Equities
Global markets were on firmer ground, continuing to recover from the early August rout on optimism that the U.S. Federal Reserve would start to cut interest rates soon.
Wall Street’s main indexes opened higher as retail sales data for July indicated resilient consumer spending, allaying fears of an imminent recession in the world’s largest economy.
The Dow Jones Industrial Average rose 0.72 per cent to 40,295.74, the S&P 500 rose 0.84 per cent to 5,501.13, and the Nasdaq Composite gained 1.17 percent to 17,394.545 at the bell.
The Toronto Stock Exchange’s S&P/TSX composite index opened 0.74 per cent higher at 22,927.38, its highest in two weeks, led by gains in tech and consumer staples stocks.
Investors are getting earnings from Walmart Inc., Alibaba Group Holding Ltd. and Deere & Co.
Walmart has raised its sales and profit forecasts for the second time this year, as Americans kept flocking to its stores for inexpensive essentials, sending its shares up more than 7 per cent in premarket trading.
Alibaba has missed market expectations for first-quarter revenue, as the company’s domestic e-commerce sales came under pressure from cautious spending by Chinese consumers in a faltering economy.
Deere has reported a lower third-quarter profit, as high borrowing rates and plummeting farm incomes hampered demand for tractors and other farm equipment.
“The tentative rebound in risk appetite has happened surprisingly fast, so I would be cautious,” said Nordea chief market analyst Jan von Gerich.
Overseas, the pan-European STOXX 600 was up 1.05 per cent in morning trading. Britain’s FTSE 100 rose 0.86 per cent, Germany’s DAX advanced 1.38 per cent and France’s CAC 40 gained 1.11 per cent.
In Asia, Japan’s Nikkei closed 0.78 per cent higher, while Hong Kong’s Hang Seng slipped 0.025 per cent.
Commodities
Oil prices ticked up as optimism built that potential U.S. interest rate cuts will boost economic activity and fuel consumption but concerns over slower global demand curbed gains.
Brent crude futures rose 0.9 per cent to US$80.46 a barrel, recovering some of yesterday’s losses, while West Texas Intermediate (WTI) crude futures increased 1 per cent to US$77.74 a barrel.
“Economic growth and oil demand concerns continued to dominate sentiment, which was in a holding pattern after the U.S. July inflation reading on Wednesday came within expectations,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.
In other commodities, spot gold was up 0.5 per cent to US$2,460.38 an ounce, after prices fell the most since Aug. 6 yesterday. U.S. gold futures rose 0.7 per cent to US$2,497.70.
Currencies and bonds
The Canadian dollar weakened against its U.S. dollar counterpart.
The day range on the loonie was 72.78 US cents to 73.01 US cents in early trading. The Canadian dollar was down about 0.02 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, was up 0.61 per cent to 103.18.
The euro slid 0.45 per cent to US$1.0964. The British pound was flat at US$1.2826.
In bonds, the yield on the U.S. 10-year note was last up at 3.938 per cent.
Economic news
China industrial production and retail sales for July
Japan GDP for the second quarter and June industrial production
U.K. GDP for the second quarter, plus the latest services index, industrial production and trade deficit
8:30 a.m. ET: Canada wholesale trade for June
8:30 a.m. ET: Canada new motor vehicle sales for June
8:30 a.m. ET: U.S. retail sales for July, which jumped 1 per cent from June, or 0.8 per cent when adjusted for inflation. Consensus was for a 0.4-per-cent rise.
8:30 a.m. ET: U.S. initial jobless claims for last week, which dropped by 7,000. BMO forecasts an increase of 7,000.
8:30 a.m. ET: U.S. import prices for July. BMO expects a 1.5-per-cent increase from a year ago.
8:30 a.m. ET: U.S. Philadelphia Fed Index and Empire State manufacturing data
9 a.m. ET: Canada existing home sales for July, which are up 4.8 per cent from a year earlier but fell 0.7 per cent from June. BMO expected a 3-per-cent annual rise. Also, MLS Home Price Index.
9:15 a.m. ET: U.S. industrial production for July. Consensus is for a 0.2-per-cent decline.
10 a.m. ET: U.S. NAHB Housing Market Index
10 a.m. ET: U.S. business inventories
With Reuters and The Canadian Press