Equities
Canada’s main stock index rose at Friday’s opening bell, helped by gains in the energy and financial sectors. Key Wall Street indexes started down after a disappointing reading on retails sales, although sold bank results helped shore up sentiment.
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 35.12 points, or 0.17 per cent, at 20,599.61.
The Dow Jones Industrial Average fell 47.98 points, or 0.14 per cent, at the open to 33,981.71. The S&P 500 opened lower by 6.11 points, or 0.15 per cent, at 4,140.11, while the Nasdaq Composite dropped 48.36 points, or 0.40 per cent, to 12,117.91 at the opening bell.
Early Friday, Wall Street got results from JPMorgan Chase & Co. and Wells Fargo & Co. Analysts are watching for any insight into the health of the regional banking system and how lending activity is holding up.
JP Morgan said profit rose 52 per cent to US$12.62-billion, or US$4.10 per share, in the three months ended Mar. 31, compared with US$8.28-billion, or US$2.63 per per share, a year ago. Shares were up in premarket trading but were down just after the opening bell in New York.
Wells Fargo, meanwhile, reported a profit of US$4.99-billion, or US$1.23 per share, for the quarter ended March 31, compared with US$3.79-billion, or 91 US cents per share, a year ago.
Overall, analysts are looking for first-quarter earnings from S&P 500 companies to come in 5.2-per-cent below the same period a year earlier, according to Refinitiv.
On the economic side, U.S. retail sales fell 1 per cent in March. Economists had been expecting a 0.5-per-cent decrease.
In Canada, Statistics Canada says factory sales fell 3.6 per cent to $71.5-billion. That came after a 4.5-per-cent increase the month before. Sales were down in 12 of 21 subsectors, led petroleum and coal products and motor vehicles, the agency said.
Canada’s real estate market is also in focus.
The Canadian Real Estate Association says national home sales rose 1.4 per cent month-over-month in March. Actual sales were down 34.4 per cent from the same month a year earlier. The MLS Home Price Index edged up 0.2 per cent for the month but was down 15.5 per cent from last march.
“The real story is the lack of new listings, which are trending at multi-decade lows for the month of March in some markets. There’s no forced selling out there, and most don’t seem to want to sell into a down market,” BMO senior economist Robert Kavcic said in a note ahead of the release of the latest figures.
Overseas, the pan-European STOXX 600 was up 0.32 per cent in morning trading. That index is headed for a weekly gain of more than 1 per cent. Britain’s FTSE 100 gained 0.23 per cent. Germany’s DAX added 0.24 per cent while France’s CAC 40 rose 0.19 per cent.
In Asia, Japan’s Nikkei ended up 1.2 per cent. Hong Kong’s Hang Seng gained 0.46 per cent.
Commodities
Crude prices were little changed after the International Energy Agency cautioned that recent output cuts by the OPEC+ group could weigh on the global economic recovery.
The day range on Brent was US$85.62 to US$86.56 early Friday morning. The range on West Texas Intermediate was US$81.76 to US$82.64.
Both benchmarks saw losses on Thursday but still are headed for a fourth consecutive weekly gain.
“The oil market looks like it will remain tight but if this profit-taking selloff is gaining steam, prices could still have more to give as this rally started from the mid-$60s,” OANDA senior analyst Ed Moya said in a note.
Meanwhile, the IEA’s monthly report noted that OPEC’s surprise decision to cut production could hit consumers as well as the global recovery.
“Consumers confronted by inflated prices for basic necessities will now have to spread their budgets even more thinly,” the agency said.
“This augurs badly for the economic recovery and growth,” it added.
The IEA said it expected global oil supply to fall by 400,000 bpd by the end of the year, citing an expected production increase of 1 million bpd from outside of OPEC+ beginning in March versus a 1.4 million bpd decline from the producer bloc, Reuters reported.
In other commodities, gold prices gained as the U.S. dollar slid on growing expectations that the Federal Reserve is nearing the end of its tightening cycle.
Spot gold was up 0.1 per cent at US$2,042.01 per ounce early Friday morning after hitting a one-year high during the previous session.
U.S. gold futures rose 0.1 per cent to US$2,056.70.
“If gold can rally above the current record of $2,075.47/oz, it might not have much difficulty targeting the $2100 level,” Mr. Moya said.
Currencies
The Canadian dollar was firmer, trading around the 75-US-cent mark, while its U.S. counterpart traded near its lowest level in a year against a basket of currencies.
The day range on the loonie is 74.93 US cents to 75.09 US cents. The Canadian dollar has gained about 1.5 per cent against the greenback over the last five days and about 3 per cent over the past month.
“Solid CAD gains on the week reflect U.S./Canada yield spread compression and firmer crude oil (and a further rebound in commodity prices more generally),” Shaun Osborne, chief FX strategist with Scotiabank, said. “Seasonality and positioning may also be playing a part in the CAD’s gains.”
On world markets, the U.S. dollar index, which weighs the greenback against a selection of currencies, slid to a roughly one-year low of 100.78 early Friday and was last down 0.1 per cent at 100.90, according to figures from Reuters.
The index is down about 1 per cent and on track for its fifth consecutive week of declines.
Elsewhere, Britain’s pound hit a 10-month high of US$1.2545 earlier in the day, and was flat at US$1.2512, Reuters reported. Against the euro, it was down 0.2 per cent at 88.39 pence.
In bonds, the yield on the U.S. 10-year note was lower at 3.439 per cent in the early hours.
More company news
Loblaw Companies Ltd on Friday said it would spend $2-billion to expand its business in 2023 and create more than 6,000 new jobs in retail, supply chain, technology and construction in Canada. The retailer’s investment comes at a time when it is seeing strength in its pharmacy business, as well as a steady demand for groceries amid rising fears of a recession. Loblaw also expects to use the investment to grow and improve its stores; it said it will open 38 new or relocated stores and renovate or convert nearly 600 others. -Reuters
Citigroup Inc posted a rise in first-quarter profit on Friday as it earned more from borrowers paying interest on loans. Net income rose 7% to US$4.6-billion, or US$2.19 per share, in the three months to March 31 from US$4.3-billion, or US$2.02, a year earlier.
Canadian Pacific Railway Ltd. and Kansas City Southern have officially combined to create Canadian Pacific Kansas City. CP completed its US$31-billion acquisition of KCS in December 2021, but placed the KCS shares into a voting trust, which ensured the U.S. railway operated independently during a regulatory review. The U.S. Surface Transportation Board gave its final approval of the deal last month, clearing the way for the combination. -The Canadian Press
Boeing has halted deliveries of some 737 MAXs as it grapples with a new supplier quality problem by Spirit AeroSystems that could stretch back to 2019, the U.S. planemaker disclosed on Thursday. The issue will likely affect a “significant” number of undelivered 737 MAX airplanes both in production and in storage, and could result in lowered 737 MAX deliveries in the near term, the company said. -Reuters
Economic news
(8:30 a.m. ET) Canadian manufacturing sales and new orders for February.
(8:30 a.m. ET) U.S. retail sales for March.
(9 a.m. ET) Canadian existing home sales and average prices for March.
(9 a.m. ET) Canada’s MLS Home Price Index for March.
(9:15 a.m. ET) U.S. industrial production for March.
(10 a.m. ET) U.S. business inventories for February.
(10 a.m. ET) U.S. University of Michigan consumer sentiment for April.
With Reuters and The Canadian Press