The COVID-19 pandemic is having a major impact on business, markets and the economy. For continuous updates, follow along with The Financial Post’s James McLeod @jamespmcleod as he live blogs here. Send tips, announcements and information to firstname.lastname@example.org.
1:05 p.m. — Economic woes could hurt CAD more: Deutsche Bank strategist Michael Hsueh published new research today indicating it could get worse.
At worst, Hsueh said that the dollar could be trading at 66 cents by the end of the year.
“We believe the Canadian dollar does not yet fully price in a protracted oil shock. Circumstances are lining up for a more substantial weakening in CAD. We expect an oil shock which is both deep and persistent enough to result in a major oil industry downturn. We have written elsewhere that we see risks of oil falling below the previous cycle lows into the USD 20’s/bbl, and for more sustained periods than in 2015-16.”
Scroll down a little bit farther in this liveblog for a graph of the CAD price; it’s stark.
12:55 p.m. — TSX rebounding: After a drop of nearly 10 per cent on Monday, the TSX is rebounding today, with the market up by more than 4 per cent midday. Other major North American indexes, including the S&P 500, Nasdaq and Dow Jones Industrial Average are also in positive territory.
11:59 a.m. — Bank of Canada rate cut coming: Here’s an interesting little Twitter thread from FP columnist Kevin Carmichael on the Bank of Canada’s deliberations, and what to expect on macroeconomic policy in response to COVID-19.
From Kevin: Bottom line on the BoC: we’re going to 0.25% by April, if not sooner. A global recession obviously is a big deal, but oil prices are front and centre. Statement is a nice bit of transparency.
11:47 a.m. — Trudeau says more economic measures coming soon: Speaking to journalists in Ottawa, Prime Minister Justin Trudeau said he expects that the federal government will have more to announce on Wednesday about economic measures in response to COVID-19.
Trudeau also said that tax changes are coming: “By the end of the week we will have more to say about changes for the upcoming tax season.”
He also said that Ottawa is looking at recalling the House of Commons for a short session to pass legislation to modify the Employment Insurance program, and other federal services to aid the economy.
11:18 a.m. — Goldman, Morgan Stanley, declare global recession: Figuring out what’s happening in the economy is tough, as the COVID-19 situation is unfolding so quickly.
But two of the world’s most recognizable financial institutions declared that we’re in recession. You can read the full story posted here.
11:05 a.m. — Amazon shifting service: Bloomberg is reporting that Amazon.com Inc. is prioritizing essential goods and medical supplies in response to COVID-19.
Bloomberg reports: “On Tuesday, Amazon told third-party sellers on its marketplace that the company wouldn’t accept shipments from sellers in other product categories through at least April 5. Amazon said it was taking a similar approach with the big brands it buys directly from. Business Insider reported the restrictions on other product categories earlier.”
More information about what the e-commerce giant is doing in response to the pandemic can be found in this blog post.
10:43 a.m. — Big six banks scaling back branch operations: The six largest banks in Canada will limit their hours and take other steps to encourage social distancing in response to the COVID-19 pandemic. That would include RBC, TD, Scotiabank, CIBC, BMO and National Bank.
The news came from the Canadian Bankers Association, shortly after CIBC announced measures to curtail branch activities.
10:30 a.m. — U.S. Treasury to seek US$850b stimulus: Bloomberg is reporting that U.S. Treasury Secretary Steven Mnuchin is expected to seek a third stimulus package of US$850 billion, in response to the COVID-19 crisis. According to the report, the package would include a payroll tax cut and an airline bailout.
10:20 a.m. — ZipRecruiter job postings crater: In an early indication of how COVID-19 is impacting the economy, hiring service ZipRecruiter shared some data Tuesday which indicates that job postings are way down.
For the first two weeks of 2019, catering job postings are down by a staggering 67.9 per cent year-over-year, and restaurant jobs are down 42 per cent. According to the ZipRecruiter data, food service is the hardest hit, but other sectors are down too.
On the other hand, the company reports that cleaning job postings are up by 13.9 per cent, and nursing job postings have increased by 2.9 per cent.
10:15 a.m. — Posthaste roundup: In case you missed it, Financial Post editor Yadullah Hussain has a good roundup of the business landscape this morning with his regular Posthaste feature.
10:05 a.m. — Loonie sinking: Even before concerns about the COVID-19 pandemic went into overdrive, the Canadian dollar was down. Reuters reports that Tuesday morning, the Loonie hit a four-year low against the U.S. dollar.
On Friday, the Bank of Canada cut its key benchmark rate by 50 basis points to 0.75 per cent, then over the weekend the U.S. Federal Reserve slashed their rate to a range between zero and 0.25 per cent.
Part of the Canadian dollar weakness is driven by Canada’s economic reliance on oil production, and the crash in oil prices due to a price war between Russia and Saudi Arabia. According to Bloomberg, WTI crude was trading at US$29.35 around 10 a.m. Tuesday.
9:45 a.m. — Markets open after a rough Monday: Markets bounced back a bit in the first minutes of trading Tuesday. From Reuters: “The main U.S. stock indexes opened higher on Tuesday, a day after their biggest drop since the 1987 crash, as efforts to contain the rapidly spreading coronavirus upended parts of the economy and dampened business sentiment.”
In Toronto, the TSX was also up a bit. Reuters reports: “The Toronto Stock Exchange’s S&P/TSX composite index was up 158.48 points, or 1.28%, at 12,518.88.”
9:15 a.m. — CIBC adjusting bank branch operations: CIBC announced Tuesday that it will temporarily close 206 banking locations that do not offer over-the-counter banking services. Another 816 locations will remain open, but will have modified hours.
CIBC also said that clients facing financial hardship can call an advisor at 1-877-454-9030 to discuss flexible options to improve cash flow. You can read the full release from CIBC here.
8:35 a.m. — Ontario state of emergency: Ontario declared a state of emergency at 8:30 a.m. Tuesday.
Premier Doug Ford said he is prohibiting public events with more than 50 people until March. 31. The order also closes indoor recreational programs, public schools, libraries, theatres, regulated child care centres, and all bars and restaurants except for takeout.
“This is not a provincial shutdown,” he said.
Ford said that the vast majority of businesses will still be able to operate. Grocery stores, convenience stores, pharmacies, office buildings, and construction sites can continue to operate.
Ford called for more support for businesses, and changes to Employment Insurance to support workers.
8 a.m. — Westjet slashes international flights: Overnight, Westjet announced that it is cutting international flights in response to COVID-19. This is a developing story, but initial information can be found here.
The crisis is having a huge impact on airlines. For a broader view of how that’s unfolding, check out Emily Jackson’s report from yesterday on the turmoil, and Air Canada’s decision to cut back on flights by 50 per cent.
March 17, 2020
Good morning! Today is shaping up to be a strange St. Patrick’s Day, with government officials telling people to skip the usual revelry, in light of the pandemic. As the pandemic continues to unfold, we’re still watching for government announcements about how to support business and soften the economic disruptions. Keep refreshing this page to stay up to date on the latest COVID-19 business news as it happens.