Equities
Stocks rose on Monday at the start of a week packed with earnings and central bank meetings that could signal rate cuts to come.
Wall Street’s main indexes opened on a strong note. The Dow Jones Industrial Average rose 0.19 per cent at the open to 40,665.71, the S&P 500 opened higher by 0.32 per cent at 5,476.55, while the Nasdaq Composite gained 0.5 per cent to 17,444.39 at the opening bell.
The Toronto Stock Exchange’s S&P/TSX Composite Index was up 0.2 per cent at 22,859.89 just after the opening bell, led by gains in energy shares.
On Wall Street, markets were taking in earnings from fast food giant McDonald’s, which reported weak quarterly results on Monday, and gearing up for earnings from big tech names Microsoft, Apple, Amazon.com and Meta Platforms later in the week.
Traders are wagering that the U.S. Federal Reserve will lay the groundwork for a September rate cut at its policy meeting on Wednesday, with futures fully priced for a quarter-point easing in September.
“U.S. markets are approaching crunch time. This coming week could very well set the path for markets over the near term,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
Investors are less sure whether the Bank of England will ease at its meeting on Thursday, with futures showing a 51 per cent probability of a cut to 5 per cent.
Overseas, the pan-European STOXX 600 was up 0.13 per cent and Britain’s FTSE 100 gained 0.53 per cent. Germany’s DAX was 0.20 per cent and France’s CAC 40 was was down 0.81 per cent.
In Asia, Japan’s Nikkei rose 2.13 per cent, while Hong Kong’s Hang Seng closed 1.28 per cent higher.
The Bank of Japan also meets Wednesday and markets imply a 70 per cent chance it will hike rates by 10 basis points to 0.2 per cent, with some chance it could move by 15 basis points.
Commodities
Oil prices were stable as fears of a widening conflict in the Middle East after a rocket strike in the Israeli-occupied Golan Heights put a floor under last week’s price losses.
Brent crude futures lost 0.41 per cent to US$80.80 a barrel, while West Texas Intermediate (WTI) crude futures fell by 0.38 per cent to US$76.87.
The Brent and WTI benchmarks lost 1.8 per cent and 3.7 per cent respectively last week on sagging Chinese demand and hopes of a Gaza ceasefire agreement.
“A rather muted opening greets oil prices after Middle East tension is back on the menu due to a reported Hezbollah attack,” said PVM analyst John Evans, referring to the strike on Golan Heights.
In other commodities, spot gold rose 0.3 per cent to US$2,391.87 per ounce.
Currencies and bonds
The Canadian dollar was flat against its U.S. dollar counterpart.
The day range on the loonie was 72.22 US cents to 72.38 US cents. The Canadian dollar was down about 0.75 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.29 per cent to 104.62.
The euro fell 0.36 per cent to US$1.0819. The British pound declined 0.14 per cent to US$1.2849.
In bonds, the yield on the U.S. 10-year note was flat at 4.171 per cent.
Economic news
China industrial profits
With Reuters and The Canadian Press