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Stocks recover some of Tuesday’s losses after Democratic primaries

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Stocks rose Wednesday, recovering some losses after a sell-off Tuesday knocked each of the three major indices by more than 2.8%.

Take our quick poll: Do you think the stock market has bottomed?

10:02 a.m. ET: Bank of Canada cuts benchmark interest rate by a half percentage point, mirroring Fed move

The Bank of Canada slashed interest rates by 50 basis points in its regularly scheduled monetary policy meeting Wednesday, bringing the benchmark rate down to 1.25%.

Canadian stocks rose following the announcement, with the S&P/TSX Composite up about 1%. The rate cut had been mostly expected by market pundits after the U.S. Federal Reserve’s own move Tuesday to bring U.S. benchmark rates down by 50 basis points to a band of between 1.00% and 1.25%.

10:00 a.m. ET: ISM February non-manufacturing index tops expectations

The Institute for Supply Management’s non-manufacturing index came in ahead of expectations for February, rising to 57.3 versus a print of 54.8 expected.

The index in January had been 55.5. Readings above the neutral level of 50 indicate expansion in a sector.

9:45 a.m. ET: IHS Markit U.S. services PMI contracts for the first time in four years

The U.S. services sector contracted for the first time in four years, and at the fastest pace since October 2013, according to a IHS Markit’s final February services purchasing managers’ index (PMI) released Wednesday.

For February, the services PMI came in at 49.4, matching the advance print released several weeks ago. In January, the services PMI had been 53.4. Readings above the neutral level of 50 indicate expansion in as sector.

“Business sectors such as travel and tourism are reporting weakened activity due to the virus outbreak, most notably in terms of foreign visitors and overseas sales,” Chris Williamson, chief business economist at IHS Markit, said in a statement. “However, other sectors such as financial services and business services are reporting virus-related hits to demand, suggesting a more broad-based weakening of demand across the economy, exacerbating the supply-shock that is constraining manufacturing.”

9:37 a.m. ET: Stocks open higher, holding onto overnight gains

The three major indices extended gains from during the overnight session to open higher. Gains in the Dow were led by a more than 11% surge in shares of UnitedHealth Group. Peer health-care stocks Pfizer and Walgreens Boots Alliance also outperformed.

This came after Bernie Sanders lost footing to former Vice President Joe Biden in Democratic primaries held Tuesday, suggesting a candidate with less progressive policies affecting industries including health-care could clinch the Democratic presidential nomination. The Health-care sector also led gains in the S&P 500.

Here were the main moves in markets as of 9:37 a.m. ET:

  • S&P 500 (^GSPC): +1.73% or +51.98 points to 3,055.35

  • Dow (^DJI): +2.15% or +555.99 points to 26,473.4

  • Nasdaq (^IXIC): +1.22% or +107.15 points to 8,791.24

  • Crude oil (CL=F): +2.42% or +$1.14 to $48.32 a barrel

  • Gold (GC=F): -0.21% or -$3.40 to $1,641.00 per ounce

  • 10-year Treasury (^TNX): yielding 0.976%, down 4.1 bps

8:15 a.m. ET: U.S. economy adds 183,000 private payrolls in February, topping expectations, ADP reports

Private payrolls rose by a 183,000 in February, according to a monthly report from ADP/Moody’s. This beat expectations for a rise of 170,000, according to Bloomberg-compiled consensus data.

February’s payroll gains were again led by the service-providing sector, which added a net 172,000 positions. Education and health services industries added 46,000 payrolls, and leisure and hospitality industries added 44,000 payrolls.

Within the goods-producing sector, construction added 18,000 payrolls, while mining and manufacturing industries shed 3,000 and 4,000 roles, respectively.

For January, private payroll additions were downwardly revised to 209,000, from the gain of 291,000 previously reported.

7:48 a.m. ET: Stock futures jump after Tuesday’s rout

U.S. stock futures were higher Wednesday morning in the wake of the Federal Reserve’s emergency rate cut Tuesday morning, and after former Vice President Joe Biden staged a major comeback in voter support during Super Tuesday.

