Equities
Japanese stocks rallied amid mixed markets ahead of a slew of data this week, including U.S. inflation numbers tomorrow that could clarify the Federal Reserve’s policy outlook after volatile markets last week.
Wall Street opened higher after producer prices data showed abating inflation pressures, keeping the Fed on track to cut rates next month.
The Dow Jones Industrial Average rose 0.22 per cent to 39,445.27, the S&P 500 advanced 0.61 per cent to 5,376.98, and the Nasdaq Composite gained 0.98 per cent to 16,944.735 at the bell.
The Toronto Stock Exchange’s S&P/TSX composite index opened 0.2 per cent higher at 22,443.62 as declines in commodity-linked shares limited gains.
In Canada, investors are getting results from Franco-Nevada Corp., Northwest Healthcare Properties REIT, Cargojet Inc., Minto Apartment REIT Algoma Streel Group Inc. and HudBay Minerals Inc.
On Wall Street, markets are watching earnings from Home Depot Inc.
The retailer has forecast a decline in annual profit and a bigger drop in its annual comparable sales, as hopes of a recovery in demand for home improvement projects fall due to higher borrowing costs.
“While aftershocks might reveal vulnerabilities, we continue to view recent volatility as being an equivalent of a ‘heart palpitation’ not a ‘cardiac arrest’,” Viktor Shvets, head of global desk strategy at Macquarie Capital said in a note. “We also maintain that the nervousness about a U.S. slowdown is overdone.”
Overseas, the pan-European STOXX 600 was 0.17 per cent higher in morning trading. Britain’s FTSE 100 gained 0.12 per cent, Germany’s DAX added 0.16 per cent and France’s CAC 40 gave back 0.07 per cent.
In Asia, Japan’s Nikkei ended the session 3.45 per cent higher, after being closed yesterday for a holiday, while Hong Kong’s Hang Seng rose 0.36 per cent.
Analysts’ forecast returns, recommendations and yields for all stocks in the S&P/TSX Composite Index
Commodities
Oil prices dipped after rising for five consecutive sessions, as markets refocused on concerns about demand after OPEC cut its forecast for demand growth in 2024 due to softer expectations in China.
Brent crude futures were down 1.2 per cent to US$81.32 a barrel in early trading, while West Texas Intermediate (WTI) crude futures slipped to US$79.13 a barrel, down 1.2 per cent.
“Demand concerns for crude oil remain on the table,” said Yeap Jun Rong, market strategist at IG, adding that reservations lingered ahead of upcoming U.S. inflation data.
In other commodities, gold prices eased as traders locked in profits after a recent rally.
Spot gold was down 0.2 per cent at US$2,468.33 an ounce, after hitting its highest level since Aug. 2 earlier in the session. U.S. gold futures were subdued at US$2,503.40.
Currencies and bonds
The Canadian dollar strengthened against its U.S. dollar counterpart.
The day range on the loonie was 72.73 US cents to 72.86 US cents in early trading. The Canadian dollar was down about 0.45 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, inched lower to 103.06.
The euro advanced 0.11 per cent to US$1.0945. The British pound gained 0.31 per cent to US$1.2805.
In bonds, the yield on the U.S. 10-year note was last down at 3.861 per cent ahead.
Other corporate news
Starbucks has named Chipotle Mexican Grill head Brian Niccol as its new CEO in a management shakeup as it tries to fend off pressures from activist investor Elliott Investment Management.
Economic news
Germany ZEW business expectations survey, which showed investor morale darkened more than expected in August, posting its strongest decline in two years.
British June payrolls report, which indicated pay grew at its slowest pace in nearly two years, likely reassuring the Bank of England that inflation pressures are easing, and there was a surprise drop in unemployment.
6 a.m. ET: U.S. NFIB small business economic trends survey for July.
8:30 a.m. ET: U.S. producer price index for July, which came in 0.1 per cent higher month over month, cooler than the consensus forecast of a 0.2-per-cent rise.
With Reuters and The Canadian Press