Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.
Equities
Canada’s main stock index jumped at the opening bell Thursday, helped by gains in the energy sector on the back of higher crude prices. On Wall Street, key indexes were positive after hawkish signals from the Federal Reserve.
At 9:33 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 170.28 points, or 0.83 per cent, at 20,766.17.
In the U.S., the Dow Jones Industrial Average rose 93.66 points, or 0.27 per cent, at the open to 34,261.75.
The S&P 500 opened higher by 30.65 points, or 0.70 per cent, at 4,380.58, while the Nasdaq Composite gained 168.87 points, or 1.25 per cent, to 13,710.99 at the opening bell.
On Wednesday, the Fed indicated that it was likely to hike interest rates in March and reaffirmed plans to end its bond purchases that month. Fed chair Jerome Powell said the central bank can manage tightening without putting growth and employment gains at risk.
“The Fed is going to try to convince markets that they have a plan that is hawkish enough that will fight inflation but not cripple markets and create a de-risking environment,” OANDA senior analyst Ed Moya said.
“The Fed may raise rates at every other meeting, with the balance sheet runoff starting in May or June. Powell made sure not to make any strong commitments on the course or rate increases or how they will shrink their holdings.”
In this country, the Bank of Canada also set the stage for a March rate hike, surprising some economists who had expected the central bank to begin raising borrowing costs starting with Wednesday’s policy meeting.
On the corporate side, Canadian investors got earnings from Rogers Communications Inc. ahead of the start of trading. CP Rail reports earnings after the close of trading.
Rogers reported total revenue of $3.92-billion in the most recent quarter, topping the average analyst estimate of $3.85-billion, according to Refinitiv IBES data. Shares were up more than 1 per cent in early trading.
On Wall Street, Apple Inc. delivers its latest quarter numbers after the close of trading.
Tesla Inc. shares were down modestly in premarket trading after the company forecast annual sales would comfortably grow by more than 50 per cent year-over-year in 2022 despite supply chain issues. In the most recent quarter, Tesla reported revenue of $17.72-billion in the fourth quarter, up from US$10.74 billion a year earlier. Analysts had expected the electric-vehicle maker to report revenue of US$16.57 billion, according to IBES data from Refinitiv. Tesla also said it would not introduce new models this year.
Overseas, the pan-European STOXX 600 was up 0.18 per cent by midday. Britain’s FTSE 10 rose 0.85 per cent. Germany’s DAX was flat. France’s CAC 40 edged up 0.17 per cent.
In Asia, Japan’s Nikkei closed down 3.11 per cent. Hong Kong’s Hang Seng lost 1.99 per cent.
Commodities
Crude prices steadied alongside broader markets as geopolitical concerns offset the impact of a higher U.S. dollar following the Fed’s latest policy announcement.
The day range on Brent is US$87.79 to US$88.84. The range on West Texas Intermediate is US$86.34 to US$87.52. Both benchmarks added 2 per cent on Wednesday, with Brent cracking US$90 a barrel for the first time since 2014. Both were down by more than 1 per cent early Thursday before rebounding in the predawn period.
“Energy traders are anticipating higher energy prices on potential geopolitical risks and as OPEC+ will stick to their plan to deliver another modest increase to production at next week’s meeting,” OANDA’s Ed Moya said in a note.
Also on Wednesday, the U.S. Energy Information Administration said crude inventories rose by 2.4 million barrels last week to 416.2 million barrels. Analysts had been looking for a decline. Gasoline stockpiles rose by 1.3 million barrels last week.
In other commodities, gold prices were lower, weighed down by a stronger greenback.
Spot gold dropped 0.3 per cent to US$1,812.87 per ounce, after closing 1.6 per cent lower on Wednesday in its worst session since Nov. 22. U.S. gold futures fell 0.9 per cent to US$1,813.40.
Currencies
The Canadian dollar was down modestly after the Bank of Canada held rates steady and the U.S. dollar advanced after the Fed indicated rate hikes could start as early as March.
The day range on the loonie is 78.56 US cents to 79.02 US cents.
There were no major Canadian economic releases on Thursday’s calendar. On Wednesday, the Bank of Canada surprised some market participants by holding rates steady. Many had expected the bank to deliver its first rate increase since 2018.
“Policy makers all but signaled lift off in March, however, with economic slack fully absorbed, and that yesterday’s meeting signaled a significant shift in monetary policy, with a series of rate hikes perhaps to follow,” Shaun Osborne, chief FX strategist with Scotiabank, said.
On world markets, the U.S. dollar index held at its highest levels since mid-December in London trading, while the euro remained at two-month lows of US$1.11930, according to figures from Reuters.
The Australian dollar, often seen as a proxy for risk sentiment, was last down about 0.5 per cent at US$0.7077, having fallen to as low as $0.7064, while the New Zealand dollar fell 0.7 per cent to US$0.6597, a nearly 15-month low.
In bonds, the yield on the U.S. 10-year note was down slightly at 1.841 per cent in the early predawn period.
More company news
Uber Technologies Inc. has signed an agreement with a private sector union that will provide representation to Canadian drivers and couriers, but does not unionize workers. The San Francisco, Calif-based tech giant said Thursday that it is partnering with United Food and Commercial Workers Canada, a union representing at least 250,000 workers at companies including Maple Leaf Foods Inc., Loblaw Companies Ltd. and Molson Coors Beverage Co. The partnership will give UFCW Canada the ability to provide representation to about 100,000 Canadian drivers and couriers, if requested by the workers, when they are facing account deactivations and other disputes with Uber.
Billionaire investor William Ackman has built a new stake in streaming service Netflix Inc worth more than $1-billion since its stock price tumbled starting last Thursday. Ackman told investors that his hedge fund, Pershing Square Capital Management, started buying on Friday and now owns more than 3.1 million shares in Netflix, making Pershing Square a top 20 shareholder.
McDonald’s Corp missed revenue expectations on Thursday, as dismal sales in its more than 4,500 restaurants in Australia and China due to pandemic-related curbs ate into gains from growth in the United States in the fourth quarter. Sales gains in Italy, Germany, France the U.S. and the U.K. boosted total revenue by 13% to $6.01-billion in the three months ended Dec. 31, but still the company missed market expectation of $6.03-billion, according to Refinitiv data.
Mastercard Inc reported a 33% jump in fourth-quarter profit on Thursday, as a rise in domestic spending and growth in cross-border volumes following an uptick in international travel drove higher transactions through its cards. The company’s profit rose to $2.4-billion, or $2.41 per share, for the three months ended Dec. 31, from $1.8-billion, or $1.78 per share a year earlier.
Economic news
(8:30 a.m. ET) U.S. initial jobless claims for week of Jan. 22.
(8:30 a.m. ET) U.S. real GDP and GDP deflator for Q4.
(8:30 a.m. ET) U.S. durable orders for December.
(10 a.m. ET) U.S. pending home sales for December.
With Reuters and The Canadian Press