Dow futures were up more than 700 points just before 8 a.m. ET, extending a march higher throughout much of the overnight session. The 30-stock index had shed more than 900 points by market close Tuesday, after an unexpected inter-meeting interest rate cut from the Fed failed to imbue confidence with investors amid a still-escalating coronavirus outbreak.

Politics also remained a focal point, with major wins for Biden during Super Tuesday helping appease investors seeking a moderate, and perceived market-friendly candidate, for the Democratic nomination. Biden won nine states during the major primary night, including unexpected victories in Texas and Massachusetts. Bernie Sanders landed wins including California, a major source of delegates, as well as Colorado, Utah and Vermont, his home state.

Here were the main moves during the pre-market session, as of 7:48 a.m. ET:

  • S&P 500 futures (ES=F): 3,072.00, up 75 points or 2.5%

  • Dow futures (YM=F): 26,609.00, up 729 points or 2.82%

  • Nasdaq futures (NQ=F): 8,804.00, up 221.5 points or 2.58%

  • Crude oil (CL=F): $48.08 per barrel, up $0.90 or 1.91%

  • Gold (GC=F): $1,648.10 per ounce, up $3.70 or 0.23%

  • 10-year Treasury (^TNX): yielding 1.01%, down 0.7 bps

NEW YORK, NEW YORK – MARCH 03: Traders work on the floor of the New York Stock Exchange (NYSE) on March 03, 2020 in New York City. Following a strong market surge yesterday, stocks one again fell on Wall Street as global concerns over the financial impact from the Coronavirus drive investments down. (Photo by Spencer Platt/Getty Images)

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North Cowichan council members face financial ding for bad behaviour – Cowichan Valley Citizen

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Council members in North Cowichan will now have to pay a financial price if found guilty of contravening the municipality’s new standards of conduct policy.

In 2018, the municipality adopted the policy which set out the expectation for council members to adhere to when carrying out their duties and functions on behalf of North Cowichan.

If a council member is accused of harassment, bullying, intimidation, violence, and/or discrimination during these times, the municipality is mandated under the policy to hire a third-party investigator to determine the validity of the accusations.

The hiring of an investigator can be a significant expense, and council decided at its meeting on Oct. 21 that when a member of council has been found to have breached the policy, he or she must contribute towards the costs of the investigation.

For the first offence, council members will receive a 10 per cent pay reduction for 12 months, which is approximately $3,000 for a councillor and $8,000 for the mayor.

A second offence will result in a 15 per cent pay reduction, but if there is any overlap between the first offence and second offence, the offending council member will see a pay reduction of 25 per cent while those periods coincide.

Council members will face a 25 per cent reduction in pay for 12 months for the third and subsequent offences, and overlapping offences within those 12 months could result in reductions of 50 per cent where there are three concurrent offences, 75 per cent for four concurrent offences, or even 100 per cent if there are five or more concurrent offences.

Mayor Al Siebring said some may say that the financial penalties are overkill, but they are a good deterrent to bad behaviour of council members.

“Without this, our code of conduct would be just symbolic, but this will add some enforcement to it,” he said.

Coun. Kate Marsh said she was impressed with the repercussions council members could face when exhibiting bad behaviour.

“One of the challenging things about the code of conduct is consequences, and a cut in pay will add teeth to it,” she said.



robert.barron@cowichanvalleycitizen.com

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HSBC considers paying 2020 dividend as profits beat estimates

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HSBC said it would consider paying a “conservative” 2020 dividend after Europe’s largest bank unveiled a better-than-expected third-quarter profit on lower provisions for bad loans.

The lender on Tuesday reported a 36 per cent year-on-year drop in pre-tax profits to $3.1bn for the three months to September, which was above bank-compiled analyst forecasts of $2.1bn. Noel Quinn, HSBC’s chief executive, labelled the results “promising”.

HSBC shares rose as much as 5.3 per cent in Hong Kong on Tuesday after the results were released, hitting their highest level in about two months.

HSBC cancelled its payout for the first time in 74 years earlier this year following pressure from the Bank of England, infuriating its Hong Kong shareholders. It said a 2020 payout would depend on the bank’s forecasts for 2021 and its consultations with regulators. “We will seek to pay a conservative dividend if circumstances allow,” Mr Quinn said.

