Equities
Global shares steadied after U.S. President Joe Biden’s decision yesterday to bow out of the election race injected a degree of optimism into the markets, while a surprise rate cut by China’s central bank failed to give Asian markets a lift.
Wall Street’s main indexes opened higher as investors weighed the odds of a second term for Republican nominee Donald Trump in the November election after Biden exited and endorsed Kamala Harris’s candidacy.
The Dow Jones Industrial Average rose 0.32 per cent to 40,414.49, the S&P 500 gained 0.72 per cent to 5,544.54, and the Nasdaq Composite added 1.11 per cent to reach 17,923.65.
The Toronto Stock Exchange’s S&P/TSX composite index was up 0.23 per cent to 22,742.56 at the bell, tracking the upbeat mood on Wall Street.
On Wall Street, markets are getting results from Verizon Communications and Cleveland-Cliffs.
“There’s been a bit of a unwinding of that ‘Trump trade’, those fears we saw last week that lifted the dollar and pressurized European stocks at least and an overall, a bit of an upbeat mood on the news,” Fiona Cincotta, senior market analyst at City Index, said.
Overseas, the pan-European STOXX 600 was up 1.15 per cent in morning trading. Britain’s FTSE 100 advanced 0.94 per cent, Germany’s DAX rose 1.41 per cent and France’s CAC 40 added 1.41 per cent.
In Asia, Japan’s Nikkei closed 1.6 per cent lower, while Hong Kong’s Hang Seng gained 1.25 per cent.
Commodities
Oil prices eased as investors watched for more signs that the U.S. might start to cut interest rates as soon as September.
Brent crude futures fell 0.5 per cent to US$82.18 a barrel, and U.S. West Texas Intermediate crude futures slid 0.5 per cent to US$79.62.
“Since the June [Federal Reserve] meeting, inflation and labour market data have signalled that disinflation and labor market rebalancing are in place, which we expect will allow the Fed to begin its interest rate cutting cycle in September,” ANZ Research said in a note.
In other commodities, gold prices drifted higher on Monday as the dollar eased, with investors turning to bullion as a hedge against an uncertain political and market outlook.
Spot gold rose 0.2 per cent to US$2,404.95 an ounce, while U.S. gold futures gained 0.3 per cent to US$2,406.50.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 72.60 US cents to 73.14 US cents in early trading. The Canadian dollar was down about 0.68 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, was down 0.06 per cent to 104.33.
The euro advanced 0.06 per cent to US$1.0879. The British pound gained 0.02 per cent to US$1.2916.
In bonds, the yield on the U.S. 10-year note was last down at 4.206 per cent.
Other corporate news
Air Canada has cut its full-year core profit forecast, as overcapacity in certain markets and competition on international routes impacted its pricing power. The airline now expects its 2024 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to be in the range of $3.1-billion to $3.4-billion, compared with its previous forecast of $3.7-billion to $4.2-billion.
Sleep Country Canada Holdings has agreed to be acquired by a unit of insurer Fairfax Financial in a deal valued at $1.7-billion. The acquisition price of $35 per share marks a 28-per-cent premium to Sleep Country’s last close.
A&W Revenue Royalties Income Fund and A&W Food Services of Canada Inc. have announced a strategic combination that will create a new publicly traded company. Income fund unitholders will receive either one share in the combined company that will pay quarterly dividends or $37 per unit.
With Reuters and The Canadian Press