Equities
The global markets recovery continued as stocks headed for their best week since last November, after encouraging U.S. economic data soothed fears of an imminent recession. in a rapid shift from a rout last week that kept investors wary of a bumpy ride ahead.
But Wall Street’s main indexes opened lower after a weak housing starts report dampened sentiment. The Dow Jones Industrial Average fell 0.08 per cent to 40,528.86, the S&P 500 slid 0.23 per cent to 5,530.5, and the Nasdaq Composite dropped 0.44 per cent to 17,516.404 at the bell.
The Toronto Stock Exchange’s S&P/TSX composite index also opened lower, down 0.18 per cent at 22,991.94, as energy stocks fell, tracking declining crude prices, while gains in mining shares kept overall losses in check.
The so-called soft landing scenario may not hold, cautioned Aviva Investors portfolio manager Sotirios Nakos, who suspected markets could keep swinging with every new economic data point. “The market went very quickly to price more negative data and now what we’re primarily seeing is the rapid unwinding of that,” he said.
Overseas, the pan-European STOXX 600 was up 0.15 per cent in morning trading. Britain’s FTSE 100 gave back 0.55 per cent, Germany’s DAX gained 0.49 per cent and France’s CAC 40 added 0.14 per cent.
In Asia, Japan’s Nikkei closed 3.64 per cent higher, notching its best week in more than four years, while Hong Kong’s Hang Seng rose 1.88 per cent.
Commodities
Oil prices fell by more than US$2 and were on track for a weekly decline, with Brent slipping below $80 a barrel after a string of dismal indicators for July from China overshadowed geopolitical risks.
Brent crude futures were down 2.7 per cent to US$78.85 a barrel, while West Texas Intermediate (WTI) crude futures fell 3.06 per cent to US$75.77.
“The oil market is struggling to retain its recently recaptured $80/bbl floor as the recent string of weak macroeconomic indicators reassert their downward pressure while geopolitical concerns appear to fade into the background,” said Harry Tchilinguirian, head of research at Onyx Capital Group.
In other commodities, gold prices rose to an all-time high as a mix of factors ranging from a weaker U.S. dollar, growing expectations for a U.S. interest-rate cut in September to geopolitical tensions in the Middle East bolstered demand for bullion.
Spot gold was up 1.3 per cent to US$2,487.66 an ounce, and U.S. gold futures rose 1.4 per cent to US$2,526.40.
Currencies and bonds
The Canadian dollar was little changed against its U.S. dollar counterpart.
The day range on the loonie was 72.80 US cents to 72.93 US cents in early trading. The Canadian dollar was up about 0.04 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, declined 0.27 per cent to 102.69.
The euro gained 0.17 per cent to US$1.099. The British pound advanced 0.4 per cent to US$1.2901.
In bonds, the yield on the U.S. 10-year note was last down at 3.879 per cent.
Other corporate news
Cannabis firm Canopy Growth says its CEO, David Klein, will retire at the end of the company’s current fiscal year on March 31, 2025.
Economic news
Euro area trade surplus for June
British retail sales for July
8:15 a.m. ET: Canada housing starts for July, which climbed to an annualized rate of 16 per cent from June.
8:30 a.m. ET: Canada manufacturing sales and new orders for June
8:30 a.m. ET: Canada international securities transactions inflows and outflows for June
8:30 a.m. ET: U.S. housing starts and building permits for July
10 a.m. ET: University of Michigan Consumer Sentiment Index for August
The week ahead
Central bankers from around the globe gather in Jackson Hole, Wyo., from Thursday for the U.S. Federal Reserves’s annual conference to chart the way forward for monetary policy. In focus this year are labour markets - a shift away from last year’s inflation theme.
With Reuters and The Canadian Press