its analysis of how the novel coronavirus is affecting merchants' operations indicates that brick-and-mortar businesses are pivoting to online with the dropoff in foot traffic.

Shopify says it terminated thousands of merchants charging unfair prices or making false claims about COVID-19-related items such as face masks or hand sanitizers.


Cineplex to keep its theatres doors closed for the foreseeable future

Cineplex closure indefinite

Canada's largest movie exhibitor will keep its doors closed nationwide into the foreseeable future amid the COVID-19 pandemic.

After initially setting an April 2 timeline to consider reopening 165 theatres across the chain, a representative for Cineplex Inc. told The Canadian Press the company will instead turn to government and public health authorities for any further guidance on when it's safe to reopen.

The decision comes as provinces enact their own mandatory closures of non-essential business under varying or uncertain timelines.

Cineplex represents about 75 per cent of the Canadian film exhibitor market across the country.

The company is also dealing with other factors out of its control, including a dearth of potential blockbusters from Hollywood studios into the late summer and a lingering takeover that's now in question.

Over the past few weeks, most major films have been pulled from the lucrative summer movie season. Among the changes, Sony bumped "Ghostbusters: Afterlife" to next March while Disney pulled Marvel blockbuster "Black Widow" from the schedule without setting a new release date.

That puts Cineplex in a tough spot in the midst of a $2.8-billion acquisition by Cineworld PLC, which is still subject to various conditions, including Investment Canada Act approval, that must be met by June 30.

Cineplex acknowledged in mid-March that certain conditions of the acquisition still haven't been reached, and that COVID-19 and government responses have made "business planning uncertain for the exhibition and location-based entertainment industries.''

One of the takeover conditions is that Cineplex keeps its debt below $725 million, a challenge that could prove difficult as it continues to pay rent, staff and various other operational expenses amid the closures.

"Cineplex will continue to take our lead from government and public health authorities, and we will reopen our theatres and entertainment venues across Canada when they tell us it is safe to do so," said Cineplex spokeswoman Sarah Van Lange in a statement.

Cineplex also operates entertainment complexes the Rec Room and Playdium which it closed on March 16 along with its theatres.

Delta company refocuses, 3-D prints medical face shields

BC firm 3-D prints shields

A Delta company is pulling out all the stops making face shields for health-care workers amid the COVID-19 pandemic.

Tinkerine, an ed-tech firm started by a group of SFU graduates seven years ago, has been manufacturing up to 1,000 per day using 3D printers, and is looking to bring on additional workers to help meet the demand.

Noting others including cities and fire departments are also interested in getting the shields, company co-founder Eugene said the shields are a special design.

“We call it full coverage with a seal on top. One of the most important aspects we heard from doctors and nurses is that droplets of Covid can enter from on top of the masks and we wanted to make sure that portion is sealed. As far as we know, we’re the only design out there that offers that with a reusable component to it. It’s a new way of looking at the equation what a face shield can do,” he said.

The company noted last week alone it received interest for over 4,500 face shields over a 24-hour period. Production for the orders has commenced and delivery is expected immediately, while additional orders are coming on an hourly basis.

The company has also secured raw materials required for the mass production.

To significantly increase the production, Tinkerine has also mobilized its Education Production Consortium in the hope of using more DittoPro and DittoPro-R 3D printers to manufacture the required medical product with the assistance of its education partners.

While post-secondary and high schools are closed, the company is hoping teachers and other education professionals with access to the printers can help, with assembly being done at the Tilbury facility.

Every printer can increase capacity between 50-to-100 shields per day, noted Suyu, saying there’s potentially 600 printers out there that can be utilized.

Suyu said the company, for now, has a nominal charge for the face shields but has applied for government funding in order to make them free.

Game shows see huge jump in viewers as people stay home

TV sees jump in viewers

Instead of watching their own finances crater, shut-in television viewers tuned in to the game show “Let's Make a Deal” in record numbers last week.

TV programs across the dial recorded superlatives last week with a captive audience of millions of Americans told to stay home because of the coronavirus. Few were as interesting as the newfound fervour for CBS' “Let's Make a Deal,” which recorded its most-watched week since the show was brought back 11 years ago with Wayne Brady as host, the Nielsen company said.

Cost-conscious viewers also gave “The Price is Right,” now hosted by Drew Carey, its biggest audience in four years, Nielsen said.

