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Equities
Canada’s main stock index was trading higher early Wednesday on gains in the energy and tech sectors. South of the border, the tech-heavy Nasdaq was up for a fourth session helped by positive earnings from Google-parent Alphabet.
At 9:35 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 92.7 points, or 0.43 per cent, at 21,412.62.
In the U.S., the Dow Jones Industrial Average fell 27.0 points, or 0.08%, at the open to 35378.19.
The S&P 500 rose 19.9 points, or 0.44%, at the open to 4566.39, while the Nasdaq Composite rose 148.5 points, or 1.03%, to 14494.472 at the opening bell.
“The Federal Reserve (Fed) storm is coming to an end, with most hawkish expectations already factored in the asset prices, and the strong corporate earnings help equities bind up their wounds,” Swissquote senior analyst Ipek Ozkardeskaya said in an early note.
On Tuesday, St. Louis Federal Reserve President James Bullard said he backs starting to tighten U.S. monetary policy with rate hikes in March, May and June but also pushed back against the notion that the central bank should move by half a percentage point at its March meeting. He noted that markets have already started to push borrowing costs higher on their own.
Meanwhile, corporate earnings continue to play a key role, with more than a third of S&P 500 companies having reported.
Shares of Alphabet jumped by more than 7 per cent in early trading after the parent of search giant Google beat analysts’ forecasts, reporting record quarterly sales in the latest quarter. Alphabet’s sales rose 32 per cent to US$75.3-billion in the fourth quarter, for a third straight quarterly sales record and topping the average estimate of US$72-billion among financial analysts tracked by Refinitiv. The company also said it plans to undertake a 20-to-one stock split.
After the close of trading, markets will get results from Meta, formerly Facebook.
In this country, energy giant Suncor is slated to release results after the close of trading. Lightspeed also reports after the close while Montreal-based CGI released its earnings this morning. Shares were up more than 2 per cent shortly after the opening bell in Toronto.
In the latest quarter, CGI reported revenue of $3.09 billion, up 2.4 per cent year-over-year. Earnings per share came in at $1.49, up from $1.32 a year earlier. On an adjusted basis, earnings per share totalled $1.50 in the most recent quarter, ahead of the $1.45 expected by analysts.
Elsewhere, The Globe’s Susan Krashinsky Robertson reports that Canadian Tire Corp. Ltd. chair Maureen Sabia is retiring after 37 years on the company’s board of directors. The Toronto-based retailer announced on Tuesday that Ms. Sabia will retire as chairman after its annual meeting of shareholders on May 12.
Overseas, the pan-European STOXX 600 was up 0.72 per cent in morning trading. Investors are awaiting policy decisions from the Bank of England and the European Central Bank of Thursday morning. The BoE is seen raising rates while the ECB is expected to hold steady.
Britain’s FTSE 100 was up 0.78 per cent. Germany’s DAX and France’s CAC 40 gained 0.46 per cent and 0.49 per cent, respectively.
In Asia, Japan’s Nikkei ended up 1.68 per cent. Many Asian markets remain closed for the Lunar New Year holiday.
Commodities
Crude prices gained following a meeting of OPEC+ members while a decline in weekly U.S. inventories helped underpin signs of strong demand.
The day range on Brent is US$88.84 to US$89.68. The range on West Texas Intermediate is US$87.95 to US$88.80.
OPEC members and their allies met on Wednesday to discuss the group’s output plan. Markets are expecting they will stay with the current moderate pace of production increases. Reuters reported, citing sources, that the group has agreed to raise its oil output by 400,000 barrels per day in March, inline with expectations.
Later Wednesday morning traders will get weekly crude inventories from the U.S. Energy Information Administration. Earlier in the week, the American Petroleum Institute reported that U.S. crude stocks fell by 1.6 million barrels for the week ended Jan. 28.
In other commodities, spot gold gained 0.2 per cent at US$1,803.30 per ounce early Wednesday. U.S. gold futures rose 0.2 per cent to US$1,804.50.
“Gold is hovering around US$1,800 but if selling pressure returns, it could get ugly quick as momentum sellers are watching” Mr. Moya said.
Currencies
The Canadian dollar was modestly higher in early going, benefiting from improved risk sentiment and firmer crude prices, while its U.S. counterpart continued to pullback from recent highs against a group of world currencies.
The day range on the loonie is 78.74 US cents to 78.92 US cents.
This afternoon Bank of Canada Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers are scheduled to appear before the Standing Senate Committee on Banking, Trade and Commerce.
The appearances come after the central bank held interest rates steady but laid the groundwork to begin tightening starting at its next meeting in March.
“With the BoC’s latest meeting and MPR happening just last week, comments around the economy are expected to reflect last week’s messaging that the output gap has closed and interest rates will have to be raised soon in order to meet their 2-per-cent inflation target,” Elsa Lignos, global head of FX strategy with RBC, said.
On world markets, the U.S. dollar index, which weighs the greenback against a group of world currencies, fell for a third day, slipping 0.25 per cent to 96.015 early Wednesday morning.
The euro rose by 0.3 per cent versus the U.S. dollar to US$1.13050 after new figures showed euro zone inflation hit record levels last month.
Britain’s pound rose to a nine-day high against the greenback, up 0.1 per cent at US$1.3542 ahead of a Bank of England policy meeting on Thursday, according to figures from Reuters.
In bonds, the yield on the U.S. 10-year note was down slightly at 1.798 per cent in the predawn period.
More company news
General Motors Co said it will spend more than the US$35-billion previously planned through 2025 to speed up launches of new electric vehicles, and noted that investments in technology will take priority over richer profits next year. GM said it expects 2022 operating profit of US$13-billion to US$15-billion, in line with a record 2021 operating profit of US$14.3-billion, even though vehicle production is expected to increase as semiconductor supplies improve and pricing power remains strong. The results were released after Tuesday’s close.
Advanced Micro Devices forecast full-year revenue above expectations, as it looks to overcome global supply snags to meet strong demand for chips used in gaming consoles and data center servers. For the full year 2022, AMD expects revenue to be about US$21.5-billion. Analysts on average are expecting revenue of US$19.27-billion, according to IBES data from Refinitiv.
Shares of PayPal Holdings Inc slumped 25% on Wednesday as investors questioned the company’s growth prospects after it disclosed a big hit to revenue from the impending loss of marquee client eBay Inc . PayPal’s operating agreement with eBay, its former parent, has ended and the online marketplace’s transition to its own payments platform is impacting transaction volumes, the company said on Tuesday.
Economic news
(8:15 a.m. ET) U.S. ADP National Employment Report for January.
(8:30 a.m. ET) Canada’s building permits for December.
(3 p.m. ET) Bank of Canada Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers appear before the Standing Senate Committee on Banking, Trade and Commerce (videoconference)
With Reuters and The Canadian Press