Equities
Canada’s main stock index opened up Thursday with tech stocks advancing. Key U.S. indexes also saw early gains after a fresh reading on inflation fuelled speculation the Federal Reserve will hold rates steady next month.
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 58.25 points, or 0.29 per cent, at 20,388.57. The index was down more than 1 per cent heading for the month heading into Thursday’s session.
The Dow Jones Industrial Average rose 18.85 points, or 0.05 per cent, at the open to 34,909.09.
The S&P 500 opened higher by 2.14 points, or 0.05 per cent, at 4,517.01, while the Nasdaq Composite gained 22.23 points, or 0.16 per cent, to 14,041.54 at the opening bell.
On Wall Street, traders were weighing the latest U.S. personal consumption expenditures figures, which are a preferred measure of inflationary pressures for the Federal Reserve.
A Commerce Department report showed the personal consumption expenditures (PCE) price index, considered to be the Fed’s preferred inflation gauge, rose 3.3 per cent in July on an annual basis in line, matching economists’ forecasts. Excluding volatile food and energy components, the core PCE price index rose 4.2 per cent in July on an annual basis, also in line with expectations.
Markets are currently pricing in a hold by the Fed on interest rates at its September meeting but remained divided on the possibility of another hike in November.
In Canada, CIBC and Laurentian Bank both reported before the open, marking the last of Canada’s big banks to release third-quarter results. Laurentian is currently in the process of seeking a buyer.
The Globe’s Stefanie Marotta reports this morning that CIBC earned $1.43-billion, or $1.47 per share, in the three months that ended July 31. That compared with $1.67-billion, or $1.78 per share, in the same quarter last year. Adjusted to exclude certain items, the bank said it earned $1.52 per share. That fell below the $1.69 per share analysts expected, according to Refinitiv.
On Wednesday, National Bank reported a slight year-over-year rise in third-quarter profit that missed analysts’ estimates, as expenses rose, capital markets earnings slumped and the bank set aside more money for potentially bad loans.
Elsewhere, Vancouver-based Lululemon Athletica reports results after the close of trading.
Overseas, the pan-European STOXX 600 was up 0.32 per cent by midday. Britain’s FTSE 100 rose 0.15 per cent. Germany’s DAX and France’s CAC 40 gained 0.72 per cent and 0.06 per cent, respectively.
In Asia, Japan’s Nikkei finished up 0.88 per cent. Hong Kong’s Hang Seng lost 0.55 per cent.
Commodities
Crude were modestly higher, shaking off early weakness after new data showed manufacturing activity in China contracted for a fifth consecutive month.
The day range on Brent was US$85.74 to US$86.16 in the early premarket period. The range on West Texas Intermediate was US$81.48 to US$81.95.
New figures released early Thursday showed China’s official purchasing managers’ index (PMI) rose to 49.7 from 49.3 in July, according to the National Bureau of Statistics, but remained below the 50-point level demarcating contraction from expansion, Reuters reported.
“The most recent official PMI data exhibited a mixed picture at best,” Stephen Innes, managing partner with SPI Asset Management, said.
“The manufacturing index showed a marginal uptick, reaching 49.7. This marks the third consecutive increase since the low point 48.8 in May. However, it remains below the pivotal 50-level that signifies expansion, indicating a mere slowdown in the pace of decline.”
Meanwhile, prices drew some support from the latest U.S. inventory figures from the U.S. Energy Information Administration, which showed a bigger-than-expected decline in crude stocks.
U.S. crude inventories fell by 10.6 million barrels in the last week to 422.9 million barrels, according to the EIA. Analysts in a Reuters poll expected a 3.3 million-barrel drop.
In other commodities, the gold was trading near its best level in a month after U.S. economic data this week underpinned hopes that the Fed would keep interest rates unchanged next month.
Spot gold was up 0.2 per cent at US$1,945.63 per ounce. U.S. gold futures steadied at US$1,972.50.
Currencies
The Canadian dollar was slightly weaker while the greenback firmed against world currencies and looked set for a monthly gain of more than 1 per cent.
The day range on the loonie was 73.80 US cents to 73.97 US cents in the early premarket period. The Canadian dollar has slid more than 1 per cent against its U.S. counterpart over the past month.
There were no major Canadian economic reports due Thursday. Markets will get June and second-quarter GDP figures on Friday morning.
On world markets, the U.S. dollar index was up 0.35 per cent at 103.52 early Thursday morning. The index is down for the week so far but up about 1.4 per cent for the month.
The euro was last at US$1.0888, down 0.3 per cent on the day, but still up almost 1 per cent this week, according to figures from Reuters. Britain’s pound was slightly weaker at US$1.2700. Both the pound and the euro are set for monthly declines.
In bonds, the yield on the U.S. 10-year note was lower at 4.106 per cent in the predawn period.
More company news
Canada’s Altagas has agreed to buy some natural gas assets from Tidewater Midstream and Infrastructure for $650-million, the companies said on Thursday. Under the agreement, Altagas will acquire the Pipestone Natural Gas plant, Dimsdale natural gas storage facility and the associated pipeline systems required to operate these assets. Tidewater said it will use the net proceeds for general purposes, including the repayment of a credit facility. -Reuters
Salesforce raised its annual revenue forecast on Wednesday and projected quarterly sales above estimates as it benefits from a recent price hike and resilient demand for its cloud and business software offerings in an uncertain economy. The results fan optimism about a recovery in technology spending in the second half of 2023 after earnings from major cloud players including Amazon.com and Alphabet-owned Google suggested that the slowdown was nearing an end. The company expects revenue to be between US$8.70-billion and US$8.72-billion in the third quarter, compared with estimates of US$8.66-billion, according to Refinitiv data. Its quarterly earnings per share forecast was also above estimates. -Reuters
Economic news
(8:30 a.m. ET) U.S. initial jobless claims for week of Aug 27.
(8:30 a.m. ET) U.S. personal spending and income for July.
(8:30 a.m. ET) U.S. core PCE price index for July.
(9:45 a.m. ET) U.S. Chicago PMI for August.
With Reuters and The Canadian Press