Provisions for bad loans dropped to $785m in the third quarter compared with $3.8bn in the previous quarter. The average analyst forecast was for $2bn in provisions for the third quarter.

The lender said it expected total loan losses to be closer to the lower end of the $8-13bn range it had earlier forecast for the whole year.

“This latest guidance, which continues to be subject to a high degree of uncertainty due to Covid-19 and geopolitical tensions, assumes that the likelihood of further significant deterioration in the current economic outlook is low,” the bank said.

The slower rate of new provisions in the third quarter came as the global economy tentatively reopened from strict lockdowns prompted by the pandemic.

This matched the trend last week at Barclays, which set aside an additional £608m, substantially lower than the £3.7bn reserved in the first six months of the year.

HSBC revenue fell by 11 per cent year on year to $11.9bn in the third quarter.

HSBC’s shares have plunged by more than 40 per cent this year as the lender struggles with the combined challenges of coronavirus, a UK regulatory ban on dividends, ultra-low interest rates and a confrontation between China and the west over Hong Kong, its most important market.

The bank said it expected to further cut costs. It would look to lower its original $31bn target for its annual cost base for 2022, adding it would release a “detailed and updated” transformation plan when it published its full-year results.

Mark Tucker, chairman, and Mr Quinn are re-evaluating a strategy unveiled only in February, preparing deeper cuts and exploring the sale of persistently underperforming businesses, such as its US retail arm, the FT has reported.

Mr Quinn said on Tuesday that the smaller fall in profits before tax for the quarter was in part due to the lower expected loan losses and “continued good cost management”. 

HSBC said it expected to increase investment in Asia due to the region’s economies “rebounding strongly” from the pandemic. The bank said it would provide an update on the future of its French and US operations in February 2021.

The bank highlighted the passage of a national security law and US sanctions on 11 Hong Kong officials under a list of risks to its operations. The US has threatened secondary sanctions on financial institutions which fail to cut ties with the officials.

“The financial impact to the group of geopolitical risks in Asia is heightened due to the strategic importance of the region, and Hong Kong in particular, in terms of profitability and prospects for growth,” HSBC said.

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Retiring finance minister Carole James tears up at outpouring of support

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Signing thank you cards in her B.C. Legislature office is what “retirement” looks like for out-going finance minister Carole James.

“I guess I’m a failure at retirement so far,” laughs James.  “I’m continuing on as a caretaker government for the next couple of weeks.”  

This is the first election in three decades that the four-time MLA and former Greater Victoria School Board trustee hasn’t run.

“This is the first election since 1990 when my name wasn’t on the ballot when I went to vote so it was a very strange experience, very strange experience, going to take some adjustments no question about it,”  James says. 

James led the BC NDP for seven years — taking over in November 2003 when morale was low after the party had been decimated to just two seats in the 2001 election.

In 2005, she helped the NDP win more than 41 per cent of the popular vote and 33 seats — including her own riding of Victoria-Beacon Hill, beating incumbent Jeff Bray, who she’d lost to in 2001 by just 35 votes.

“There are nice people in politics and Carole is one of them,” Bray says.

“She has always been respectful, always been friendly and is always trying to do the right thing. ”

But one of the toughest political moments came in December 2010, when Jenny Kwan publicly criticized James and called for an immediate leadership convention.

“I joked I’ve seen the good the bad and the ugly in politics and I think lots of leaders have gone through that experience but I also think it strengthens your values,” James says.

James stepped aside but instead of quitting, she stayed on to help the party.

“Credit to her, rather than fighting back, rather than being bitter about it she doubled down and gave all of her time and effort to both incoming leaders who followed her,” says Stephen Smart, former press secretary to premier Christy Clark and a member of the press gallery during the leadership crisis.

As accolades pour in on social media for the 62-year-old who’s made friends across party lines, she can’t help but tear up.

“It really has been pretty overwhelming,” says an emotional James. “I get choked up thinking about it because it has really been such a privilege for me to be able serve my community.”

Focusing on her family and her health after being diagnosed with Parkinson’s Disease, James plans to take up boxing and hopes people will remember her for working hard and always keeping her integrity.



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