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Equities
Canada’s main stock index gained at Tuesday’s open, helped by strength in mining shares. On Wall Street, key indexes also extended recent gains with earnings taking mainstage.
At 9:33 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 65.58 points, or 0.31 per cent, at 21,163.87.
In the U.S., the Dow Jones Industrial Average rose 19.6 points, or 0.06 per cent, at the open to 35151.47.
The S&P 500 rose 4.0 points, or 0.09 per cent, at the open to 4519.57, while the Nasdaq Composite rose 37.6 points, or 0.26 per cent, to 14277.434 at the opening bell.
“A part of the rally is explained by dip-buying from those who believe that the stocks hit a bottom as a result of an aggressive hawkish Fed pricing across the market and a part of it is explained by some short covering, which got traders to buy back the shares that they initially bet against to close their positions,” Swissquote senior analyst Ipek Ozkardeskaya said.
Earnings will continue to be key for investors on Tuesday with Google-parent Alphabet, General Motors and Starbucks all scheduled to report after the close of trading.
Ahead of the open, U.S. energy giant Exxon Mobil Corp on reported a fourth-quarter profit of US$8.87-billion, the biggest in seven years on the back for strong prices.
In this country, Imperial Oil, which is majority owned by Exxon, posted net income of $813-million, or $1.18 per share, in the quarter ended Dec. 31. That compared to a loss of $1.15-billion, or $1.56 per share, a year earlier The Calgary-based oil company hiked its quarterly dividend by 26 per cent to 34 cents a share, up from 27 cents a share.
Canadian investors will also got readings on how the Canadian economy was performing at the end of 2021. Statistics Canada says GDP grew by 0.6 per cent in November, before the spread of the Omicron variant led to closures in some regions. For December, the agency says its early estimate suggests growth was unchanged.
“November saw a solid advance in GDP, but by December Omicron had already stalled the recovery,” CIBC senior economist Andrew Grantham said.
“The stronger than expected November print leaves growth in Q4 as a whole tracking around 6 1/2%, even with the flat December. That’s slightly ahead of the 5.8% estimated by the Bank of Canada in its MPR, and further justifies its hawkish stand on interest rates even with the expectation that Omicron-related restrictions will have resulted in a sluggish Q1.”
Overseas, the pan-European STOXX 600 was up 1.38 per cent by midday. Britain’s FTSE 100 gained 1.07 per cent in morning trading. Germany’s DAX and France’s CAC 40 advanced 1.21 per cent and 1.40 per cent, respectively.
In Asia, Japan’s Nikkei finished 0.28-per-cent higher. Markets in China and Hong Kong were closed.
Commodities
Crude prices pulled back but remained near recent highs as traders await U.S. inventory numbers and the latest OPEC+ meeting later in the week.
The day range on Brent is US$88.13 to US$89.70. The range on West Texas Intermediate is US$87.03 to US$88.57.
“The oil market is likely to remain very tight given the geopolitical risks and slower production increases despite high crude prices as oil giants focus on clean energy transition,” OANDA senior analyst Ed Moya said in a note.
Later in the session, markets will get the first of two weekly U.S. inventory reports, with figures from the American Petroleum Institute. More official numbers follow Wednesday morning from the U.S. Energy Information Administration.
Analysts expect crude stocks to have risen by 1.8 million barrels.
Traders are awaiting Wednesday’s meeting of the OPEC+ group. Members are expected to maintain its current pace of gradual hikes.
“While on the face of it this comes across as a measure which should help keep a lid on prices, the inability of a number of oil producers to meet their existing targets renders it meaningless,” Michael Hewson, chief market analyst with CMC Markets U.K., said.
“With inventories already on the low side and many producers already at capacity on their ability to supply, this week’s OPEC announcement is likely to be about as much use as an unrealistic sales target.”
In other commodities, gold prices edged higher.
Spot gold rose 0.3 per cent to US$1,802.51 per ounce by early Tuesday morning. U.S. gold futures also rose 0.4 per cent to US$1,804.20.
Currencies
The Canadian dollar was firmer alongside other risk-sensitive currencies while its U.S. counterpart slid.
The day range on the loonie is 78.59 US cents to 79.02 US cents.
“The CAD is benefitting from the generally softer USD and an improvement in risk sentiment for the most part,” Shaun Osborne, chief FX strategist with Scotiabank, said.
The loonie was little changed in the immediate wake of the latest GDP figures.
On world markets, the U.S. dollar index, which hit a 19-month high last week, was down 0.3 per cent early Tuesday at 96.395 after declining on Monday.
The U.S. dollar also fell against the Japanese yen, with the pair at 114.990, according to figures from Reuters.
The Australian dollar fell overnight after the that country’s central bank suggested it was in no rush to begin raising interest rates, but later firmed amid improve global risk sentiment. The Australian dollar was up 0.3 per cent on the day at US$0.70895 in early European trading.
In bonds, the yield on the U.S. 10-year note was lower in the early predawn period at 1.755 per cent.
More company news
An antitrust review of Microsoft Corp’s proposed acquisition of Activision Blizzard Inc will be handled by the U.S. Federal Trade Commission (FTC), Bloomberg News reported late Monday, citing a person familiar with the matter. The FTC will oversee the investigation into whether the takeover will harm competition, the report said.
Logistics giant United Parcel Service Inc reported a 35% rise in quarterly profit on Tuesday, boosted by higher shipping rates and demand from more profitable e-commerce customers. The company’s fourth-quarter adjusted net income rose to a record $3.15-billion, or $3.59 per share, from $2.33-billion, or $2.66 per share, a year earlier. UPS also said it expects to deliver its 2023 consolidated revenue and operating margin targets one year early.
Tesla Inc will recall 53,822 U.S. vehicles with the company’s Full Self-Driving (Beta) software that may allow some models to conduct “rolling stops” and not come to a complete stop at some intersections posing a safety risk. The National Highway Traffic Safety Administration (NHTSA) said the recall covers some 2016-2022 Model S and Model X, 2017-2022 Model 3, and 2020-2022 Model Y vehicles. NHTSA said the feature may allow vehicles to travel through an all-way stop intersection without first coming to a stop.
Toronto-based Spin Master released preliminary revenue figures early Tuesday showing fourth-quarter revenue rose 26.5 per cent to $620.5-million. Analysts had forecast revenue for the period of $531.5-million. “We delivered very strong revenue growth for the fourth quarter and full year 2021, showcasing the power of our three creative centres comprising Toys, Entertainment and Digital Games,” Spin Master CEO Max Rangel said in a statement.
Economic news
(8:30 a.m. ET) Canada’s monthly GDP for November.
(9:30 a.m. ET) Canada’s Markit Manufacturing PMI for January.
(9:45 a.m. ET) U.S. Markit Manufacturing PMI for January.
(10 a.m. ET) U.S. ISM Manufacturing PMI for January.
(10 a.m. ET) U.S. construction spending for December.
(10 a.m. ET) U.S. Job Openings & Labor Turnover Survey for December.
With Reuters and The Canadian Press