Equities
Global markets were mixed as investors considered an expected U.S. Federal Reserve interest rate cut next week and a European Central Bank rate reduction announced this morning.
Wall Street’s main indexes were subdued at the open a hot producer prices reading kept a smaller 25-basis point interest rate cut by the Fed firmly on the table.
The Dow Jones Industrial Average was flat at 40,862.11, the S&P 500 rose 0.06 per cent to 5,557.48, and the Nasdaq Composite gained 0.11 per cent to 17,413.889, at the bell.
The Toronto Stock Exchange’s S&P/TSX composite index opened 0.36 per cent higher at 23,295.21, boosted by gains in mining and energy shares.
In Canada, investors are getting results from Empire Co. Ltd. and Transat AT Inc. Sobeys parent company Empire has reported a modest increase in sales in its first quarter, while profits were impacted by the sale of gas stations and a recent decision to slow the pace of its e-commerce expansion.
On Wall Street, markets are watching earnings from Kroger Co. and Adobe Inc.
“We are now comfortable with calling a [Fed 25-basis-point] cut for September, but also open-minded to the idea that a weak U.S. payrolls report on 4 October would fully open up a 50bp cut in the November FOMC meeting,” said Chris Weston, head of research at Pepperstone.
Overseas, the pan-European STOXX 600 was up 0.82 per cent in morning trading. Britain’s FTSE 100 rose 0.67 per cent, Germany’s DAX gained 0.79 per cent and France’s CAC 40 advanced 0.64 per cent.
In Asia, Japan’s Nikkei closed 3.41 per cent higher, while Hong Kong’s Hang Seng gained 0.77 per cent.
Commodities
Oil prices rose more than 1 per cent, extending a rebound spurred by concern over Hurricane Francine’s impact on U.S. output, though a gloomy demand outlook capped gains.
Brent crude futures rose 1.3 per cent to $71.55 a barrel, and West Texas Intermediate (WTI) futures gained 1.5 per cent to $68.31.
Nearly 39 per cent of oil and almost half of natural gas production in the U.S. Gulf of Mexico was offline yesterday, the offshore regulator said.
“The region accounts for about 15 per cent of U.S. oil production, with any disruptions in production likely to tighten supplies in the near term,” said Priyanka Sachdeva, senior market analyst at Singapore-based brokerage Phillip Nova.
In other commodities, spot gold was up 0.1 per cent at U.S.$2,513.78 an ounce. U.S. gold futures were steady at US$2,542.90.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 73.58 US cents to 73.73 US cents in early trading. The Canadian dollar was up about 1.19 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, slid 0.12 per cent to 101.63.
The euro rose 0.24 per cent to US$1.1040. The British pound advanced 0.16 per cent to US$1.3058.
In bonds, the yield on the U.S. 10-year note was last up at 3.662 per cent.
Other corporate news
Royal Bank of Canada said has announced that interim finance chief Katherine Gibson would take over the role on a permanent basis, effective immediately.
U.S. retailer Kroger has beat Wall Street estimates for quarterly same-store sales, as its efforts to offer freshly sourced groceries at lower prices helped pull in customers looking to save dollars.
Economic news
ECB Monetary Policy Meeting. The European Central Bank cut its interest rate by 25 basis points to 3.5 per cent in its second reduction this year.
(8:30 a.m. ET) Canada’s national balance sheet and financial flow accounts for Q2.
(8:30 a.m. ET) Canadian building permits for July. Estimate is a rise of 10 per cent month-over-month.
(8:30 a.m. ET) U.S. initial jobless claims for week for Sept. 7, which rose 2,000 to a seasonally adjusted 230,000, compared with estimate of 232,000, up 5,000 from the previous week.
(8:30 a.m. ET) U.S. PPI for August, which increased slightly more than expected amid higher costs for services, but the trend remained consistent with subsiding inflation.
(12 p.m. ET) U.S. flow of funds for Q2.
(2 p.m. ET) U.S. budget balance for August.
With Reuters and The Canadian Press