Equities
Global markets were mixed after a weeks-long rebound toward record highs, as investors hoped for clearer clues on Friday from the Federal Reserve on the size of future interest rate cuts.
Wall Street’s main indexes opened marginally higher, as investors awaited the release of the updated U.S. payrolls data and the minutes from the Federal Reserve’s July policy meeting.
The Dow Jones Industrial Average rose 0.11 per cent to 40,881.03, the S&P 500 advanced 0.11 per cent to 5,603.09, and the Nasdaq Composite gained 0.13 per cent to 17,840.512 at the bell.
The Toronto Stock Exchange’s S&P/TSX composite index opened 0.21 per cent higher at 23,086.52, with energy stocks leading broader gains.
TSX futures were up as crude prices ticked higher, a day after mild inflation numbers for July spurred hopes of another Bank of Canada rate cut next month.
On Wall Street, markets are watching earnings from Analog Devices Inc., Macy’s Inc., Target Corp. and TJX Companies Inc.
In Canada, investors are looking ahead to bank earnings season, starting with the release of Toronto-Dominion Bank’s third-quarter results tomorrow. As The Globe’s James Bradshaw reports, the spotlight is on the health of the banks’ loan books, with the pace of growth likely to be sluggish and investors watching for signs that the risk of defaults is rising.
Fed meeting minutes released today are expected to reinforce a dovish stance ahead of a speech from the central bank’s chairman Jerome Powell at the Jackson Hole symposium on Friday.
“If we get a scenario where the Fed are cutting, inflation is falling and employment continues to rise, it really does start to look like a Goldilocks scenario,” said Ross Yarrow, U.S. equities managing director at investment bank Baird.
“So I think the rebound in equities and their prospects from here are actually pretty good,” Yarrow said.
Overseas, the pan-European STOXX 600 was up 0.35 per cent in morning trading. Britain’s FTSE 100 rose 0.21 per cent, Germany’s DAX advanced 0.57 per cent and France’s CAC 40 gained 0.49 per cent.
In Asia, Japan’s Nikkei closed 0.29 per cent lower, while Hong Kong’s Hang Seng fell 0.69 per cent.
Commodities
Oil prices advanced after a run of declines that have pushed Brent down to almost US$77, driven by stubborn fears over Chinese demand and diminishing concerns about conflict spreading in the Middle East.
Brent crude futures rose 0.6 per cent to US$77.70 a barrel and West Texas Intermediate (WTI) crude was at US$73.64, up 0.6 per cent.
“While weaker Chinese demand has been well reported, refinery margins around the globe have been under pressure for much of August, suggesting that these demand concerns are not isolated to just China,” ING commodities strategists said.
In other commodities, spot gold was down 0.1 per cent at US$2,510.15 an ounce, after hitting an all-time high of US$2,531.60 yesterday. U.S. gold futures fell 0.1 per cent to US$2,548.50.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 73.10 US cents to 73.58 US cents in early trading. The Canadian dollar was up about 1.55 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, declined 0.03 per cent to 101.42.
The euro dropped 0.06 per cent to US$1.1124. The British pound rose 0.08 per cent to US$1.3044.
In bonds, the yield on the U.S. 10-year note was last up at 3.811 per cent.
Other corporate news
Ford Motor Co. Ltd. is reshuffling its electric vehicle plans, killing its three-row SUV and delaying its next-generation pickup while adding a new pickup and van to its future lineup as it adjusts to slower-than-expected EV growth.
Walmart, the biggest shareholder of Chinese e-commerce firm JD.com, has sold its entire stake for about US$3.74-billion, a person familiar with the matter told Reuters, exiting an eight-year investment to focus on its own operations in China.
Target has raised its annual profit forecast and beat Wall Street expectations for second-quarter comparable sales as more Americans shopped at its stores drawn by low priced groceries and essentials.
Macy’s has missed market expectations for quarterly revenue as lingering weakness in U.S. consumer spending hurt demand for big-ticket, non-essential goods.
Off-price retailer TJX has raised annual profit forecast, banking on gains from easing costs and steady demand for its low-price apparel and accessories.
Economic news
Japan trade deficit
(8:30 a.m. ET) Canada’s industrial product and raw materials price indexes for July. Estimates are month-over-month declines of 0.5 per cent and 1.0 per cent, respectively.
(10 a.m. ET) U.S. preliminary release of annual payrolls benchmark revision.
(2 p.m. ET) U.S. Fed minutes released from July 30-31 session.
With Reuters and The Canadian Press