For the sixth straight day, on Thursday, as CTV reports, drops in oil prices, subsequently effecting the energy sector, and problematic negotiations regarding trade forced Canada’s main stock index to be closed down.
The managing director with Portfolio Management Corp, Anish Chopra, blames this on the economic challenges emanating from ongoing trade disputes between China and the United States.
Several areas of the economy were adversely hit by this issue, including the base metals, energy and information technology sector, the health-care sector now mainly cannabis-dominated, and even gold.
On a more positive note, consumer staples actually rose in shares by about 4.5%, after Alimentation Couche-Tard Inc., a very popular Canadian convenience store chain posted their quarterly results
According to Globe and Mail, the chain, which has over eight thousand outlets in the US, had an increase in fuel retail business by 59.8%, rising to an $11 billion industry. Moreover, the company purchased a Texas-based fuel and convenience retailer called CST for $4.4 billion in 2016 in order to develop a better influence in America.
Under Couche-Tard’s thumb, revenue from all of the company’s owned convenient stores like CST, increased to $3.55 billion, a 27.6% rise. This means that there was an increase by $455.6 million, 81% cents per share in only the first quarter which ended on July 22.
In all, the company saw a rise in its net revenue to $14.79 billion, an increase by 50.2%.
In a discussion from the Bank of Canada senior deputy governor Carolyn Wilkins, issuing comments regarding the uncertain economic circumstances of the tariffs between Canada and the USA, Wilkins suggests that business confidence has suffered as a result.
As a result of NAFTA, Foreign Affairs Minister Chrystia Freeland and the American negotiator Robert Lightizer finally found compromise which, consequently, developed new orders for their negotiating teams.
The issue with the Canadian dollar at this juncture is that, obviously, Couche-Tard Inc. cannot carry Canada alone.
Anish Chopra explained that the value of the Canadian dollar is essentially controlled by the outcome of either positive or negative news and negotiations.
To quote the managing director, “If the newsflow is modestly positive you get a bid on the Canadian dollar whereas if the newsflow is negative then the Canadian dollar loses ground.”
Canada and the US still need to resolve three significant trade issues: the first being the Chapter 19 dispute resolution mechanism, the anti-dumping issue, secondly culture, and the third being dairy.
The dairy industry’s supply management system is one of the most important issues in Canada, and the subject continues to divide its citizenry. In a poll by realagriculture, 37% of Canadians want an end to the supply management system.
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