Equities
World stocks advanced after China unveiled stimulus measures to support its economy, sending Asian and European shares higher and triggering a bounce in commodity prices.
Wall Street’s main indexes opened slightly higher, as investors scoured for clues on what the Federal Reserve’s next policy move might be.
The Dow Jones Industrial Average rose 0.26 per cent to 42,234.99, the S&P 500 gained 0.16 per cent to 5,727.66, an the Nasdaq Composite advanced 0.4 per cent to 18,046.442 at the bell.
The Toronto Stock Exchange’s S&P/TSX composite index opened 0.44 per cent higher at 23,999.93 on gains in energy and mining shares.
On Wall Street, markets are watching earnings from AutoZone Inc.
“Investor positioning [in China stocks] is underweight and stimulus measures would set up a positive backdrop over the coming months,” said Jefferies economist Mohit Kumar.
“However, we do not think that it’s a bazooka that would fundamentally change our outlook for China yet. More targeted measures supporting property and infrastructure would be required for a shift in our views.”
Overseas, the pan-European STOXX 600 was up 0.45 per cent in morning trading. Britain’s FTSE 100 rose 0.18 per cent, Germany’s DAX advanced 0.35 per cent and France’s CAC 40 climbed 1.1 per cent.
In Asia, Japan’s Nikkei closed 0.57 per cent higher, while Hong Kong’s Hang Seng surged 4.13 per cent.
Commodities
Oil prices rose on news of monetary stimulus from top importer China and concerns that tensions in the Middle East could hit regional supply, while a major hurricane loomed over the United States, the world’s biggest crude producer.
Brent crude futures for November were up 2.4 per cent at US$75.66 a barrel, and West Texas Intermediate (WTI) crude futures for November rose 2.6 per cent to US$72.21.
“WTI has gained this morning after China moved to lower its key lending rates. The crude oil market has been looking desperately towards Chinese authorities for further easing measures to counter the economic slowdown,” said Tony Sycamore, market analyst at IG.
“Today’s announcement will go some way to removing downside risks to the crude oil price.”
In other commodities, spot gold rose 0.2 per cent to US$2,633.25 an ounce, having hit a record high of US$2,639.95 earlier in the session. U.S. gold futures gained 0.2 per cent to US$2,657.90.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 73.83 US cents to 74.08 US cents in early trading. The Canadian dollar was down about 0.42 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, slipped 0.1 per cent to 100.75.
The euro gained 0.27 per cent to US$1.1143. The British pound rose 0.28 per cent to US$1.3386.
In bonds, the yield on the U.S. 10-year note was last up at 3.802 per cent.
Other corporate news
The U.S. Commodity Futures Trading Commission has ordered the Canadian Imperial Bank of Commerce to pay US$30-million for recordkeeping and supervision failures, the agency said in a statement.
Separately, the U.S. Securities and Exchange Commission announced 11 broker-dealers and investment advisers – including CIBC World Markets and Canaccord Genuity – have agreed to pay fines of more than US$88-million to resolve allegations they failed to keep proper records of electronic communications.
Economic news
Japan PMI
Germany business climate, which fell for a fourth straight month in September and by more than expected, adding to signs that the euro zone’s biggest economy may have tipped into recession.
(8:30 a.m. ET) Canadian manufacturing sales for August.
(9 a.m. ET) U.S. S&P CoreLogic Case-Shiller Home Price Index (20 city) for July. The Street expects an increase of 0.4 per cent from June and up 6.0 per cent year-over-year.
(9 a.m. ET) U.S. FHFA House Price Index for July, which edged up, but the overall trend is slowing as supply improves. It rose 0.1 per cent from June, compared with a forecasted 0.2-per-cent increase, and 4.5 per cent year-over-year as expected.
(10 a.m. ET) U.S. Conference Board Consumer Confidence Index for September, which fell as job concerns rose significantly.
(1:10 p.m. ET) Bank of Canada Governor Tiff Macklem holds a fireside chat at the IIF/CBA Canada Forum in Toronto.
With Reuters and The Canadian Press