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It’s day 78 since Canada’s 100th coronavirus case. The number of cases is 87,482 as of publication time, up 835 since yesterday—a 20 per cent decrease from the seven-day prior average of new cases. On their respective 78th day, U.S. daily new cases were down 14 per cent from the seven-day prior average; the U.K. was down 15 per cent in daily new cases from the seven-day prior; and in Italy, new cases were down 37 per cent.
Profit declines don’t dampen bank stocks: Two more of Canada’s biggest banks reported steep profit declines after putting aside billions to cover credit losses amid the COVID-19 pandemic. RBC reported net income of $1.48 billion in its fiscal second quarter, down 54 per cent year over year, and upped its contingency provisions to $2.8 billion, a more than fivefold increase. BMO profits dropped 54 per cent to $689 million as it increased its credit-loss provision by $942 million. Both banks’ stocks rose on their earnings reports, despite coming in below analysts’ forecasts. RBC, which has been trading the title of Canada’s largest public company with Shopify for much of May, even regained the top spot, after the e-commerce firm fell more than two per cent in Wednesday trading.
In the markets: All major North American indices closed up today on small increases in economic activity and optimism that governments will provide more stimulus. The tech-heavy Nasdaq increased the least, up 0.77 per cent, as Netflix and Amazon both fell. The Canadian dollar continued its two-month long rally to reach 72.66 cents U.S. in late afternoon trading.
News from around the world was less rosy. The French economy could contract by 20 per cent in the second quarter, according to the country’s statistics agency. The coronavirus’s hit to the eurozone is set to be worse than the impact of the 2008 financial crisis. Brussels is asking for €750 billion to fuel virus recovery. Meanwhile, global energy investment is on track to fall by almost US$400 billion this year. That’s a 20 per cent drop compared with the International Energy Agency’s pre-pandemic prediction of a two per cent increase.
Cross-country checkup: Parliamentary budget officer Yves Giroux estimated the federal deficit will be $260 billion for the year, up from his $252.1-billion previous projection.
Before the pandemic, the government anticipated a $28.1-billion deficit for 2020–2021. The military released a second report on long-term care homes on Wednesday, this one focused on Quebec facilities. It described staff at some facilities ignoring safety instructions, being late or absent during shifts and supplies going missing, including masks and narcotics. Local health officers across Ontario are urging the province to take a regional approach to reopening, varying by how the pandemic has hit different cities and towns.
Bay Street to Main Street: House prices in Alberta and Saskatchewan could drop by as much as 25 per cent this year, according to the Canada Mortgage and Housing Corporation (CMHC). New home builds nationwide could drop by 75 per cent due to restrictions on construction and widespread stay-at-home orders. Things may start to turn around in 2021. “Following large declines in 2020, housing starts, sales and prices are expected to start to recover by mid-2021 as pandemic containment measures are lifted and economic conditions gradually improve,” CMHC said. House resales have already dropped 57 per cent in April year over year. In Toronto, resales are down 67 per cent and new home sales are down 80 per cent.
- Jordan Bitove and Paul Rivett made an offer to purchase Toronto Star parent company Torstar for $52 million and intend to take it private. The company’s board has approved the deal and shareholders will vote in mid-July.
- Fintech Koho has rolled out a new feature offering advance payment of $100 of people’s Canada Emergency Response Benefit.
- New York Governor Andrew Cuomo wants to bring in hydropower from Canada to fuel economic recovery in his state.
- Transat has pushed back the date it or Air Canada can walk away from their $720-million deal after European regulators announced they were investigating the merger on antitrust grounds.
In the lab: Vancouver-based AbCellera Biologics, which has been working with pharmaceutical firm Eli Lilly to develop a coronavirus antibody drug, has raised US$105 million. The round was led by U.S. early-stage investors OrbiMed and DCVC Bio, and also included Silicon Valley billionaire Peter Thiel, among others. Meanwhile, U.S. drugmaker Novavax bought a manufacturing facility from Serum Institute of India, the world’s largest maker of vaccines by volume, as it gets ready to produce one billion doses of its vaccine candidate.
Crowdsourcing the crisis: The federal government is seeking feedback from businesses on the Canada Emergency Wage Subsidy program. You can participate here. Brookfield Institute has compiled a list of COVID-19 startup and scale-up supports around the world.
Trace me on my cellphone: Japan has unveiled plans for its optional app, which will use Apple and Google’s technology, in an attempt to prevent a second wave of infection. Qatar’s mandatory contact-tracing app had a security flaw, now fixed, that put the personal details of more than a million people at risk, according to an investigation by Amnesty International.
Drinking from the firehose:
- Highly rated U.S. companies, including Disney, Apple and ExxonMobil, have borrowed a total of US$1 trillion in the past five months—compared to US$540 billion for the same period last year—to strengthen their balance sheets while yields are low.
- Shares of tech stocks that had benefited from the pandemic, including Shopify, Zoom and Netflix, closed lower on Tuesday against daily market trends as governments ease lockdowns.
- Tesla is slashing the cost of its electric vehicles in North America by as much as six per cent in a bid to boost sales after slow demand throughout the pandemic.
- Google plans to have 10 per cent of its staff back in its offices starting July 6 and 30 per cent back by September. Meanwhile, the company will give employees working from home up to US$1,000 for equipment they need to do their job remotely.
- Disney aims to reopen some of its Florida theme parks starting on July 11 with “significant limits” on attendance.
- Several U.S. local news TV stations broadcast a nearly identical segment lauding Amazon’s response to the COVID-19 pandemic; Amazon itself provided the scripts and video clips to the stations through a service that distributes press releases.
- Boeing plans to cut over 13,000 employees—5,520 of whom have been approved for voluntary severance packages—as it reduces jetliner production in response to the pandemic.
- California-based drone company Zipline is now shipping medical supplies to hospitals in North Carolina through a pilot program developed in Africa.
Around the world: The European Commission released a €750-billion coronavirus-recovery plan and €1.1-trillion budget proposal. All EU members and the European parliament must approve the plan; the proposal is “likely to set off weeks of wrangling” in a divided continent, according to The Associated Press. The plan includes financing for renewable energy, electric vehicle charging and other emissions-reducing projects, as well as investments in 5G and artificial intelligence technologies. Japan also approved a relief package worth US$1.1 trillion, doubling its stimulus spending from last month, equivalent to almost 40 per cent of its GDP. The World Health Organization has published a manifesto for a green recovery from COVID-19.
Paris, 100 years later: Eugène Atget, a 20th-century photographer, once took photos of a deserted Paris every morning. Mauricio Lima, a Brazilian photographer, shot the same scenes in a city now deserted because of COVID-19.
* We’re emphasizing new cases, rather than running totals, because “flattening the curve” is when each day’s new cases are fewer than those of the previous day. The percentage increase is determined based on how today’s cases compare to a rolling seven-day prior average. Numbers may also vary based on countries’ individual testing capacity and reporting.
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