Prof. Fournier's Press Review: June 28 to July 2
Agenda: Delta variant, Tesla, Suzy`s-Le Château, Volkswagen, United Airlines, Morgan Stanley, Cogeco, Bombardier, U.S. job market for June, Market Review.
Delta variant and the Australian Government. Given the progression of the Delta variant, the Australian government announced a total reconfinement of the city of Sydney. With a population of more than five million, it is one of the largest cities in Australia. This decision is to counter an outbreak of new cases of COVID-19 caused by the Delta variant. The Delta variant is considered more contagious according to France 24 and AFP. Read more here.
Recall of Tesla vehicles in China. According to Wall Street Journal, Chinese authorities have said Tesla will "recall" nearly 300,000 Model 3 and Model Y cars manufactured and imported in China. The recall is for an online driver assistance software update. Read more here.
Suzy`s buys Le Château. Following the end of the proceedings under the Companies` Creditors Arrangement Act, the Quebec retailer Le Château, founded in 1959, completed the sale of its assets to Suzy’s. Suzy`s, a retailer with more than 130 stores in Canada, specializes in shoes and clothing for women. After significant financial difficulty for more than 10 years, Le Château turned to the Companies` Creditors Arrangement Act last October, reports La Presse. Several other retailers such as Reitmans and Aldo have also filed for bankruptcy during the pandemic. The COVID-19 pandemic increased Le Château's difficulties. This crisis caused the cancellation of weddings and balls, sharply decreasing the demand for evening wear, representing almost half of Le Château’s income. Read more here.
Volkswagen and electric cars. German carmaker Volkswagen has said that it wants to stop selling combustion engine cars in Europe, according to Reuters. This switch to electric vehicles will occur between 2033 and 2035. Global automakers are setting their own combustion engine discontinuation schedules given increasingly strict new emissions standards. Read more here.
Record order for United Airlines. The American company United Airlines has completed an order that represents the largest in the company's history, reports CNBC. United Airlines renews its fleet by ordering 70 Airbus A321 as well as 200 Boeing 737 MAX. This order sends a clear signal that United Airlines is very confident about a solid recovery of commercial flights. United Airlines is part of the United Continental Holdings group headquartered in Chicago, Illinois. Read more here.
Morgan Stanley doubles its dividend. According to CNBC, several major US banks have announced that they will pay shareholders billions of dollars. This amount of money will be paid in the form of share buybacks and an increase in dividends. This move follows an announcement that the US Federal Reserve has lifted several restrictions. These restrictions were imposed on American banks at the start of the pandemic. Morgan Stanley Bank has announced that it will double its dividend from $ 1.40 to $ 2.80 per share on an annual basis and is also announcing a share buyback program of up to $ 12 billion by the end of June 2022. Read more here.
Acquisition in the United States for Cogeco. According to PR Newswire, Montreal-based Cogeco Communications’s subsidiary, Atlantic Broadband, has signed an agreement that will see it acquire all the Ohio-based WideOpenWest (WOW) cable systems. The transaction is valued at US$1.125 billion. Once the transaction is completed, approximately half of Cogeco Communications' revenues will be generated by the activities of the American subsidiary operating in 11 states. Read more here.
Order of $560 million for Bombardier. Montreal aircraft manufacturer Bombardier has announced that it has received a firm order for 10 business jets valued at CA $560 million, reports La Presse. Bombardier supports a global fleet of more than 4,900 aircraft in service with multinational corporations, charter and timeshare providers, governments, and individuals. Read more here.
The job market in the United States. CNBC reports that the US economy created more jobs in June than the expected 680,000 jobs. In total, 850,000 jobs were created. However, the number of people unemployed remained at 9.5 million, increasing the unemployment rate to 5.9%. The job creation for June was better than in May (559,000) but there are still 6.8 million fewer jobs available compared to February 2020, just before the start of the pandemic in the United States. Read more here.
Market Review. Supported by strong job creation figures released on Friday which confirmed the strength of the recovery in the US economy, the New York Stock Exchange ended the week at record levels according to CNBC. For the Toronto Stock Exchange, it ends with a gain of 60 points. Read more here.