It was also a terrific week for television uber-producer Dick Wolf, whose Windy City-based trilogy of dramas dominates NBC's lineup. Excluding special crossover episodes, “Chicago Fire” recorded its most popular episode in six years, while “Chicago Med” and “Chicago PD” had their largest audiences in four years, Nielsen said.

The Wolf-produced dramas “FBI” and “FBI: Most Wanted” on CBS did have a crossover last week, leading both relatively new shows to their highest ratings ever.

Nielsen hasn't computed the numbers for last week yet, but during the previous week, television usage overall was up 18 per cent over the same week a year ago. It was up 43 per cent among viewers aged 12 to 17, which leads to questions about how much home schooling was being accomplished.

Increased usage was even more striking in Nielsen's measurements of streaming. During the week of March 16, Nielsen said that U.S. consumers streamed 156.1 billion minutes of content. That was more than double the 71.3 billion minutes streamed during the same week a year earlier, and up from the 116.4 billion minutes for the week of March 2 this year.

Twenty-nine per cent of the streaming two weeks ago was Netflix programming, and 20% was YouTube, Nielsen said.

CBS was the most popular network in prime time, averaging 6.3 million viewers and led by the best ratings for “NCIS” this year. NBC had 4.72 million viewers in prime time, ABC had 4.66 million, Fox had 3.4 million, Univision had 1.7 million, ION Television had 1.3 million, Telemundo had 1.2 million and the CW had 600,000 viewers.

News dominated the cable world again, with Fox News Channel averaging 4.23 million viewers in prime time. MSNBC had 2.32 million viewers, CNN had 2.19 million, HGTV had 1.26 million and TLC had 1.13 million.

ABC's “World News Tonight” led the evening newscasts with an average of 11.9 million viewers. NBC's “Nightly News” had 11 million viewers and the “CBS Evening News” had 7.4 million.

Global stock markets skid as coronavirus infections soar

Global stock markets skid

UPDATE: 7:23 a.m.

The financial and industrial sectors led a broad-based decline as Canada's main stock index plunged at the start of trading today, while U.S. stock markets also fell.

The S&P/TSX composite index was down 411.47 points at 12,967.28.

In New York, the Dow Jones industrial average was down 660.18 points at 21,256.98. The S&P 500 index was down 80.07 points at 2,504.52, while the Nasdaq composite was down 190.20 points at 7,509.90.

The Canadian dollar traded for 70.57 cents US compared with an average of 70.49 cents US on Tuesday.

The May crude contract was down six cents at US$20.42 per barrel and the May natural gas contract was down 1.8 cents at US$1.62 mmBTU.

The June gold contract was down US$5.80 at US$1,590.80 an ounce and the May copper contract was down 6.80 cents at US$2.16 a pound.

ORIGINAL: 5:45 a.m.

Global stock markets skidded Wednesday as reports of rising numbers of coronavirus cases deepened the gloom over the likely impact on the world economy.

France's CAC 40 fell 4.4% to 4,204, while Germany's DAX shed 3.9% to 9,546. Britain's FTSE 100 dropped 3.8% to 5,457 after major banks announced they were scrapping dividend payments, bringing their share prices sharply lower.

U.S. shares were set to drift lower with Dow and S&P 500 futures both dipping 3.4%. In Asia, Japan's benchmark Nikkei 225 dropped 4.5% to finish at 18,065.41.

With the number of infections still rising in most regions, “If anything, the worst is yet to come, and some of the world's largest emerging markets are still to feel the full onslaught of COVID-19,” said Jeffrey Halley, senior market analyst with Oanda.

President Donald Trump warned Americans to brace for a “hell of a bad two weeks” ahead as the White House projected there could be 100,000 to 240,000 deaths in the U.S.

The gloom was apparent in economic indicators around the world. The Bank of Japan's quarterly survey, or “tankan,” showed sentiment among Japan's large manufacturers fell in the January-March period, marking the fifth straight quarter of decline. The tankan measures corporate sentiment by subtracting the number of companies saying business conditions are negative from those responding they are positive.

The key index, which measures sentiment among large manufacturers, fell to minus 8 from zero in October-December, the worst result in seven years. Sentiment among non-manufacturers was also dismal as the service sector, tourism and other businesses have also been hit hard by the outbreak.

