Equities
Global markets saw gains after U.S. Federal Reserve chairman Jerome Powell’s cautiously encouraging testimony to Congress yesterday buoyed hopes that interest rate cuts could start as early as September.
The S&P 500 and the Nasdaq notched fresh highs at the open for the fifth straight session, as continued strength in shares of its biggest companies fuelled a record rally.
The S&P 500 rose 0.26 per cent to 5,591.26, and the Nasdaq Composite gained 0.45 per cent to 18,512.09, while the Dow Jones Industrial Average fell 0.05 per cent to 39,272.45 at the bell.
The Toronto Stock Exchange’s S&P/TSX composite index opened 0.32 per cent higher at 22,112.02, boosted by gains in materials shares.
“The main takeaway [from Powell’s comments] is that, moving forward, the jobs data will generate as much euphoria as the inflation numbers,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in a note. “... Investors will be more eager to put an accidental uptick, or less ideal inflation numbers, in perspective and remain confident that things – in terms of rate cut expectations – are moving toward the right direction.”
Powell’s semi-annual testimony continues today.
Overseas, the pan-European STOXX 600 was up 0.55 per cent in morning trading. Britain’s FTSE 100 gained 0.59 per cent, Germany’s DAX added 0.64 per cent and France’s CAC 40 rose 0.61 per cent.
In Asia, Japan’s Nikkei closed 0.61 per cent higher, while Hong Kong’s Hang Seng declined 0.29 per cent.
Commodities
Oil prices steadied as the Organization of the Petroleum Exporting Countries (OPEC) kept its growth forecast for oil demand unchanged for this year and next, while U.S. crude and gasoline inventories likely fell last week.
Brent futures were up 0.1 per cent at US$84.67 a barrel, while U.S. West Texas Intermediate (WTI) crude also advanced 0.1 per cent to US$81.52 a barrel.
In other commodities, spot gold rose 0.6 per cent to US$2,378.26 an ounce, while U.S. gold futures climbed 0.7 per cent to US$2,384.80 an ounce.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 73.28 US cents to 73.46 US cents in the early premarket period. The Canadian dollar was up about 0.72 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, slipped 0.1 per cent to 105.03.
The euro gained 0.12 per cent to US$1.0826. The British pound advanced 0.16 per cent to US$1.2808.
In bonds, the yield on the U.S. 10-year note was last down at 4.287 per cent.
Economic news
Chinese June consumer prices and producer prices
10 am ET: U.S. Fed Chair Powell testifies to the House Financial Services Committee.
10 am ET: U.S. wholesale inventories for May.
With Reuters and The Canadian Press