Here are five things you need to know this morning:
Crowdstruck: An update gone wrong from cybersecurity software firm CrowdStrike has caused IT chaos around the world, impacting banking, media, airline and even emergency services. It’s not immediately clear what happened but it seems to be related to the company’s Falcon Sensor product, which monitors cyber threats. An update to the product is seemingly causing problems on millions of devices using Microsoft Windows, a pretty much ubiquitous software platform. The company’s shares are down 20 per cent in premarket trading this morning, and Microsoft’s stock price is also underwater while the companies point fingers at each other. CrowdStrike CEO George Kurtz says the incident is not a security incident or cyberhack and has stressed that a fix has been deployed, but the chaos is still reverberating around the world, with companies as diverse as McDonald’s, United Airlines and the London Stock Exchange all reporting problems. So whether you’re trying to fly somewhere today, do something online or even just buy something or get paid, expect delays and problems while the situation gets resolved. “I don’t think it’s too early to call it: this will be the largest IT outage in history,” Troy Hunt, an Australian security consultant, said in an interview with Bloomberg.
Netflix extends lead in the streaming race: Netflix revealed quarterly results after markets closed on Thursday, and the numbers showed that the streaming giant added 8 million customers during the quarter. The company now has 278 million paying customers around the world; far more than any other streaming platform. Almost half of the new sign-ups were for the company’s lower-priced tier with ads, but in a market showing increasing signs of saturation, the growth is impressive. The company posted net income of US$2.1 billion and revenue of $9.5 billion, a 17 per cent increase from this time last year.
Retail sales continue to slump: Statistics Canada revealed retail sales numbers this morning, and the data showed that receipts at retailers declined in May and likely into June, too. The data agency reported that Canadian retailers racked up $66.1 billion in sales in May. That’s down 0.8 per cent from April’s level, which is looking like the only month so far in 2024 to have eked out any growth. With approximately 50 per cent of the data for June collected so far, the figure for that month is headed toward another 0.3 per cent in June from May’s level. Add it up and it’s another sign of a cooling economy, and more reasons for the Bank of Canada to cut interest rates at its meeting next week.
Trump Trade continues: Donald Trump closed out the Republican National Convention last night; the cap of a whirlwind few weeks in U.S. politics. Since the debate with his Democratic rival Joe Biden last month, Trump’s odds of being elected have been steadily ratcheting higher, and markets are responding accordingly. A staunch economic protectionist, Trump’s rise has increased expectations around the world that tariffs will be a factor in U.S. trade policy moving forward. Equity investors have flocked to U.S. stocks this week, with US$45 billion in global capital flowing to U.S. equity funds in the week up to Wednesday. That’s the fourth-largest inflow on record, with small cap stocks in particular seeing a record high of $9.9 billion, according to Bank of America Corp strategists.
Choice Properties REIT misses analyst estimates on FFO: Choice Properties REIT, the Loblaws-linked real estate arm, posted quarterly results after the bell on Thursday and the numbers showed that the trust slightly missed analysts’ expectations on funds from operations (FFO), a closely watched metric for REITS. The figure came in at $0.255. That’s up from $0.254 last year, but below the $0.26 that analysts were looking for. Net income, meanwhile, came in at $513.2 million, below last year’s level but well ahead of the $107 million estimate.