Australia's S&P/ASX 200 added 3.6% to 5,258.60, while South Korea's Kospi dipped 3.9% to 1,685.46. Hong Kong's Hang Seng lost 2.2% to 23,085.79, while the Shanghai Composite edged 0.6% lower to 2,734.52.

India's Sensex fell 4.7%. Shares also fell in Singapore, Malaysia, Indonesia and Thailand.

The surge of coronavirus cases around the world has sent markets to breathtaking drops since mid-February, undercutting what had been a good start to the year. The virus outbreak abruptly put the clamps on the economy. Benchmark U.S. crude oil dropped by roughly two thirds in January-March amid expectations for weaker demand.

On Wall Street overnight, stocks fell, closing out their worst quarter since late 2008, when the S&P 500 lost 22.6%.

Markets have cut their losses in recent weeks on hopes that massive aid from governments and central banks around the world can blunt the blow. The S&P 500 was down nearly 31% for the quarter at one point, but it has climbed 15.5% since last Monday.

Among the next milestones for investors is Friday's U.S. jobs report, which will likely show a sharp drop in payrolls. Companies soon will begin reporting their earnings results for the first quarter. Analysts are looking for the steepest drop in profits since early 2016, according to FactSet.

The number of known coronavirus cases keeps rising, and the worldwide tally has topped 860,000, according to Johns Hopkins University. The United States has the highest number in the world: more than 189,000 people.

Teck Resources slows coal, copper operations

Teck slows mine operations

Teck Resources Ltd. says it has temporarily slowed operations and reduced its crews by up to 50 per cent at its steelmaking coal and Highland Valley Copper operations in response to the COVID-19 pandemic.

The company, which also suspended its 2020 financial guidance, says the steps taken on March 25 will be in place for an initial period of two weeks and then be re-evaluated. It says all employees available for work will continue to be paid as normal during the initial two-week period.

Total production at its steelmaking coal and Highland Valley operations is expected to be reduced on average to about 80 to 85 per cent of normal levels during the initial two-week period.

Teck says it has also temporarily reduced the number of employees at its Trail, B.C., operations by one third while continuing to operate at planned production levels.

Production at its Red Dog mine in Alaska remains at planned levels, while its Antamina mine in Peru continues to operate at full production levels with less than half of the normal workforce.

The company says its Carmen de Andacollo operation in Chile remains at full production with a reduced workforce, while construction at its Quebrada Blanca Phase 2 project in Chile has been suspended.

Stanfield's reacts to COVID-19 with 'pivot' to medical gowns

Stanfield's to make gowns

A historic Canadian undergarment factory famed for long johns and boxer shorts is about to rapidly reinvent itself as a domestic producer of medical gowns.

Stanfield's Ltd. of Truro, N.S., is among five firms that Prime Minister Justin Trudeau announced Tuesday have received letters of intent to manufacture personal protective equipment and clothing for front-line health workers.

Jon Stanfield, the chief executive of the fifth-generation family firm, said in an interview he's already sourced approved fabric from nearby Intertape Polymer, and is ready to be producing medical clothing within days.

The 48-year-old says once the federal government provides details of its offer, the company could bring back over 75 of its over 200 staff who were sent home earlier this month as a result of the COVID-19 pandemic.

He describes the restart as a "pivotal" signal that Western governments are moving to ensure there are domestic suppliers of medical gear and gowns crucial to public safety in the future.

Stanfield said the firm has patterns and machinery that would initially produce more than 2,000 gowns daily per shift to help feed a Canadian demand for garments that emerged after the pandemic sliced supply from China.

The businessman — the grand nephew of the late federal Tory leader Robert Stanfield — said he's being driven by a sense of mission akin to the sudden demands created by wars and shifts in the Canadian economy.

In the 1890s, the company invented shrink-proof heavy woolen underwear used by workers during the Klondike gold rush; in the First World War, the factory was converted to provide wool blankets to keep soldiers warm in the trenches; and in Second World War, it supplied base layers of underclothing.

Innovation and survival is part of his firm's history, said Stanfield, adding, "my forefathers ... invented the long john."

Stanfield said he plans to provide some gowns through the company's overseas supply chain, but also intends to re-establish a Canadian domestic supply that free trade and offshore production have almost wiped out.

"Isolation gowns, reusable and disposable, are made in China, so to build a small resource base in Canada is important to dealing with crises like this in the future," he said.

"You can't have your supply chain be permitted to suddenly fall to zero like this."

Statistics Canada says growth in January slowed to 0.1 per cent

Growth slows to 0.1%

Economic growth slowed in January in a snapshot of the economy before the COVID-19 outbreak hit home.

Statistics Canada said Tuesday real gross domestic product grew 0.1 per cent in the first month of 2020 compared with an advance of 0.3 per cent in December.

The result for January matched the expectations of economists, according to financial markets data firm Refinitiv.

Statistics Canada said reduced trade with China and advisories against non-essential travel to the country affected potential growth in January.

Since then, the agency said, the pandemic and a collapse in oil prices has significantly affected the economy.

Benjamin Reitzes, director of Canadian rates and macro strategist at Bank of Montreal, called the January numbers "ancient history."

"While the year got off to a decent enough start, the near-total halt in activity in the second half of March will have a hugely negative impact," Reitzes wrote in a report.

"With the virus-mitigation measures almost certainly continuing through April, Q2 is going to get hit much, much harder."

In January, manufacturing rose 0.8 per cent as both durable and non-durable manufacturing increased. The finance and insurance sector increased 0.9 per cent.

The transportation and warehousing sector fell 1.7 per cent in January.

However, since then, steps taken to slow the spread of the novel coronavirus has brought non-essential businesses to a standstill, while oil prices have crash amid a price war between Saudi Arabia and Russia.

The result has been layoffs at businesses and more than one million Canadians applying for employment insurance benefits.

Ottawa has moved to shore up the economy by spending billions to help those affected and to ensure the health care system has the resources it needs to deal with the crisis.

The Bank of Canada has also reduced its key interest rate target to 0.25 per cent and stepped up measures to ensure financial markets continue to operate.

"March's GDP is likely to show a record decline — one that will stand until we get the April figures," said Josh Nye, a senior economist at Royal Bank of Canada.

"The government, like others around the world, has committed billions and billions to supporting the economy through this period of unprecedented disruption. Those efforts won't be enough to prevent a recession — even with a decent start to Q1, March is likely to pull the quarter into negative territory, and drop in Q2 activity looks like a sure thing."

RBC forecasts home sales to dive 30%, prices to decline

Home sales expected to dive

RBC says it expects Canada's housing market will see a significant pullback this year because of both the physical distancing restrictions and economic uncertainty caused by the coronavirus outbreak, but that it could rebound next year.

Bank analyst Robert Hogue says in a report that this year's home resales could dive by 30 per cent to a 20-year low as the market will "slow to a crawl" this spring, as confidence erodes and speculators sit on the sidelines.

He says he expects home prices to trend lower in the coming weeks or months, to make for a 2.9 per cent composite benchmark drop in the second half of the year compared to last, as tight-squeezed sellers make price concessions.

Hogue, however, expects the trends to reverse next year as low interest rates, a strengthening job market and a bounce-back in immigration help sales to surge more than 40 per cent in 2021 and price dynamics to also return to favouring sellers.

The report says oil-reliant Prairie economies will feel the housing pullback more acutely, with price declines "bound to re-accelerate significantly" and will little prospect of prices rebounding any time soon.

The report also notes that the bank's affordability measure, defined as the share of median income needed to cover home ownership, was steady at 50 per cent in Canada in the fourth quarter of 2019. Vancouver was highest at 80.4 per cent, Toronto at 68.2 per cent, while Edmonton was 31.6 per cent.

Imperial Oil cutting spending plans for 2020 by $1 billion

Imperial Oil cuts $1B

Imperial Oil Ltd. is reducing its spending for this year by $1 billion, including a $500-million cut to its capital spending plan as it deals with the COVID-19 pandemic and crash in oil prices.

The company says its capital budget for this year is now set at $1.1 billion to $1.2 billion, down from its original guidance for between $1.6 billion and $1.7 billion.

Imperial also says it has found opportunities to reduce operating spending by $500 million compared with last year.

It is the latest company in the oilpatch to slash its capital spending plan for this year as the price of oil has tanked due to the pandemic and a oil price war between Saudi Arabia and Russia.

The company says the impact of COVID-19 and the current business environment on demand is expected to hurt its upstream production and downstream refinery utilization as well as product sales.

Imperial says the steps it is taking are designed to preserve its strong balance sheet, while allowing it to maintain its dividend. However, the company says it is suspending share repurchases.

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